Getting Sick is Not an Option for Solo Entrepreneurs

I have just been released from the hospital for an emergency surgery last Wednesday. Everything went well, and I am now back home recuperating.

But I have not been able to post anything in my blogs, which brings me to the question: If you are hospitalized or get sick, do you have a back up plan for your business? Or will your business take a sick day as well?

Lucky for me, I have several dependable folks helping out with PowerHomeBiz.com and our other sites. But solo entrepreneurs may not have such luck. Imagine if you're a web designer who has committed to a client the completion of their project at a certain date, only to find that you cannot do it because you're in the hospital. Or if you are running an ecommerce store and orders are pouring in, but you can't do anything with fulfillment as you are too sick to do so. Unfortunately, for many of us, no work means no pay.

We don't want to think about getting sick or hospitalized, but it is important to create a back up plan for your business, especially if you are working solo and your family depends on you. Here are some things to consider:

• Run as many processes of your business on auto-pilot as much as possible. An information site or blog earning from Adsense can survive days without getting new content or being updated -- and yet income can still come in. But if you sell advertising or products or services and new orders are coming in, you must at least have an autoresponder telling customers that their order has been received and will be processed within the next two business days (or whatever duration you are comfortable with). That way, your customer can be assured that you have received the order and hopefully processing it.
• Invest in technology. Buy a laptop to allow you work wherever and whenever you need to work -- even in hospitals. More importantly, get a wireless broadband Internet access to allow you to be online anywhere. Verizon Wireless Internet costs about $49 per month -- and in the case of my hospitalization, this service is a definite life saver. These are business expenses so you can deduct these items from your tax bill. Or at least get a smartphone like Blackberry or Palm Treo with Internet and email access so you know what is happening to your business.
• Get a helper. Or at least someone you can rely on who can help things running in your business while you are unable to do so. It can be as simple as your wife or husband calling your clients that you may be a little delayed in fulfilling your obligations to them because you are sick. Or a back up person who can work on your projects for you until you get better (properly compensated, of course). Or even your family members to help pack and ship the items ordered by customers.
• Eat right and be healthy. Of course, the best advice is to make sure you avoid being sick by taking care of yourself. Find ways to release stress from your business. Relax and sleep right.

10 Biggest Business Blunders

The authors of the book The Maui Millionaires, David Finkel and Diane Kennedy, continue their exploration for amassing wealth in their new book "The Maui Millionaires for Business. The publishers sent me an excerpt of the book, which focused on how entrepreneurs and business-people can successfully solve wealth challenges.

According to the book, here are the top 10 biggest blunders committed by entrepreneurs and freelancers:

1. Taking Your Eye Off of Your Cash Flow
2. Improper Management of Accounts Receivable
3. Over Expansion
4. Too Much Time Setting Up Instead of Getting Business
5. Selling by the Hour
6. Giving Your Expertise Away in a Way that Has No Perceived Value
7. Requiring Payment Before You Give any Value
8. Ignoring Window Shoppers in Favor of Customers
9. Hiring "Warm Bodies"
10. Failure to Fulfill Sales Promises

For strategies on how to solve the above blunders, read the book excerpt of The Maui Millionaires for Business

3 Basic Questions You Need to Ask When Starting a Business

I had a very interesting discussion today with a "retired" entrepreneur who had started several successful ventures in his hometown. We were discussing the topic of starting a business; in particular, how can a person know that this is the right business to start and succeed with it.

According to him, he only ask himself three questions:

1. Is this a business that I can do? He basically looks at whether he has the resources, skills, knowhow and right support to start the business. If he feels that the business is way over his head (and budget), he takes a step backwards and looks again why he is attracted to the business in the first place and what he can do to make it easier for him to start the business.

2. Do I understand how to grow and run this business? He never starts a business that he has not researched. Before embarking on the business, he reads whatever he can about the business from books, magazines or other sources of information he can get his hands on (even talking to current business owners).

3. If the business fails, how will it affect me and my family? As a family man with 3 kids, he always looks at the risks involved and the odds of his success. While he doesn't believe in playing it safe, he also does not want to go blindly into something and lose everything his family has.

Is There a Right Personality for Entrepreneurship?

Someone asked a question today on whether there are personality types that are not suited for entrepreneurship. Immediately, one can rattle off some characteristics that may not suit an ideal entrepreneur and these are:

• Those who are better off following directions, instead of creating their directions
• Those who are too risk averse and loves/needs the security of a salaried life
• Those who have problems seeing through to what they started
• Those who have no long term vision of what they want to accomplish
• Those who cannot handle the pressure of trying to make it on their own
• Does not persevere and immediately gets discouraged
• Lack of drive to accumulate wealth and earn more than working for others
• Lack of specialized business ability or skills that can be translated into a successful business

However, I am curious as to what empirical studies have noted. There's a new study by the Florida International University that looked at 830 entrepreneurs over four years to see which characteristics result in failure or success of the business. They looked at 130 different independent variables such as education, prior exposure to entrepreneurship, social outlook, among others and most of them don't seem to make a difference! MiamiHerald.com has a story on the study (unfortunately, I can't find any link to the study from the FIU website)

Interesting Business Idea: Products for the Hair Down There

I wrote about an interesting success story over at WomenHomeBusiness.com about Nancy Jarecki who created very unconventional (and hardly talked about) beauty products.

Apparently, many women want to be true blondes (or true red heads or true brunettes) by matching their hair colors up on their heads and "down there". Nancy created a special hair coloring kit specifically for the hair down there -- and her products are selling briskly. She is about to reach million dollar in sales this year! Who knew that there will be a great demand for color kits for the hair down there?

Read this interesting success story

Home Business Success Story: Betsy Fein

WomenHomeBusiness.com just published an interview I did with Betsy Fein, President of the Maryland-based Clutterbusters http://www.clutterbusters.net, one of the leading professional home organizing businesses.

Betsy's story is very interesting. She started her home organizing business after she was laid off from her job with only $5,000 as startup capital. She got her first clients from the ads she placed in local newspapers and magazines. Like many new entrepreneurs, Betsy experienced a lot of problems learning the ropes of business -- from not knowing how to tell clients that she is increasing her fees to miscalculating the number of hours needed to complete a job.

Last year, Betsy embarked on growing her business via franchising, which her husband handles. She now has two franchises and hope to get 10 more before 2007 ends. Her business has not yet broken the $1-million revenue mark, but Clutterbusters is slowly but surely reaching that goal.

Read Betsy Fein's story at WomenHomeBusiness.com

State-By-State Guide to Starting a Business

One of the most common questions we get is: "How do I start a business in [name of state]?"

Many of our users want to know what is the process for establishing their business in their state, what permits and licenses do they need to get, where can they get these licenses, how much will it cost to register the business, and where can they get help, and all the other nitty-gritty of establishing a business. The whole process of starting a business, especially the legal and regulatory requirements, can be very confusing and daunting for a new entrepreneur.

To address this need, we created a special section called State by State Guide to Starting a Business that provides a guide where entrepreneurs can find the information they need to start a business in their state. For each state, we provide pertinent links to state government website and small business development centers on:

• How to start a business = all states provide a guide on how to start a business in their state; the trick is in finding where these guides are located. Some are published in the state website (e.g. Alabama.gov), while others are in their Secretary of State website. Still other states have one-stop shop websites for businesses such as North Carolina's NCCommerce.com run by the Department of Commerce.
  
• Business Registration, Permits and Licenses = while some states are better than others, the information on how to go about registering a business name, where to get permits, what businesses needs to get a license are on the Web. What we did was to make it easy for the users to find.
  
• Taxes = ahhh, taxes, of course. We provide the link to the business tax page of the state's Department of Revenue
  
• Mentorship/Assistance = many home business owners do not know where to get help or advice when they are starting and running their businesses. We provide links to the Small Business Administration office in each state as well as the various SCORE offices by county.
  
• General Resources = we typically included links to the Secretary of State website as well as the chamber of commerce website for the states and other information that could be helpful to the entrepreneur

Visit our State by State Guide to Starting a Business

Are You Cut Out to be an Entrepreneur?

If starting a business is part of your plans for next year, you need to be sure that you are ready for entrepreneurship and all the ups and downs that goes with it. There are a million and one things that can happen -- from hitting on a winning business idea to finding a dud; or from earning a million in a year or finding yourself in the unemployment line asking for doleouts.

Ask yourself the following questions to see if you are ready for all the challenges of starting a business:

• In the event the business fails, am I willing to lose out all the money I invested? If I borrowed the money from family and friends, will I be able to face them and tell them I lost their money? If I wiped out my family's bank account, can I face my children at the dinner table and explain to them that all they're having for Christmas is a loaf of bread? Will I lose the house if the bank asks for the money they loaned to me?
  
• Am I willing to work longer days (and nights), even seven days a week if needed? Do I have the motivation and stamina to go beyond the 9-to-5 working hours of a corporate employee?
  
• Can I handle pressure and make fast decisions if needed? Can I be calm, cool and collected when things go haywire? How can I let off steam? What can I do to relax and focus on the tasks at hand?
  
• How long am I willing to wait for the business to succeed? Do I bail out in six months if it is not showing the kind of profit I was hoping? Or can I stick to the business for two years and hope that it will turn in the profit I need by then? When do I throw in the towel and admit that I can't get it to work?
  
• Do I have the skills, know how and talent to make the business work? Can I sell? What are my best traits, and if I don't possess the skills I need, where and how will I get them?

Profile of Home Business Entrepreneurs

I've always known that the home business market is wide, which the latest Survey of Business Owners conducted by the Bureau of Census confirmed. According to their study, almost half or 49 percent of the nation’s businesses are operated from home. Imagine that -- almost half!

Other very interesting statistics on home businesses:

• Home-based businesses made up 56 percent of American Indian- and Alaska Native-owned firms, 56 percent of women-owned firms, 53 percent of black-owned firms, 53 percent of Native Hawaiian- and Pacific Islander-owned firms, and 45 percent of Hispanic-owned firms. In contrast, 2-in-3 Asian-owned firms reported they conducted business from nonresidential locations.
  
• Top industries for home-based businesses were: professional, scientific and technical services, construction, and retail trade and other services (such as personal services, and repair and maintenance).

Check out the other useful statistics on entrepreneurs from the latest Survey of Business Owners

The Joys of Self Employment

Happy Thanksgiving to everyone!

In this day of giving thanks, spending time with family and yes, eating, it has made me think of all the benefits and joys having my own business has given me and my family. Entrepreneurship has given me so much, and I am a better person because of it.

Here's my list of the joys and benefits of self employment:

1. The freedom to pursue your own vision
2. The control and flexibility you have over your own time.
3. The opportunity to learn and gain knowledge.
4. The highs and lows of self-employment.
5. The sense of pride and fulfillment in accomplishing things.
6. The confidence you gain in knowing that you can do it.
7. Potential earnings exceed a salaried employee.
8. Business owner reaps the full rewards
9. Each new day is a challenge.
10. The chance to share your learning.

Read the full article "The Joys of Self-Employment"

SmartMoney Small Business Challenge

If you are looking to reach finance and investment-minded consumers, you may want to join SmartMoney's Small Business Challege.

All you have to do is to submit your business plan. If adjudged the winner, you can win a prize package consisting of $200,000 worth of SmartMoney and SmartMoney.com advertising and a Sony VAIO computer. The contest will begin accepting entries on November 13 and will run until January 31, 2007.

Learn about the Small Business Challenge contest

How to Borrow from Family and Friends

My colleague George Rodriguez wrote an article giving tips on how to borrow startup capital from friends and relatives. His tips are:

1. Choose the right person
2. Understand that this is high risk capital.
3. Ask for money only when you are prepared and ready.
4. Discuss how their investment will be structured.
5. Put everything in writing.

Read the article "Raising Start-Up Capital: How to Borrow from Family and Friends"

Best Banks for Entrepreneurs

If you are thinking of getting a bank loan to finance your business, you may want to check with Small Business Administration's "Banking Studies: Small Business Lending in the U.S."

The study lists the best banks in each state in terms of their small business lending activities. The data also includes the microloans offered by these banks. While the latest study is 2004, the study is still very relevant and helpful to anyone looking to get a bank loan

Read about the best small business banks in America