Archive for Startup
Capital, Confidence and Concept
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Conventional wisdom says that starting your new business is risky, although these days “risk” is a relative term.
It turns out that working for someone else is risky, too – as so many people have discovered in the past 18 months. Evidently, joining a union for the perceived promise of stability doesn’t remove that risk, and neither does working for the government.
In the presence of the risks of entrepreneurism, there are, however, two things you need to bring to the table in some combination when you make the leap to start your own business: Capital and Confidence. The need for these two elements exists in a constantly evolving, symbiotic dance because the amount of either that is available at any given moment varies. In a general sense, the less capital you have, the more cajones you need to survive.
Nevertheless, many small business epitaphs have been written by entrepreneurs who had an abundance of both, but who lacked a solid, well-thought-out concept of what they were actually doing. In other words, a bad business idea – or a good business idea executed poorly – has the power to trump everything else when it comes to achieving ultimate success.
The concept of concept is multi-faceted. You can have a general idea of something that might make a successful business model and still have absolutely no idea how to actually make it work. Which is why it makes sense to test your assumptions, build a good support system, increase your business skills and knowledge, and continually adjust your plan as you move forward. That is a powerful reason why business coaching makes so much sense for first-time entrepreneurs and new business owners.
Of these three elements – Capital, Confidence and Concept – the risks of entrepreneurism are only alleviated by improving your concept. Contrary to the assumptions of many first-time entrepreneurs, having what is perceived as “sufficient” capital doesn’t remove the risks at all – it only defines the amount of risk. And, confidence – although absolutely essential to any entrepreneur – can actually increase your risk if it isn’t appropriately balanced by the other two pieces.
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Financial Statements and Fund-ability Disraeli once said that "there are three kinds of lies: lies, damned lies, and statistics." In business, some of the "statistics" that can tell such damning lies are the numbers found on company balance sheets and income statements. Too often, the reality is not accurately reflected in the numbers. Accounting...... - 10 Keys to business survival in a recession It seems to be the consensus among business and political leaders that our economy is worse than it has been in generations. Statistics, for what they are worth, prove it. In other words, most of us have never seen anything like today's economic crisis, and there isn't much in our......
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Assess Your Abilities and Resources
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Because starting your own business is a risky thing to do, it is important to come to grips early on about the potential risks you face. By facing those risks head-on, you can make an informed decision about whether or not you are willing to accept those risks. It also gets you thinking about ways you can reduce that risk.
Here are some important questions you can ask yourself:
- Do you have the financial resources you need?
- Can you afford to put your financial resources at risk? Can you afford not to?
- Do you have enough experience and skills necessary to go into business? If not, do you have access to the experience and skills of others?
- Do you know enough about your market to assess its needs and be able to sense and adapt to its needs?
- Do you have the tenacity that entrepreneurship requires?
- Do you have the discipline you will need to be accountable to yourself about your own performance? Read More→
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Protecting Your Credit in Economic Decline The "credit crisis" has become ubiquitous. It is being blamed for everything from home foreclosures to a plummeting stock market. Many individuals and most businesses are feeling the pinch from the credit markets today. Which is precisely why it is so important to carefully manage and protect your personal and...... - 10 Keys to business survival in a recession It seems to be the consensus among business and political leaders that our economy is worse than it has been in generations. Statistics, for what they are worth, prove it. In other words, most of us have never seen anything like today's economic crisis, and there isn't much in our......
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11 questions that can help you choose the best business entity for you
Posted by: | CommentsSmall business veterans may differ on politics, taxes, management styles and even on business models. But one thing they generally agree on is this: the business world is a dangerous place.
In business, there is potential trouble literally everywhere – contracts, product liabilities, employee problems, intellectual property mistakes, etc. – clogging our courts with litigation and costing small business billions of dollars. Too often, those costs reach beyond just the business world and find the pocket of unwary entrepreneurs that failed to grasp the value of protecting themselves by incorporating. But choosing the right type of business entity to gain the protection you need can be a real challenge.
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Your Business Checkbook Doesn't Tell You Everything It can be a real challenge for a new entrepreneur who doesn't regularly balance his or her personal checkbook to adjust to the demands of business accounting. Business accounting is a critical discipline that the business owner either must learn and adopt - or must outsource to someone else. No...... - Family LLCs: Sharing the Wealth For years promoters have touted the use of Family Limited Partnerships (FLP) as a tool for owning and protecting assets and providing a mechanism for passing them on to the next generation. The FLP has been used so frequently that it could lead one to the impression that the FLP......
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What are “Start-Up” costs?
Posted by: | CommentsTo the IRS, qualified start-up costs are those expenses that a business incurs while in the process of determining whether or not to start a new business, and which new business to begin. This is often called the “whether or which test”. See IRS Rev. Rul. 99-23, 1999-1 CB 998. Any expenses incurred after this decision is made are not considered part of the search and decision-making process, but are assumed to be used to consummate the transaction, and therefore they must be capitalized.
Start-up expenses are fully deductible up to $5,000, with any additional balance amortized over a period of 180 months. Taxpayers make an election to amortize start-up expenses by attaching a statement to the initial tax return of the business.
Related Posts - Husband & Wife Ownership of LLCs in Community Property States I am frequently asked about the impact of a husband and wife owning the membership interest in an LLC in a community property state. It is and interesting issue that is unresolved in many respects. The LLC makes a lot of sense as the entity of choice for couples who......
- Should you change your corporate status? Way back in December 1997, Inc. Magazine published an article that discussed the circumstances under which a business may want to consider switching its corporate status. Among the conditions it discussed were the following: The company needs capital. If you're simply contemplating raising your credit line or bringing in some......
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Your next boss could be you! Prepare now to start your own company
Posted by: | CommentsThere is a nice article on the website called “Business Owners Idea Cafe” written by Idea Cafe CEO Francie Ward, entitled “Get Ready! Your next boss could be you: Turning the threat of downsizing into victory. Prepare now to create your own company.”
In this article, Ms. Ward discussed 7 steps you can take while you still have a job to prepare to start your own company now. You’ll have to check out the article for the details, but the steps include:
- Cinch in your spending appetite
- Check into home refinancing
- Maximize your credit card portfolio (which does not mean max out your credit cards!)
- Review and correct your credit history
- Complete your financing homework
- Test drive the entrepreneurial life
- Talk to entrepreneurs themselves
If you see the writing on the wall at your company, and are thinking of spreading your wings into the business world as a result, this is a quick, but worthwhile read.
Related Posts - Financial Statements and Fund-ability Disraeli once said that "there are three kinds of lies: lies, damned lies, and statistics." In business, some of the "statistics" that can tell such damning lies are the numbers found on company balance sheets and income statements. Too often, the reality is not accurately reflected in the numbers. Accounting......
- Family LLCs: Sharing the Wealth For years promoters have touted the use of Family Limited Partnerships (FLP) as a tool for owning and protecting assets and providing a mechanism for passing them on to the next generation. The FLP has been used so frequently that it could lead one to the impression that the FLP......
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