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Monday, December 24, 2007

Budget Help For The Small Business Owner

By Ellen Rohr

Are you ready for the new year that is right around the corner? How wonderful...a brand new year lays at your feet. What are you going to do with it?

Take a look back at January 2007. Compare where you were then with where you are now. Check your progress. Are you happy with it?

Another year gone by. Sigh. It's scary how fast it went.

Are you better off than you were last January? Are your relationships more rewarding? Is your bank account bigger?

"You may delay but time will not." Benjamin Franklin

You are too old to waste time. You have an opportunity to create the life you want starting this year, right now. It's time for the "B" word. "B" stands for goal setting. "B" stands for planning. "B" stands for...BUDGET.

And it's time for you to get over your "B" word problem. You know you are supposed to put a budget together, right? Have you? Have you lined up 2007 in numbers and dollars? Have courage. I'll help you. I have struggled with this. I learned how to budget only because I HAD to. And so do you. If you don't set goals and measure your progress, your business won't get any better. It will get worse! Yikes! Together, we can get through it. Here are some tips for putting together your business budget for 2008...and beyond.

Getting Started...

• stopping. Stop whining about budgeting. Stop claiming you can't do it. Stop claiming you don't get it. Budgeting is your best guess at what you can do for sales and expenses for a future period of time. That's all.

• Don't worry about doing it just right. You can't do it 100% right, meaning you will never guess exactly what you will have in sales and expenses. You can't do it wrong. Any swing at doing a budget is a positive move.

• Realize your power. You are incredibly powerful, so much more so than you realize. Writing your goals, crafting your budget, actually sets your goals into motion. You have everything to gain and nothing to lose by budgeting. So, let's go!

Tools to use...

• Your accounting program probably has a budgeting program in it. Use it. It will do the math for you.

• Do you provide plumbing, heating, cooling, electrical, over-the-counter sales and septic tank pumping? Create a budget for each entity. Use the departments feature in your accounting program.

• Columnar pads are your friends. You know those green tinted sheets with the rows and columns inked in already? There is nothing wrong with using a pencil and paper to work out your budget.

• Print out your Income Statement (aka Profit and Loss or P&L) from the last two years. If you don't have them, find your income tax returns. Your tax preparer created an income statement for your tax return. You can also have your check book register handy.

Basic Budgeting Steps...

• Create a reasonable chart of accounts. The chart of accounts should reflect YOUR business. Your accountant may encourage you to use THEIR chart of accounts. Doing so makes it easier for him to do your taxes. He should accommodate you and your business by helping you create a chart of accounts that is plumbing-business specific. I've attached a sample chart of accounts for you to use. Show it to your accountant and customize it to reflect the action at YOUR company.

• Simple budgeting involves goal setting for sales and expenses (costs.) Start with account number 4-1000 and work through the rest of the expenses. Of course you can add other expenses. This is just a starting point. More sophisticated budgeting involves the balance sheet items...assets, liabilities and equity (accounts 1-1000 through 3-9000.) If you are new to budgeting, start with sales and expenses. Address the other items with your accountant after you have done that.

• Find a Budget Buddy. Doing your budget with someone else is a GREAT idea. Two sets of eyes will catch more math errors. Two brains will help you think out your assumptions. And, making an appointment with another person to work on the budget will discipline YOU to keep that appointment. Budgeting is easy to blow off because it's not an urgent activity. Who should be your Budget Buddy? Another business owner is good. You can also work with one of your employees on the budget. Don't be afraid to share your financial information with a key employee. Their financial literacy makes them more valuable to your organization.

• There are two ways to approach the sales line of your budget.

1. Set a sales goal... and work from there.

2. Fill in all your projected costs, and then see how much sales will have to be to cover costs and leave your desired profit.

Either way is OK. If you start with the sales line, and there is not enough on the top to cover all the expenses you anticipate, you can go up to the top line and change your budgeted sales to make it work. Remember...the Budget is pretend. It's a guess. You can move the numbers around.

• Work your way down the list of costs and make your best guess. Reference your income statement, tax returns and check register to see how much you have spent on expenses in the past.

• You can fill in the budget for the whole year, or month by month. Month by month is a more usable format when it comes to checking actual performance to budgeted numbers.

• The budget is just goal setting. It doesn't need to be bound by strict accounting rules. You can budget for expenses you haven't incurred yet. For instance, if you want to set aside money for buying a new truck, you can budget for it first...and then buy once you have the money saved.

• Keep a Budgeting Log. You are going to pull some of your budgeted numbers from thin air. Write down notes to yourself as you come up with the numbers for your budget. When you refer to your budget in the months to come, you may forget your assumptions. Write them down in your Budgeting Log.

• John Young, venture capitalist and marketing maverick, helps me put my budget together for Benjamin Franklin Plumbing. He gave me this great piece of advice: Don't put down budgeted numbers that you KNOW won't happen. For instance, if you KNOW that your insurance costs are going to go up this year, don't put down the same dollar amount as you paid last year. If you don't know the increase amount yet, find out...or put in an increased number from last year. But don't put in the same number...because you KNOW that won't be it.

Use it or lose it...

• Don't bury your budget in a drawer once you consider it "done." A budget is a viable goal setting...and getting...tool. Each month, compare your actual performance to your budgeted performance. Even better, check MID month. Check your progress on the 15th of the month. If you are behind in sales, take action to crank up sales...and to cinch down expenses. If you don't refer to your budget until after the month is over, you may miss the opportunity to salvage a month.

Once upon a time, I taught skiing at Park City Ski Area. A client signed up to take a week's worth of ski lessons with me. As an instructor, a week of lessons is a big money maker. Still, I had to turn him down.

I told him, "Listen, you are only going to be here for a week. If you take lessons every day, you'll miss the chance to just SKI. You need to learn a bit, and then go practice. Have fun. Make some mistakes. Try things out on your own. If you only take lessons, you'll miss the point: YOU want to SKI." We settled on a few lessons with some free time in between.

So...go forth and budget. You know more than you think you do. Don't avoid budgeting because you are not sure that you know how. This stuff isn't that hard. If you aren't super comfortable with it, you will avoid it. Or, claim you don't "get" it. But you get it enough to give it a swing. This column has enough information for you to get started. Put together a budget for 2008. Check your progress against it each week. And have some fun out there on the steep slopes of business.

This year, let the "B" stand for BIG BUCKS!
For more help...visit or call 877.629.7647
We make business basics EASY at Bare Bones Biz!

Ellen Rohr is the President and Founder of Bare Bones Biz, a business training and consulting company that teaches clients how to turn big ideas into successful businesses. Rohr is the successful author of numerous business basics books, including: Where Did the Money Go? - Accounting Basics for the Business Owner Who Hates Numbers and How Much Should I Charge? - Pricing Basics for Making Money Doing What You Love.

Ready to make more money? Go to NOW and sign up to receive the latest information on our FREE monthly Teleseminars, Biz Exposes and New Bare Bones Biz Products.

Buying a Business - Understanding Small Business Financing

By Jason L. Pittman

As a business broker I am frequently discussing with clients and prospective buyers methods of small business financing. Once a buyer and seller agree on price and terms, it all boils down to due diligence and financing.

A lot of factors can determine how lenders will view your deal. It will depend on the type of lender, type of business, and what kind of assets does the business own that can be used as collateral. Is there real estate involved in the transaction?

A commercial banker or loan broker will show you what factors matter most and get your deal funded with their products.

Cash and Equity

Of course, if you're paying all cash, none of this is your concern, however 100% cash deals are not the norm.

Every business is unique and different, but one thing is certain before you seriously consider pursuing a business for sale: You or one of your partners will need sufficient liquid capital or equity for anyone to finance your deal.

Bank Financing

The stories of a "no money down" deals and 90% seller financing are rare and I have personally never seen one that was legitimate.

Again, depending on various factors, when acquiring small business financing through a commercial lender, there is a good chance you'll need 20-40% cash/equity down on the business, financing the balance with debt capital.

You will probably pay "prime + 2" in interest, meaning if the prime rate is 8%, your interest will probably pay 10%.

The term of the loan will probably be 5-10 years. Many of the commercial loans I've seen are 7 year terms.

Business with Real Estate

If you are acquiring real estate in addition to the business, many products are available as "Blended Loans". These loans are "blended" with the standard "real estate loan" (10% down, 30 years).

You end up with roughly a 15% down payment, and a term of 18 - 22 years, which is great for keeping your debt service down and increasing your Cash Flow.

On the other hand, 15% of business and real estate can still be a sizable down payment.

The cost on the "blended loan" will likely be more favorable as well with the real estate as collateral.

Seller Financing

Most small and mid size companies will involve a portion of seller financing.

It is appropriate to amortize the financing over a period of time and have a balloon after 2 or 3 years.

This way the financing serves two purposes: Funds the deal and shows that the seller has confidence in the business - and the buyer.

Jason L. Pittman is a business broker and intermediary in Chicago, IL.

To access more info and resources on real estate and small business:

9 Steps to Building Business Credit

By Lisa Phillips

Building business credit can be accomplished regardless of your personal credit history. Business credit is essential in conserving cash flow, keeping track of business expenses and more importantly, protecting personal assets and personal credit history. The most important element to building business credit is finding lending institutions, credit card issuers and vendors that will establish business credit without you giving a personal guarantee from your individual credit information.

Business credit is also a way of building your company’s image and identity. The following are 9 Steps to Establishing Credit for Your Business:

Step One
Decide how you want to structure your business. This may take some research but a few common ways to structure a business are: C-Corporation; S-Corporation; Sole-Proprietorship; Limited Liability and Partnerships. For business credit separate from your personal credit you will need to structure your business as a Corporation or LLC. You can also purchase a “shelf” or “aged” corporation in the State where you want to do business. A shelf or aged corporation is one which has no activity and is created and put on the “shelf” to age and use at a later date. There are companies which sell shelf corporations.

Step Two
Obtain an employer identification number (EIN). Business credit is tracked using your business name, business address and employer identification number. You may obtain an EIN from the IRS online. ( The application is real simple and takes about 5 minutes. As a sole proprietor you may apply or if you are a corporation any officer may apply.

Step Three
Open a separate bank account under the exact legal name of the business. Business checking accounts can be opened with as little as a $100.00 deposit.

Step Four
Business address and telephone number must be listed under the business name in the 411 directory and the telephone must be answered in your business name.

Step Five
Obtain required business license, permits, registrations, etc., in the City or Jurisdiction where you do business.

Step Six
Technically, at this point you are ready to establish business credit with some vendors such as Staples. Simply go to fax your business phone bill along with the credit application on your business letterhead to apply for business credit. No personal guarantee is required and you should receive the standard business credit line of $750.00

Step Seven
Establish a profile with Dun and Bradstreet (DNB) and obtain a D-U-N-S Number. DNB is the largest tracker of business credit. The D-U-N-S Number is a nine-digit identification number that provides unique identifiers of business entities. The website for Dun & Bradstreet is There is no charge and you will receive a D-U-N-S Number within 30 business days. You can pay for their credit builder services in order to receive the D-U-N-S immediately, but it is definitely not necessary. Companies where you apply for credit that use Dun & Bradstreet services will request your credit file and this will establish your file. It may take up to 45 days for the companies to report.

Note: If you do decide to pay for their credit builder services preparation is vital when contacting Dun & Bradstreet. Make sure you have covered all your bases. What you say to DNB goes permanently into your file

Step Eight
Now that you have received your D-U-N-S number you are prepared to apply for business credit. As you begin to establish business credit it is imperative that you pay your invoices before the grace period. A Paydex Score of 80 is considered very good and is based on your payment history with at least five (5) vendors. It makes a difference for every day you pay earlier than the actual due date unlike personal credit. Business credit scores range on a scale from 0 to 100 and a Paydex score of 80 will get you the best business credit cards and terms.

Step Nine
After completing the process you may want to apply to the following companies with no personal guarantee required. Do not apply for everything at one time. This may get your business credit file flagged. Allow a couple of weeks between applications.

Office Depot-UPS-Staples-Fedex/Kinkos-T-Mobile-Dell Computers-Office Max-Nextel-Chevron Oil-Cingular-Nebs

Lisa Phillips is a marketing consultant specializing in business expansion and development. Because many small business owners lack the personal and business credit necessary to grow and expand, she has developed a free website to aid consumers as well as entrepreneurs in rebuilding and taking control of their credit.

Securing Business Credit For Your Startup Business

By Tl Kleban

One of the most important aspects of running a successful business is securing the finances to run it properly. This involves obtaining loans which has become easier now than in years past thanks to the ample funds and financial resources available in the market. As a business owner we can choose to get loans from either private banks to government institutions. It's this change of attitude by bank which has made acquiring loans easier. It's still not all fun and games, however.

The thing is for these banks to take you seriously as an entrepreneur, you need to separate your personal finances from your business life. They look at your business activity as they would a typical consumer for credit purposes, and will turn you down if your personal credit score is low.

A recent study showed that almost 74% of bankers say financial documentation is the most important aspect when they go to approve a small-business loan, and that 60% of those small businesses are turned down because of poor documentation. Here are some other steps you can take to ensure you are approved for that business loan:

Before you go to your bank asking for a loan, you better be sure that your account is in good standing with them. Think of this as an unwritten assurance which could help you increase your chances of getting that loan.

Do you have enough assets to pledge for your credit. This would consists of items like a house, car or a business premise. All of these items represent your ability to repay the loan back.

Many credit professionals recommend building a good credit score and personal credibility through paying taxes and maintaining all legal documents right from the beginning of the business venture. All lenders like to see both when making a decision on a loan.

Are your sources of past credit correctly reporting your credit and payment history to the chief credit reporting bureaus of your state? If they are not, then you may be in a little bit of trouble.

Keep a file of all business documents you have. They need to be complete and comprehensive. This includes licenses, permits, telephone listing, business name, domain name, investment details and spent capital. These act as an indication of the credibility of your business and you, the proprietor of it.

Another good idea is to try and invest a significant amount in the business before you apply for that credit or loan. Doing so gives the bank the impression you are willing to work hard to reach your business goals. This makes them more comfortable approving you for a loan since you will be more apt to pay the loan back.

What is the profitability of the business? You'll find that banks and other lending institutions will only offer loans to entities more likely to earn back the investment. This happens more often when profit realizations are expected to take a long time.

Visit a few small banks in your area to ask for financing. Bigger banks expect great credit history, collateral, hard cash and also personal credibility before they will offer any loan out to a business, making them difficult to deal with. Smaller banks are easier to work with and why most experts recommend them.

Merit Capital Advance looks at the big picture by offering a financing program that provides small businesses with fast business cash. It is the most convenient way to get a small business cash advance when you need it most. Visit Merit Capital Advance at

Thursday, November 15, 2007

When One Business Plan Isn't Enough

Tailoring your plan for different audiences can be as easy as emphasizing different points.

By David H. Bangs, Jr.

A wide variety of people will be interested in your business plan, including investors, potential partners, bankers, suppliers and employees. But one plan doesn't fit all. If you want to get maximum impact from your plan, you'll need to tailor it to address the particular needs of your audience.

Venture capitalists see hundreds of plans in a year, so each plan gets very little time. It's essential that you make the right impression fast. Emphasize a cogent, succinct summary and explanation of the basic business concept, and don't stint on the details about the impressive backgrounds of your management team.

Bankers tend to be more formal than VCs and more concerned with financial strength than with exciting concepts and impressive resumes. Pay extra attention to balance sheets and cash flow statements.

Angel investors are more informal investors and require a less formal plan. Rather than going for impressive bulk, seek brevity.

Potential partners should see a plan that deals comprehensively with the ownership structure and clearly spells out matters of control and accountability.

Customers who look at your business plan are probably considering building a long-term relationship with you. Fully address your relationships with other customers and suppliers. Talk about your record on matters that deal with the customer's individual requirements. Skip trends in your industry and other sections that customers already know.

Suppliers want to make sure you can pay your bills, so include cash flow forecasts and other financial reports. Then show how you plan to grow, and you'll be in a better position to negotiate terms.

Managers in your company use the plan to remind themselves of objectives, keep strategies clear and monitor company performance and market conditions. Stress corporate mission and vision statements and analyses of current industry and economic factors. Make it easy for managers to compare sales revenue, profitability and other key financial measures against planned performance.

Employees should get a version of your plan that's been edited for their understanding and needs. It's good to be open, but if you're uncomfortable with employees knowing exactly what all the managers earn, leave this information out. Include data like rates of workplace accidents or absenteeism that would be of only peripheral interest to investors.

Limit your alterations from one plan to another to modifying the emphasis of the information you present. Don't show one set of numbers to a banker you're trying to borrow from and another to a partner you're trying to lure on board. It's one thing to stress one aspect of your operation over another for presentation purposes and entirely another to distort the truth.

David H. Bangs has worked with small business owners for 20 years. He has experience on both sides of the financial table, having been an entrepreneur and a loan officer for Bank of America. He is the founder of Upstart Publishing and author of Business Plans Made Easy.

Are You Ready to Hire a Consultant for Your Business?

July 16, 2007
by Syndicated Columnist Cathy Harris

At some point in business, it becomes necessary to seek out an expert for advice and counsel. When the going gets tough, consultants provides the expertise you need.

Only you can really determine whether you need a consultant’s help. Don’t get caught in the trap of thinking you can do it all by yourself. Bringing a product from the idea state to the marketplace is a complicated difficult process. Stop for a minute and make a list of the issues you are tackling. Do you need another employee but don’t know the best places to look for one? Are you interested in manufacturing your product overseas but haven’t a clue how to get started? If you have other areas that need your attention and you can’t afford to make too many mistakes with your capital, then you’re the perfect candidate for a consultant.

Consultants are primarily hired to give you advice and counsel. They don’t make guarantees that their input will be effective. You’re the ultimate judge of their value; therefore it is extremely important for you to thoroughly check potential consultants’ references.

Consultants can be extremely helpful especially to inventors. The right consultant can offer advice on how to build a working prototype, assist in finding manufacturers and help develop a marketing strategy. He or she can introduce you to important contacts.

The key is to find a consultant that will meet your needs without wasting your time and money.

The best way to look for a consultant is to ask friends, family and colleagues. Getting referrals is always a good way to start because someone else has done much of the legwork and you will receive the benefits of what they’ve learned.

When beginning your research, don’t be turned off by those who consult part time. This can be good sign that they are active in their area of expertise and can give you up-to-date information.

The Yellow Pages, surprisingly, is a good source. The “Consultant” category is broken down by type (such as management consultants and business consultants), so you should be able to find one that matches your needs.

Trade journals are also helpful. Consultants tend to advertise in journals the majority of their potential clients read.

Make sure you interview consultants before hiring one. If they mention companies that have hired them, take notes.

At the end of the interview with a potential consultant, ask for the phone numbers of the people and companies they mentioned. Again, they should freely provide that information, their resume and a list of other clients and references. If they don’t, don’t hire them.

Also ask them to tell you about a difficult client they worked with. Every consultant should have at least one not-so-great experience. Listen carefully. Their story will give you great insight into how they work. If they claim every job they’ve had was great, how can you be sure they’ll tell you the truth about your issues? If they are overly negative, you should wonder whether they’re really concerned about doing a good job.

Also make sure before hiring a consultant, that the following are true: 1) They have no conflict of interest; 2) They are willingly to provide documentation of training received and share other background information; 3) They present a written contract detailing the types of services to be performed and the fees for those services; 4) They will provide you with a written report upon completions of the project. Finally, make sure you talk to more than one consultant and evaluate the services provided and fees charged, as well as analyze your needs before making a final decision.

When working with a consultant, you should always have an agreement in writing. The agreement should include how the payment will be made and the scope of the work being requested. It’s also very important that the agreement assigns all intellectual property rights to you. Otherwise, the consultant could claim ownership of the idea and leave you without recourse.

In the end, using a consultant has few downsides. They’ll offer expertise you don’t possess, but when it comes to playing the game, they’re only a coach on the sidelines. You are ultimately the one who must act.

Cathy Harris is a motivational speaker and business consultant. She is also the author of the book series “How To Take Control of Your Own Life” ( and can be reached through her company at Angels Press, P.O. Box 870849, Stone Mountain, GA 30087, Phone: (800) 797-8663, Fax:
(678) 254-5018, Website: Email:

Get Help With Your Business Plan

To help you write your business plan, we've compiled a list of the resources that will put you on the right track.

By the time you've read this guide and tried your hand at a few of the various components of a plan, you should be ready to go ahead and complete your own. However, there's always room for improvement, and there are a number of resources you can tap into to increase your expertise in plan writing.

Hiring a Consultant
Businesspeople tend to fall into two camps when it comes to consultants. Some believe strongly in the utility and value of hiring outside experts to bring new perspective and broad knowledge to challenging tasks. Others feel consultants are overpaid yes-men brought in only to endorse plans already decided on or to take the heat for unpopular but necessary decisions.

Who's right? Both are, depending on the consultant you hire and your purpose for hiring one. Most consultants are legitimate experts in specific or general business areas. And most consultants can be hired to help with all or part of the process of writing a business plan.

The downside is, you have to spend a lot of time on communication before and during the process of working with a consultant. Be sure you have fully explained--and the consultant fully understands--the nature of your business, your concept and strategy, your financial needs, and other matters such as control, future plans and so on. Refer to these important issues throughout the process--you don't want to pay for a beautifully done plan that fits somebody else's business, not yours. And when the work is done, debrief the consultant to find out if there is anything you can learn that wasn't included in the plan.

If you decide to hire a consultant to help you prepare your plan, take care to select the right person. Here are some guidelines:

1. Get referrals. Ask colleagues, acquaintances and professionals such as bankers, accountants and lawyers for the names of business plan consultants they recommend. A good referral goes a long way to easing any concerns you may have. Few consultants advertise anyway, so referrals may be your only choice.

2. Look for a fit. Find a consultant who is expert in helping businesses like yours. Ideally, the consultant should have lots of experience with companies of similar size and age in similar industries. Avoid general business experts or those who lack experience in your field.

3. Check references. Get the names of at least three clients the consultant has helped to write plans. Call the former clients and ask about the consultant's performance. Was the consultant's final fee in line with the original estimate? Was the plan completed on time? Did it serve the intended purpose?

4. Get it in writing. Have a legal contract for the consultant's services. It should discuss in detail the fee, when it will be paid and under what circumstances. And make sure you get a detailed written description of what the consultant must do to earn the fee. Whether it's an hourly rate or a flat fee isn't as important as each party knowing exactly what's expected of them.


Small Business Development Centers (SBDCs): SBDCs offer a wide variety of information and guidance to individuals and small businesses. If you need help developing your business plan, the SBDC counselors can help by offering assistance with market research, cash-flow projections and more. And, in most cases, the help is free.

SCORE: The Service Corps of Retired Executives, more commonly known as SCORE, is a nonprofit group of mostly retired businesspeople who volunteer to provide counseling to small businesses at no charge. A program of the SBA, SCORE has been around since 1964 and has helped millions of entrepreneurs and aspiring entrepreneurs.
SCORE is a source for all kinds of business advice, from how to write a business plan to investigating marketing potential and managing cash flow. SCORE counselors work out of hundreds of local chapters throughout the United States. You can obtain a referral to a counselor in your local chapter by contacting the national office.

National Business Incubation Association: The NBIA is the national organization for business incubators, which are organizations specially set up to nurture young firms and help them survive and grow. Incubators provide leased office facilities on flexible terms, shared business services, management assistance, help in obtaining financing, and technical support. Its services include providing a directory to local incubators and their services.

Chamber of commerce: The many chambers of commerce throughout the United States are organizations devoted to providing networking, lobbying, training and more. If you think chambers are all about having lunch with a bunch of community boosters, think again. Among the services the U.S. Chamber of Commerce offers is a web-based business solutions program that provides online help with specific small-business needs, including planning, marketing and other tasks such as creating a press release, collecting a bad debt, recruiting employees or creating a retirement plan.

The U.S. Chamber of Commerce is the umbrella organization for local chambers. If you plan on doing business overseas, don't forget to check for an American Chamber of Commerce in the countries where you hope to have a presence. They are set up to provide information and assistance to U.S. firms seeking to do business there. Many, but not all, countries have American Chambers.

Dorm Room Dreams

Dorm Room Dreams
Student entrepreneurs hit the mark with businesses aimed at fellow students.

Sure, there are plenty of college students that charge $5 for a cup at a keg party. Rarer are the students that see opportunities in their collegiate surroundings and start successful businesses aimed at serving other co-eds.

From the educational to the entertaining, these three companies started by twentysomethings are making it by "real world" standards. Read on to find out what inspired them and whether being a student has been a burden or an asset to their growing ventures.

Who: Joe Leary, 21; Peter Handy, 21; and Dan Abrahamsen, 22
What: Moving and storage company aimed at fellow college students
Year Started: 2005
Startup Costs: $30,000 self-funded

Moving On Up: It was in the back of a dirty U-Haul truck where inspiration struck Joe Leary and Peter Handy. Handy had enlisted the help of Leary and a few other friends to help him move his belongings at the end of his freshman year. They found few options for storing their belongings over summer break and instantly knew they could cash in on helping other students facing the same problem every year.

"We were pretty blown away by the demand that took place our first year," says Handy, who recalls the excitement of seeing the orders pour in slowly turn to fear. "We had to basically close the order process down on the website because we had such high demand. We wanted to make sure we could serve our customers the best we could our very first year."

To prepare for the next year, they hired professional moving companies and launched a new backend of the website to provide better customer service. It was a smart move that helped push their first year's sales of $50,000 close to $200,000 the following year.

Successful Students: According to the trio, being full-time students has actually made it easier for them to run their business.

"Probably the most advantageous aspect of being a student entrepreneur has been being here among our own customers," says Leary. Most students don't know he owns the company, so he's able to get honest feedback from them about what they like and what needs to be changed.

"We get a lot of support from the university, which is very helpful," adds Handy. BoxMyDorm is now the official moving and storage company for the student body at Penn State and serves a select number of other college campuses. But the box doesn't stop there.

"We have a very aggressive growth plan," says Handy. "You'll see us next year in a lot of new places across the country."

Mi Maestro
Who: Archie Jeter, 26
What: Live, interactive Spanish classes taught by Latin American tutors via virtual classrooms
Year Started: 2006
Startup Costs: $15,000 from an angel investor

My teacher: Archie Jeter is no stranger to Spanish classes. In addition to his college courses in the U.S., he spent a semester abroad in Madrid, Spain. It was in Guatemala, though, where he learned to embrace the language.

"There was something special about the immersive style of teaching that takes place in Latin America," says Jeter, who spent two months in Guatemala before his senior year. "I saw how much everyone enjoyed learning--and how fast they learned Spanish."

As a self-described "internet nerd," Jeter began wondering how he could connect people in the U.S. that want to learn Spanish with the unique learning opportunities in Latin America.

The answer was Mi Maestro, a site that provides live, one-on-one tutoring with a native speaker located in Latin America. Mi Maestro students book the classes based on their own schedule and click on a link when they're ready to begin the lesson. Once inside the virtual classroom, they have access to a chat feature, an interactive white board and a video window where they can see and hear the tutor in live video and audio.

Double Duty: Jeter wrote his business plan, pitched the idea to investors and analyzed the Latin American market to choose the best location for teachers--all while doing an internship and completing his senior year in a master's program at Florida International University.

"It was what I wanted to do and I had a lot of passion for it, so I made the time and made it a priority."

Final Connection: For Jeter, learning Spanish from a native speaker is crucial to fully understanding the language. "Learning a language is more than just learning words or grammar; it's actually learning the culture," he says. "Through Mi Maestro, you're able to make a real connection between the two."

Who: Ricky Van Veen, 26; Josh Abramson, 26; Zach Klein, 25; and Jacob Lodwick, 26
What: T-shirts with humorous, tongue-in-cheek sayings aimed at twentysomethings
Year Started: 2004
Startup Costs: $4,000 self-funded

Wearable Wit: What began as a fun side business for Ricky Van Veen, Josh Abramson, Zach Klein and Jacob Lodwick is now a successful company that has people wearing the friends' jokes. The team sat down in March 2004 to sketch out 10 shirt designs with the goal of selling the shirts on to fund the then-fledging site. The funny T-shirts were an instant hit with the CollegeHumor fan base.

Tees with 'Tude:BustedTee's shirts range from the topical--"Leave Lindsay A-Lohan"--to the old-school, with inside jokes only their targeted age demographic would understand. A picture of a Nintendo cartridge that says "Blow Me," for example, is only funny for those who owned a Nintendo and remember having to blow the dust out of the cartridges to make them work.

"Culturally speaking, our humor is very on point with our age demographic, which is 18 to 28," says Josh Mohrer, director of retail.

That sort of focused marketing is what makes BustedTees so successful--not to mention they're just plain funny.

Graduation: BustedTees now sells about 1,000 shirts a day and can be found in retail chains like Urban Outfitters. But it was the acquisition by IAC last year that really pushed the small side venture into a bona fide company.

The interactive conglomerate acquired a controlling share of Connected Ventures, the four-company group started by Van Veen and Abramson that includes CollegeHumor, BustedTees, video-sharing site Vimeo and a second T-shirt business called Defunker.

"Despite being owned by this big company, we've really retained our personality in a big way," says Mohrer. "This company has always been run by and for 20-year-olds, and to change that would be a mistake."

Can I Manage My Web Site Myself?

There are a few things you need to consider before deciding whether to hire a Web designer or do it yourself.

By Tim W. Knox

Q: Should I build and maintain my business's Web site myself or pay someone else to do the work for me?

A: When you say "pay someone else to do the work" for you, I am going to assume that you are talking about hiring a professional Web site designer to do the work and not your next-door neighbor's teenage son. If my assumption is correct, then read on. If not, go ahead and flip over to the comics section. You will get no good out of the advice I'm about to give, so you might as well consult Dilbert for your hot business tips.

Should you build and maintain your business Web site yourself or pay someone to do it for you? Let me answer your question with a couple of my own. Number one: Is building and maintaining Web sites the key focus of your business? Number two: Could your time be better spent doing more important things like, oh I don't know, running your business? If your answers were no and yes, respectively, then you have no business building and maintaining a Web site.

Remember this: Every minute you spend on tasks that are not related to the key focus of your business is time spent to the detriment of your business. In other words, every minute you spend focusing on tasks that do not contribute to the growth of your business and thereby increase your bottom line is time wasted.

If you want to be a Web designer, be a Web designer. However, if the key focus of your business is building widgets, it doesn't take a rocket scientist to figure out that your time would be better spent building widgets, not Web sites.

Case in point: I once had a very wealthy dentist ask if I could teach him how to maintain his Web site so he wouldn't have to pay me to do it. Now my teeth had helped put this guy's kids through college, but that didn't seem to matter. At that moment he was more concerned about having to pay for changes to his Web site than my personal oral hygiene. "Sure," I said, "I'll be glad to teach you how to update your Web site, just as soon as you teach me how to clean my own teeth so I don't have to pay you to do it." He got the point. And he charged me enough for the cleaning to keep his site updated for months. Smart man.

Many business owners think they can't afford a professionally designed Web site, and that simply is not true. While the old adage "You get what you pay for" is never more true than when applied to Web site design, having a professional Web designer do the work for you is money well spent. A well-designed Web site can bring you a many-fold return on your investment. You can't say that about too many other collaterals.

While it is best to leave Web site design and maintenance to the experts, it is up to you (or someone considered a subject matter expert within your company) to provide the designer with the content (text and photographs) that best conveys your company's message to your customers. A Web site, no matter how well-designed, is meaningless if it lacks the content required to interest customers in the products you sell or the services you provide.

Here are a few questions that, once answered, will help ensure that your Web site's message is as appealing as its design. Go over these points with the designer before the design process begins, as the answers will help determine the direction your Web site's design should take.

What is the purpose of your Web site? Most business Web sites have two purposes: (1) to educate the consumer and (2) to sell them products or services. If you sell shoes, for example, the purpose of your Web site is to educate potential customers on the quality and durability of your shoes and, as a result, to sell them shoes. If you paint houses, the purpose of your Web site is to educate homeowners on why your services are superior to other painters and sell them on hiring you to paint their house. By defining the purpose of your Web site, you will give the designer the information required to create a Web site that best conveys that purpose to your target audience.

Who is my target audience? Your target audience consists of those folks you want to attract to your Web site: potential and current customers, future and current employees, possible investors and so on. Anyone who might be interested in your company and its products or services is a member of your target audience. Correctly identifying your target audience is vital, since your Web site should be designed specifically to appeal to your target audience.

Put yourself in their shoes (or in front of their computers). Imagine your Web site through their eyes. If you were visiting a Web site such as yours, what would you expect to find and what would you be disappointed not to find? Identify your target audience, then have your Web site designed to fulfill their needs and surpass their expectations.

What content should my Web site feature? Your Web site content should be driven by the nature of your business. If you're a real estate agent, your site should feature photographs of homes you have for sale and information on buying and selling a home. If you own an auto body shop, your site might feature before and after photographs of cars that you have repaired. Remember to determine the purpose of your site, then develop the content to serve that purpose.

What's my competition doing? The last question you should ask is one of the most important: What is your competition doing on the Web? Do a Google search for similar businesses and click around their Web sites. How are their Web sites designed? What message are they trying to convey? Are they doing a good job of conveying that message and, as a result, selling products? What do you like about their Web sites? What don't you like? Make note of the things you like and the things you hate, then share your findings with your site designer.

Remember, you're not stealing trade secrets here. You're just borrowing ideas.

Tim W. Knox is the founder, president and CEO of four successful technology companies: B2Secure Inc., a Web-based hiring management software company; Digital Graphiti Inc., a software development company; and Sidebar Systems, a company that creates cutting-edge convergence software for broadcast media outlets; and Online Profits 4U, an e-business dedicated to helping online entrepreneurs start and prosper from an online, wholesale or drop-ship business.

Can Young Entrepreneurs Get Funding?

Asheesh Advani: Startup Financing

If you're young and in love with the idea of starting a business, these tips will help you in your search for startup financing.

All entrepreneurs have to overcome hurdles when it comes to finding capital for their new business. When customers are few, earnings are scarce and business assets are immaterial, it takes energy and creativity to locate the necessary funds. And these challenges are heightened for entrepreneurs in their 20s, who are often involved with their first formal business venture or just out of school with limited work experience.

In previous columns, I've advised entrepreneurs how to get bank loans guaranteed by the SBA, how to make a "kitchen table pitch" to relatives and friends, and how to approach angel investors. Much of this advice applies equally well to young entrepreneurs; however, there are typically a few extra hurdles that make these sources of financing more difficult to attain for the younger generation of business owners. Some of this difficulty is simply perception, but some of it is a reality.

When it comes to bank loans, you're required to have a good credit history, submit a personal financial statement, and sometimes make an equity investment in your business--all of which may not be easy for most young entrepreneurs to accomplish. For example, a few stains on your credit report from late payments in college could hurt your loan application. And since most twenty-somethings don't own a home or have much equity built up, relying on home equity lines of credit is also not an option.

So the fallback position for many young entrepreneurs is to get bank financing in the form of credit card debt. As I've written in previous columns, this is a dangerous path to go down if your business is in its startup stage and your earnings are unpredictable. Instead, I would recommend getting a debit card rather than a credit card for the first few months of business startup until you're confident that you can forecast earnings and until you develop the habit of making your payments on time. I'd also caution young entrepreneurs from using more than $5,000 per month on their debit or credit card. Anything over that will put you in a different risk category with most credit card companies and, if you end up in delinquency, could really impact your ability to get future financing.

Financing from relatives and friends is also a bit more difficult to obtain for twenty-somethings rather than thirty- or forty-somethings with more extensive networks. Typically, I hear young entrepreneurs tell me that their "family and friend" circle consists of their parents and a handful of close friends--all of whom are either too poor or too uninterested in funding their business venture.

My advice for these entrepreneurs? Open your mind and expand your circle; think about all the different people you know, including friends of friends, who could help fund your business. Many of the country's most well known businesses, including Atlantic Records, Walmart and Subway, were funded after the entrepreneur expanded his financing circle beyond his parents. The founder of Atlantic Records, for instance, landed a loan from his family dentist!

Private investors, or so-called "business angels", are more likely to invest large sums of money with an experienced business owner than with a young entrepreneur. However, there are some business angels who prefer to spread their wealth in smaller investment amounts to young entrepreneurs with promising ideas. So raising $25,000 from business angels is a very achievable goal for most twenty-somethings with a good business concept and solid business plan (though raising $100,000 would be considerably more difficult).

When raising money from high-net-worth investors, young entrepreneurs should aim to pull together small rounds of funding in succession (for instance, $100,000 to $500,000 per round) rather than trying to complete their total capital raise in one fell swoop. Fair warning: It takes longer to close smaller investors than larger investors mainly because the investment isn't a very high priority for the investor (even though it might be your highest priority).

One well-regarded organization that teaches younger entrepreneurs about small-business financing is the National Foundation for Teaching Entrepreneurship. Their website has some good books on the topic of youth and entrepreneurship, many of which are written by their founder, Steve Mariotti, who is a guru in this field. The Entrepreneurs' Organization, formerly the Young Entrepreneurs Organization, is a great networking resource with more than 6,000 members and 120-plus chapters worldwide. Finally, I'd also recommend spending some time on the SCORE website to get financing advice from more experienced entrepreneurs who've lived through the ups and downs of life as a young entrepreneur.

Asheesh Advani is's "Startup Financing" columnist and president of CircleLending, a loan administration company that facilitates loans among friends, relatives and business associates. Get a copy of Circle Lending's freeSmall Business Financing Guidefor startups.

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Cathy Harris is an Empowerment and Motivational Speaker, Non-GMO Health and Wellness Expert, Self-Publishing and Business Coach.