Tag Archives: financial stress economy

Ride the wave of love for startups — and existing small companies

If you’re an entrepreneur — or are thinking about becoming one — take advantage of the prevailing national pride in small business. America has always had a love affair with the Mom and Pop Main Street shop, but now, more than ever, the country is depending on entrepreneurs of every ilk to play a large role in our economic growth.

During the dark days of this recession, small business owners everywhere watched the big banks and car companies in the news and joked, “Where’s my bailout?” If it’s lonely at the top, it’s especially desolate at the top of a small business, where entrepreneurs have struggled alone with all kinds of tough decisions, from whether to lay off valued employees to if it might be time to file for bankruptcy. Plenty of small companies have folded, but many more are still standing.

These business owners, and the new entrepreneurs joining their ranks, are poised to become the national heroes of the American economy. For one thing, they provide half the jobs in the country and create up to 80% of all new jobs. Lawmakers and business reporters are now pulling out all the classic metaphors, like small business being “the backbone of the economy” and “the engine driving our economic recovery.”

If you own a small business and survived 2009, or if you started a business last year, you deserve some high praise. No doubt it required sharp business acumen, not to mention bravery, to pull that off. The people around you, in your company, your community and even your country, appreciate what you’ve done to help keep your employees working and your vendors in business. People with income can spend, which creates more income, and more spending, and eventually, the economy will be thriving again.

This is what I’d like to see. I’d like to be sitting on a plane sometime soon and have the airline attendant stand up and grab her microphone to say, “Ladies and gentleman, we have some small business owners on board with us today. Let’s give them all a round of applause to thank them for their part in stimulating the American economy.”

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How a tough year for your business in 2009 might mean a fantastic 2010

I can’t believe I’m saying this, but 2009 was actually a great year at Tribe. And I’m thinking it might have been at your company too.

Of course, we did lose our largest client, due to the slump in the housing market. We had to lay off a few talented, hardworking people that we’d hire again in a heartbeat. We cut back on some perks, like having a fresh flower in everyone’s office each Monday and providing free takeout for lunch five days a week. We froze salaries for most of the year. We gave a somewhat smaller holiday bonus than usual.

On the other hand, we’ll enter 2010 ready to compete on a much higher level than ever before. We’ve used this slow year to reinvent, and to move into some new territory. We’ve expanded our internal communications practice area to incorporate social media and engagement tools. We’ve created some interesting initiatives in new media, for both consumer audiences and employee ones. We’ve developed expertise in some key research areas, like the widely varying perspectives of Gen Y, Gen X and Boomer employees in the workplace, and recession spending by affluent couples. We’ve dabbled in creating our own content and products, like our “Start Your Own Company” card deck and iPhone application.

Other small business owners I’ve talked with seem to have done their own share of reinventing. This year has been about accepting that the recession is real, having time to reflect on what works and what doesn’t about our companies, and exploring some new areas we might not have had time to spend time on before.

Everyone’s talking about how companies are stronger for trimming expenses and figuring out bow to do more with less. Thinking small is a good exercise.

But an even better way to think is how we could get bigger. Ways we could expand to serve other types of clients than we have in the past. How we could fill some new need that’s not being met. What we could do next that would make us wake up excited about getting in to the office.

Nature moves in cycles, and business does too. New moon to full moon. High tide to low. Winter to spring. 2009 has been a good year for sending our roots deeper and in new directions. Soon, hopefully beginning in 2010, certainly in the next few years, our economic downturn will swing back in the other direction. The economy will grow, our clients will grow, our companies will grow. The quiet reinvention so many small businesses have done in 2009 will position us well to reap all the benefits of the next boom time.

After a baby, is starting a company a better idea than going back to work?

babyMaggie would really rather be at home with her new baby, but went back to her job after a standard maternity leave because she and her husband decided they couldn’t afford for her not to work. Several months into it, she’s figured out that after paying for childcare and other expenses associated with the job, she nets about $300 a month. So, in her words, she’s working “to pay for a couple of tanks of gas and some groceries.”

Is there not a better way to make $300? Maggie is the sister of a friend of mine, and I’ve only met her once or twice, but I can’t quit thinking about her situation. I remember what it was like to have a new baby and be torn away by work. And I loved my work at the time, although I understand Maggie is not crazy about her job. I do know she comes from an entrepreneurial family, so the idea of starting her own business is probably not foreign to her.

What sort of business could she start that would mean limited time away from her baby? We’re not talking about the kind of all-consuming startup that requires 80 hours a week or depends on venture capital to get off the ground. To quit her job, Maggie would only need to create $3,600 a year in net profit. That’s not so hard to do. Let’s look at some hypothetical possibilities, making some huge assumptions about what sorts of skills and talents she might have to offer — and the kinds of things she’d actually enjoy doing.

A good solution would be something she could bill by the hour, for only a handful of hours a week. Let’s say she’s a talented tennis player and could give tennis lessons, or fluent in French and could tutor high school students, or a math whiz and could serve as an SAT coach for kids trying to raise their scores. If she charged $50 an hour, or even $35, she could work a very short week and clear her $300 net, even if she had to pay a babysitter. Although, she also might schedule some of those hours during the weekends when her husband could be with the baby.

Let’s say she’s been keeping the company books on Quickbooks at her current job. So many small businesses use that accounting software, many of which might not be large enough to have a full-time bookkeeper but would like to outsource the accounts payable, accounts receivable and basic financial reports. She could handle the books for one or two small companies by going in just a morning or so a week and come home with that $300 or more.

What about starting a company that would provide something needed by other mothers with young kids? I remember several years ago a  woman in New York had the brilliant idea of an exercise class in Central Park that incorporated baby strollers (and babies) into the fitness routine. Maybe Maggie was a lifeguard and swim instructor in her youth and could start a group swimming class for mothers and babies using her mom’s backyard pool.

One trick to making this plan work would be choosing a business that offers the chance of recurring income from the same clients month after month. In other words, she signs up one student for tennis lessons and sees them once a week for months on end. Or connects with a small business who could use a freelance bookkeeper and continues to do their books until they’re large enough to need someone full time. Otherwise, she’ll need to spend a large amount of her time marketing her services so she can create new clients over and over.

Selling your hours adds up more quickly than selling a thing. Particularly a thing that requires hard costs for materials or equipment.  This is not always true, but I think would be for the types of things I can imagine someone like Maggie selling, like homemade greeting cards (she’s very crafty) or hand sewn baby bonnets or fresh-baked birthday cakes. She would have to sell a whole bunch of any of those to make her $300 each month. If you have a skill or talent that allows you to charge a significant hourly rate, that can be an easier path to doing without a paycheck.

Starting a company as a mompreneur doesn’t have to be complicated. If you don’t need to rent office space or hire employees or buy expensive equipment, the startup doesn’t have to cost much either. This is not meant to be a pushy plug for our products, but the Start Your Own Company application for the iPhone is just .99 and could walk Maggie through the basic steps of launching a business. Or she could try the more comprehensive Start Your Own Company printed deck from Starter Cards, which also includes information on the Launch and Follow-Through phases as well as the Launch phase. Either one could be a simple first step to creating a life-sized business that works for this stage of her life.


Jobless at 58 sounds like an entrepreneur to me

Yesterday the New York Times ran a headline that read, “At 58, a Life Story in Need of a Rewrite.” The article was about Michael Blattman, who’s been out of work since January of 2008. Blattman is a 58-year-old MBA with a strong resume in financial services who once earned $225,000 a year.

After a year and a half of an unfruitful job search, it seems obvious that this guy should start his own gig. It’s unlikely that the financial sector will be in a hiring frenzy anytime soon. Blattman has applied for 600 jobs, according to the Times, and has scored exactly three interviews, only one of which was in person. It doesn’t look good for him being gainfully employed at a hefty salary anytime soon.

startercards.0626When I hear about people like Blatmann, first I want to shake them and then I want to find their address and send them a deck of our Start Your Own Company cards. He clearly has experience and expertise to share, having worked with the Federal Reserve and the Sallie Mae student loan program, as well as teaching business classes at the University of Maryland.

Why is he not starting his own company, or at least hanging out his shingle as a consultant? The cost of going into business for yourself needn’t be much of a hurdle, in an age when you can incorporate online with LegalZoom for $139 and launch a website with a free template. Perhaps there’s a growing need for guidance in applying for student loans, or maybe he could consult with schools on some aspect of providing financial assistance. Or it could be that his real passion is wine or carpentry or backpacking or piano and this is his chance to start a company doing what he loves.

He’s clearly got time on his hands that might be put to better use. He mentioned to the Times reporter that he had “zero” planned for the coming week, and he admits to driving two towns over for groceries, just to kill an hour or so. Blattman is divorced, but has given up on computer dating sites for now, because women apparently don’t show much interest in 58-year-old guys who are unemployed. It seems his life could use some positive momentum.

Blattman comes across as intelligent, likable, capable. He has years of contacts and a strong reputation in his industry. Why not use the thick skin he’s no doubt developed over his 18-month job search to sell the services of his own company, rather than trying to get hired by someone else?

He may have excellent reasons for continuing to job hunt rather than creating his own income. But I wonder if he just doesn’t realize that starting a company doesn’t have to be that hard. When I run into someone stuck in that spot, I want to get up on my soapbox and shout about how Starter Cards take you through the process, one manageable step at a time.

This is the era of unintentional entrepreneurs. People who never considered themselves the entrepreneurial type are creating their own work when they can’t find suitable jobs. But unintentional or not, every entrepreneur has to summon the guts to take that first leap.

Like anything else, launching a business can be broken down into a series of smaller tasks. If you know a Blattman out there,  send him or her to the Starter Cards website  for that Start Your Own Company deck. And if you’re Michael Blattman, give me your address and I’ll mail you a deck as my gift.

4 important reasons to start a company when you can’t find a job

woman blank biz cardIn this recession, many companies are being launched by people who never meant to be entrepreneurs. These people haven’t long harbored the dream of being their own boss; They just haven’t been able to find a job and are thus taking matters into their own hands. The New York Times published an excellent piece yesterday  titled “On to Plan B: Starting a Business,” by Mickey Meece that touched on several of what I consider to be important themes in today’s entrepreneurial landscape.

1. It’s not crazy to launch a business during a recession. Contrary to the general assumption that  starting a company during an economic downturn is particularly risky, it appears to be no more risky than at any other time, according to a 2009 report from Ernst & Young. In fact, the survival rate is about the same for companies started in good times or bad. The Kauffman Foundation offers some reassuring statistics supporting the idea that companies fare no better or worse when launched in a recession or bear market.

2. Technology and social media make it easier than it’s ever been to start your own company. Just imagine how much harder it would be to start a company a decade or two ago — without the Internet, without email, without cell phones. You can research competitive companies and potential customers online. You can find legal services online, so you can incorporate without even leaving your desk. Creating a website no longer requires the services of a programmer, since there are numerous website templates and tools out there, from inexpensive to free. You can even use social media to market your products and services. A tremendous amount of business resources are available now that just didn’t exist before.

3. Starting your own business can give you some measure of control over your future. The current job market can be tough on egos. While the jobless rate is almost in the double digits, many companies are sidestepping much of the etiquette that once was common practice. You send out resumes, email decision makers and place phone calls, and it might seem as if you’ve just launched them all into a black hole somewhere, judging from the response you get. You may score an interview, but then never hear back from that company again, even to tell you that you didn’t make the cut. Launching a business at least gives you some concrete actions you can take that will result in visible progress. Week after week, you can see that your efforts are beginning to materialize into a company you created out of thin air.

4. Even if you get another corporate gig, it’s still good to have that Plan B. Let’s say you launch your company and then you get that big job offer you’ve been waiting for all this time. If your business is something you can continue to do on the side, it might be helpful to  have that additional income. That side business is also just as useful for your mental health. When you have a bad day at work, or your job future seems  uncertain, it can be enormously reassuring to know you’ve got something else to fall back on.

Starting a company as a Plan B

Plan B guyThis economy is a great time to have a Plan B. Are you in the midst of a job search? Might not be a bad idea to start a company on the side, in case the right job doesn’t show up right away. Have a job? Also a good idea to have a small business you mess around with after hours, because even the most solid-seeming jobs can go away with no warning. 

I’m not saying you need to go out and launch a time-demanding, capital-intensive startup. I’m talking about creating some other stream of income, even it’s very modest. Maybe it’s selling vintage clothes on ebay, or marketing your handmade greeting cards on etsy.com, or taking orders for your one-of-a-kind birthday cakes. It could be starting a worm farm in the backyard and shipping live worms to bird lovers and reptile owners. It might be hiring yourself out as a D.J. for parties, or giving tennis lessons or painting dog portraits. You could build websites or custom backyard swing sets. You could sell your special barbecue sauce or cater barbecues. Almost anything could be a Plan B.

Creating additional income is only one reason this is a good idea. The larger reason is the benefit to your mental health. When you wake up in the middle of the night, worried that you’re marked for the next round of layoffs at work, it can help to know you have something else to fall back on, even if it couldn’t possibly support you in its present form. If you get to the third interview for a job and then they hire somebody else, you’ll feel slightly less desolate knowing you’ve got something else going on.

Your Plan B could also surprise you. Maybe your iPhone app becomes a big seller and you find it bringing in much more money than your day job. Maybe your hand-stitched handbags become one of Oprah’s favorite things and you’ve got retailers beating down your door for orders. Stranger things have happened. 

Your Plan B might give  you a running start when you need it. Let’s say you do suddenly find yourself unemployed. Or let’s say you’re enjoying your Plan B sideline so much, you’re thinking you’d be much happier doing it full time. Having spent several months or years making gradual progress on this side company, you could probably ramp it up much more quickly than if you were starting from scratch. You also will have had the opportunity to iron out a few wrinkles and get a feel for what’s it like to run that business.

Here are a few suggestions for putting your Plan B in place, just in case.

1. Choose something that’s a passion of yours. One of the best things about a Plan B is that it isn’t burdened with the entire responsibility for your financial support, so you can afford to try something just because you love it, and not because of how much money it makes.

2. Pick a business you can handle after hours. You don’t want to jeopardize the job you have, or to take too many business hours away from a job search. 

3. Treat it like a real business. Do what you can to make this sideline profitable. Keep good financial records. Pay attention to operating costs vs. income. 

4. Be professional. Your clients and customers will want the same level of professionalism they would expect from any small business. Even though you’re not doing it full time, you’ll still want to show up on time, do what you say you will and deliver a good value.

Small Business Strategies: How to thrive in a recession

Shrewd blond at computerThere’s plenty of bad news about the economy. But the good news is that you can thrive, despite the recession. If you’re out of work, it’s a great time to start your own company. If you already own a small business, there may now be new opportunities to grow.

1. Offer a new way for people to save money. The current economic climate has everyone looking for ways to cut costs. Can you provide local lawn maintenance cheaper than the national companies? Can you offer computer maintenance for a company that can no longer afford a full-time IT person? Can you publish an online newsletter with your community’s best grocery bargains of the week?

 2. Look for a problem you can solve. Do you see people around you struggling with some issue for which you could provide a solution? For example, many families are now trying to reduce restaurant spending but don’t have time to cook. You could start a company selling homemade meals, frozen and delivered ready to heat and eat.

3. Position your product or service as a prudent financial move. Big screen TVs are currently selling quite well. Not because people are in the mood to splurge, but because they’re justifying that purchase as a way to save money on going out. Whatever you’re selling, position it as a less expensive option than something in another spending category. Selling firewood? Point out that it can cut heating bills.

 4. Give that crazy idea a shot. This is a time for taking risks you might not take if the job market were more stable. Many people are coming to the realization that no job is absolutely guaranteed to last. If you’ve got to live with uncertainty, why not be doing something you’ve dreamed of doing? And good luck. There’s no time like the present to take that plunge.