Why 2016 Is the Year of the Entrepreneur

starting a business
Provided by GoBankingRates

As 2015 comes to a close, it’s time to start planning your New Year’s resolutions, where you vow to get better with your finances, save more money and find a more fulfilling career. For some, saving more comes down to learning how to say no to small purchases. And for would-be entrepreneurs, sometimes the hardest part about starting a business is taking that first step. We asked best-selling author, entrepreneur and career coach Josh Felber for his top money tips for 2016. Felber offered two core pieces of advice:

“To create real wealth, you must quit spending your future wealth on goods and services that you want today but deprive you of wealth long term.”

“2016 is the year to break free from mediocrity and society’s ‘norms.’ Now is time to quit your 9-to-5 job and become an entrepreneur. Start becoming the true you and creating the lifestyle you are destined for.”

Felber is a finalist in GOBankingRates’ “Best Money Expert”competition held this month in collaboration with Ally Bank. He also won the title of “Best Expert” in the 2014 contest. See why 2016 is the year for you to save more and break out your inner entrepreneur.

Cut Spending to Create Long-Term Wealth

Felber’s first money tip is easy for anyone to accomplish in 2016. He asks you to reconsider your immediate wants and weigh them against long-term goals. You oftentimes might explain away the cost of a cup of coffee or night out, but spending money frivolously every day or every other day weighs down your monthly budget. Poor spending habits can also leak into your business when you ultimately pursue becoming an entrepreneur.

Concentrate spending on your needs so the money you might otherwise have spent can be put toward a new business or retirement fund. Real wealth is built and cultivated over time after all.

If saving is a hurdle for you, start small: Cut one small purchase you make every day or week. Once you have adapted to living without that one small purchase, cut out another expense. By focusing on one cost-cutting tactic at a time, you can slowly build up how much you save every month without completely changing your lifestyle come January.

For small business owners and to-be entrepreneurs, start picking up skills that can save you money down the road. Practicing your writing skills, making cold calls and even learning how to maintain a website can help you curb the costs associated with hiring additional personnel to handle smaller tasks.

Why Start Your Business in 2016?

Felber suggested quitting your job because, too often, people fall into the routine of working full-time making other people rich. But if you’ve always dreamed of being an entrepreneur, you won’t ever find a good time to start your own business so long as you’re complacent at work. If you’re scratching your head over how to get started, make a list of the things you’re passionate about and your unique skills. You might discover that your flair for photography, SEO skills or knack for artisan baked goods might be in demand and lend themselves to starting a business.

For budding entrepreneurs, banks have your back. Small business loans are seeing higher rates of approval at major banks, according to a report by Biz2Credit, an online marketplace for small business loans. In fact, the approval for these types of loans hit their highest level since 2011, when Biz2Credit first began tracking them.

Between January 2014 and March 2015, Wells Fargo lent more than $22.6 billion to small businesses as part of a five-year initiative to support businesses. And while approvals at small banks and credit unions have remained relatively flat, 80 percent of small-business owners will do preliminary research on loans online, and that amount is expect to rise in 2016.

Alternative lending and crowdfunding sources are on the rise, too. In an industry report conducted by Massolution, a crowdfunding research firm, the total global capital raised through crowdfunding is expected to hit $34.4 billion this year, up from $16.2 billion in 2014 and $6.1 billion in 2013.

Entrepreneurs Are Happier Flying Solo

Work satisfaction — or rather, dissatisfaction — shows how pursuing entrepreneurship can increase overall happiness. Only 48.3 percent of U.S. workers are satisfied with their jobs, according to a 2015 The Conference Board Job Satisfaction survey.

On the other hand, entrepreneurs who make their own rules and set their own hours appear to be happier, according to the Global Entrepreneurship Monitor 2013 Global Report prepared by Babson College. The report surveyed more than 197,000 people. Even entrepreneurs with startups were more satisfied than typical U.S. workers; entrepreneurs with established businesses were even happier.

Consumers Prefer Small Businesses

Consumers are also more likely to take their money to small businesses, according to a 2014 report by AYTM Market Research. The report found that consumers like working with small businesses because it allows them to support the local economy and receive more personal service. Roughly six out of 10 consumers also said they would be willing to pay higher prices to support small businesses.

Ultimately, Felber’s biggest takeaway is that you need to be in control of your lifestyle. Take chances and pursue your passions. When it comes to building wealth, learn to reel in your spending and focus on long-term goals over short-term wants.

Written by Paul Sisolak of GoBankingRates

(Source: GoBankingRates)

Facebook Plans to Use Your Location to Lure New Advertisers

Spencer Platt / Getty Images
Spencer Platt / Getty Images

More than 45 million businesses have Facebook Pages, but only 2.5 million pay Facebook for advertising. That means a lot of businesses understand the importance of being on Facebook, but aren’t yet convinced the ad dollars are worth it.

Facebook is trying to fix that. One idea: Give small businesses more targeted advertising and a better idea of who’s walking around their stores. Literally.

The company is rolling out two new ad products intended to attract small business advertisers. The first is a new tool that can tell business owners the demographic info for people in and around their physical store. Assuming you have location settings turned on within the app, Facebook already collects info on your location. Now it will share that info with advertisers — in bulk, so no individual users are identified —  so they can learn about the foot traffic near their shops, like gender and age demographics.

The first is a new localized ad that lets businesses with multiple locations create different ads for each site. So a coffee chain could easily show one ad to people in Brooklyn, and a separate one to users in Long Island.

Both features, while relatively incremental on their own, give a pretty good indication of how Facebook plans to grow its list of advertisers. The company is also thinking about in-store push notifications; it started handing out free beacons to retailers over the summer, although these new ad products aren’t related to that effort, according to Matt Idema, head of monetization product marketing at Facebook.

Still, you could see how they might complement each other down the road. And encourage more small businesses to start handing Facebook their money. The new features are rolling out to a small group of U.S. retailers beginning Thursday.

Written by Kurt Wagner of Re/Code

(Source: Re/Code)

These Wildly Successful Entrepreneurs Once Were Homeless

Rags-to-riches stories have been popular throughout history, proving that you don’t have to be privileged or have things handed to you to be a success. These Fortune 500 success stories encapsulate the idea that hard work, determination, and a positive spirit are the necessary ingredients to bootstrap your way out of poverty, off the streets and into the realm of millionaire and even billionaire.

Chris Gardner

© Provided by Entrepreneur Media, Inc

Before he became known as an entrepreneur, motivational speaker, CEO and author, Chris Gardner and his son were living on the street after his wife left him and he was trying to subsist on very little money. His background was not much prettier, having grown up in the midst of domestic violence, poverty, alcoholism and more barriers.

While he could have given into these barriers and followed that same path, Gardner wanted something completely different for himself and son. Now, he runs Gardner Rich LLC with offices around the country, is a multi-millionaire and even had a movie made from one of his books that starred Will Smith called “The Pursuit of Happyness.”

Linda Singh

© Provided by Entrepreneur Media, Inc

Although she is a high-school dropout and runaway who spent time as a homeless youth and experienced poverty and sexual abuse, Linda Singh completely transformed her life. Even when she was struggling to stay off the streets, she still attended high school as long as she could and pulled good grades before having to give it up. She has become a model of female leadership in careers that often don’t see women in these roles.

She has previously served as a managing director at Accenture and as a Major General in the U.S. Army. Now, she is a Major General, leading Maryland’s National Guard through some very tough situations, including the Baltimore riots after the funeral of Freddie Gray. Her time on the streets and in Afghanistan have served as the proving ground for a woman who is not afraid to take on dangerous situations and high-pressure conflicts. Like many other leaders, Singh has proven that a successful leader often has come from tough roots and overcome significant adversity. She may not be valued in the millions, but her success story is priceless and has garnered her recognition and high-powered positions.

Manny Khoshbin

© Provided by Entrepreneur Media, Inc

Iranian-born Manny Khoshbin overcome hard times to become wildly successful. His family arrived in America when he was a teenager and he quickly saw the opportunities to work hard and create wealth.

However, it took many failed ventures and sleeping in his car for a time while out of work before he found the venture that aligned with his skill set. Khoshbin got his real estate license and became a loan officer, then started a realty and mortgage company focused on distressed and bank-owned properties. Now, he oversees multiple companies that focus on commercial real estate. He continues to seek new opportunities for his entrepreneurial spirit. Once having nothing, Khoshbin is now valued in the multi-millions.

Dani Johnson

© Provided by Entrepreneur Media, Inc

Being successful doesn’t come from college degrees. Destiny Global CEO Dani Johnson proves a great idea and hard work is enough to go from a broke, homeless cocktail waitress to a millionaire in just a couple of years.

Since her initial foray into entrepreneurship with a weight loss company, Johnson has expanded her empire to include other services related to helping people improve their relationships, finances. and lives. She has authored multiple bestselling books and offered her expertise on numerous television shows and media outlets. Becoming a millionaire many times over, she now gives away over a million dollars each month to help children in need around the world to remind herself where she has come from and what more she can accomplish.

The Graduates of TechShop

© Provided by Entrepreneur Media, Inc

While there are many profiles to be shared, one of the most interesting is the idea of a company that is speaking directly to currently homeless individuals with talents and big ideas but lacking the opportunity to prove themselves. Many success stories have come from TechShop, a company that offers all the equipment, tools, mentoring and even financing to help all types of individuals reach their goals.

For some, this assistance has led to getting off the streets, receiving funding and starting companies that are on their way to growth. As chairman and founder Jim Newton noted, “Everybody has creative abilities but people just don’t express them. I mean, I see people come in here that are afraid to try anything. We give them some classes and some encouragement. And they have some success with their projects. And you see them just change. You see them light up. You see them say, ‘Wow, I really can do this.’ This is stunning. They’re stunned.”

A VentureBeat article showcased some of the homeless who have capitalized on this opportunity to turn their ideas into viable businesses. Now, they are off the streets and leading their own companies, generating wealth and creating jobs for others. Many are finding ways to return the favor by opening the door to opportunity for those that have simply hit hard times.

In addition to these turnaround stories, many other famous faces have been homeless early on in their lives, including Jim Carrey, Daniel Craig, Dr. Phil, Suze Orman and more. Others had hard times but surpassed these to become wildly successful, such as Steve Jobs, Larry Ellison, and J.K. Rowling just to name a few.

It just goes to show that no barrier is insurmountable to those who work toward success without becoming discouraged by setbacks or initial failures. The lesson here is you can’t focus on being down but must, in the face of any and all adversity, look forward and never give up.

Written by John Rampton of Entrepreneur

(Source: Entrepreneur)

10 Small Businesses You Can Start With Less Than $1,000

© Patrick Brassat/shutterstock
© Patrick Brassat/shutterstock

Starting a small business doesn’t have to cost a fortune, even if it can potentially earn thousands in revenue. Here are 10 businesses, online and traditional, that require less than $1,000 to start and even less to run.


  • Start-up costs: $0 to $700
  • Tools and equipment: laptop, high-speed Internet, word processor

Private tutors are in demand through all education levels, subjects, and ages. Students preparing for college entrance exams, second-language learners, and children struggling with reading comprehension are just a few of the types of clients private tutors work with, and parents, adult learners, and college students are willing to pay upward of $50 an hour for the help. Luckily, most of the equipment needed to begin a tutoring business includes regular household items, such as a working computer and high-speed Internet. Private tutors also need reference books, such as a dictionary, thesaurus, or style guide. All of the necessary materials, including a computer, can be bought for less than $1,000. There are no special credentials or licenses required to begin tutoring services; a thorough knowledge of a field and basic tutoring skills are all that’s needed.


  • Start-up costs: depends on the state and existing credentials
  • Tools and equipment: reliable transportation, website, working cellphone

Most anyone with solid, reliable transportation and experience caring for people with disabilities or the elderly could start a lucrative in-home companionship business. In-home companions provide nonmedical services and care to those needing help with daily activities. An in-home care business can be started with $1,000 or less, with initial costs potentially earned back in a month or two. Depending on the location and credentials, in-home companions can earn $9 to $30 an hour. CPR, First Aid, or defibrillator certification provides clients and their primary caretakers with a sense of security and can boost an in-home companion’s marketability. The American Red Cross, community colleges, and other training centers offer these courses, which can cost less than $100. In addition to the suggested certifications, licensure may be required, depending on the state. All in all, certifications, licensure, and marketing efforts can total less than $1,000.


  • Start-up costs: $0 to $700
  • Tools and equipment: fitness apparel, transportation, certification, liability insurance

Personal fitness trainers work with a wide range of clients, from people battling obesity to prospective brides and grooms getting ready for their wedding. Personal trainers are in high demand, and the Bureau of Labor Statistics predicts this field will continue to grow through at least 2022. Technically speaking, there are no major requirements to start a personal fitness business, although having a certification, such as an ACE Personal Trainer Certification from the American Council on Exercise, could increase a noncertified trainer’s client base and hourly rate. The ACE’s standard personal fitness trainer course starts at $599, which includes materials. With some personal trainers charging up to $100 an hour, they could earn in one day what they spend on start-up costs. Other than a certification, personal trainers will need appropriate fitness apparel and reliable transportation. Some trainers opt to have liability insurance, which covers some or all of the costs of at-fault injuries.


  • Start-up costs: $0 to $1,000
  • Tools and equipment: computer, camera, website/online portfolio, business license, tax license

Thankfully, expert photographers attest that a good picture is the result of skill, not an expensive camera. Several photographers have won awards for photos taken with a smartphone. But a basic DSLR, or digital single-lens reflex, camera is the type of camera that will most likely be needed to capture money-making moments, and eBay carries top-brand DSLR cameras for less than $500.

A used camera will be even cheaper and still get the job done, leaving money for the necessary lenses to fit the camera body as well as for photography courses. Many photographers take advantage of free social media websites to showcase their work, including Facebook and Instagram, or make their own sites with free services such as WordPress.

Specialty photographers sell their pictures online, at art fairs, or at flea markets. Stock photographs are gaining popularity as online businesses and ecommerce continues to expand. The website Stock Photo Secrets lists the latest photography trends in stock photography. Depending on the home state, a professional photographer may be required to have a sales tax license and a business license.


  • Start-up costs: $0 to $700
  • Tools and equipment: laptop, recording device, translation software

Initial costs for independent translator businesses are low, especially for those fluent in two or more languages and who don’t need additional training. The basic equipment to start professional translation services are just a computer and word processor to type documents, a recording device (these days, that’s often a smartphone), and software that speeds up the most repetitive parts of the job. With an increase in competition from software, it helps for translators to have a specialty, such as in the health fields, and certification. Several agencies offer certification, including the American Translators Association. That might cost $300, but in 2012, the average translator earned nearly $48,000 a year.


  • Start-up costs: $20 to $100
  • Tools and equipment: high-speed Internet access, laptop, jewelry kit, online store

Unique or custom jewelry is a top-trending and top-selling item online. Etsy, an online marketplace for unconventional products, lists jewelry as one of its most sold items, and it is just one of several, along with Shopify, Storenvy, and Bigcartel, where people can capitalize on their creativity. Artisans should research which ecommerce system will work best for their needs; for instance, at Etsy, probably the best-known name for starting an online boutique, there are no start-up costs, but the site charges to post an item, collects a percentage of the final sale, and has limitations on the number and styles of listings.


  • Start-up costs: $0 to $500
  • Tools and equipment: computer, marketing experience, writing skills, search engine optimization knowledge

Social media marketing strategists use their knowledge of social media platforms, such as Facebook, Instagram, Snapchat, and Twitter, to increase companies’ presence and revenue. With the proper knowledge and technical savvy, social media experts can build a client base and make money without having to spend too much. In fact, web-savvy people can start a social media marketing consultancy with minimal equipment. With a computer and reliable Internet access, the only other thing needed is skill: marketing experience, writing skills, search engine optimization knowledge, and a knack for social media.

Once equipped, an entrepreneur can begin reaching out to potential clients, including family, friends, and businesses with a low social media or Internet presence.


  • Start-up costs: cost of software, website, cost to print fliers
  • Tools and equipment: a word processor, such as Microsoft Word, additional proofreading software

Becoming a professional proofreader doesn’t require a lot in equipment or start-up costs. For people with an eye for detail, knowledge of one or more style guides, and the ability to withstand looking at the same document for long periods, professional proofreading can be rewarding and profitable. There are, however, more people seeking proofreading gigs than there are gigs. To gain an advantage over the competition, a proofreader should likely spend most of their start-up costs on marketing efforts, including, if free options aren’t robust enough, paying a designer to create a website showcasing a professional portfolio. Print and display fliers may also be necessary — and even ad space in a newspaper.


  • Start up costs: $20 to $1,000
  • Tools and equipment: varies according to the project, but can include a drill, saw, tape, paint, levels, measuring tape

The great thing about starting a small furniture repurposing business is the relatively cheap initial costs. Most of the furniture, including chairs, end tables, and dressers, can be found near trash bins, on side streets, or in thrift stores. Family and friends are also good suppliers, as they may have unwanted furniture they are willing to sell cheap or give away.Home improvement and arts and crafts stores sell most of the tools needed to give old, dilapidated furniture a new look. A drill, tape, paint, paint brushes, sanding sheets, and other resources won’t total more than $1,000 for a first repurposing job. Hosting a weekly yard sale, creating an online shop, or setting up at a local flea market can help make hundreds or thousands of dollars off repurposed furniture.


  • Start-up costs: $500 to $1,000
  • Tools and equipment: varies according to the project, but can include a sewing machine, serger, measuring tape, ruler, and professional scissors.

Small-scale tailors don’t need a large space to mend or design clothes, and new tailors can create a small, functional office space within their own homes. What tailors don’t spend in retail space, they will spend on equipment, as professional-grade tools are required for quality work. High-quality sewing machines range in price from $200 to upward of $1,000. For basic sewing projects, a machine in the $200 to $500 range will suffice. If a market is saturated with tailors, newcomers need additional skills that set them apart. Specializing in wedding dresses, children’s clothes, or costumes can keep a new tailor ahead of the game in clients and revenue. Jo-Ann Fabric and Craft Stores, Michaels, Creativebug and several other craft stores offer free or cheap courses on arts, crafts, and sewing.

Written by Tahirah Blanding of Cheapism

(Source: Cheapism)

Entrepreneurship: The Costs aren’t so Black & White

© (Getty Images)
© (Getty Images)

With your own product or service already in mind, starting your own business might seem like a piece of cake! However, in reality, it is not so easy considering how costly getting your own business up and running actually is. Becoming your own boss entails a significant investment. So before you dive into your future as an entrepreneur, make sure that you are aware of all of the expenses that are attached to this life-changing venture.

First, there are the license costs. Depending on what your business is going to be, there will be specific permits that you will have to apply for. For example, there are LLC licenses, fire department permits, county permits, health permits, and even alcohol permits. On top of all of the costs to purchase the permits, you might need to spend money to hire professionals like lawyers or accountants in order to obtain them. So be sure that you are thoroughly educated about what permits and licenses you will need for your particular industry, and factor in the total costs of them into your budget!

Just as a precaution for the unexpected, you will also need to insure your business as well. It is not a must-have, however, it is a good safety blanket just so you don’t lose all of your hard work over a freak accident. And these insurances entail a large chunk of money! Talk to an insurance professional about the specific insurance type that is suitable for your industry and become knowledgeable of the policies of your insurance just so you are not paying for what you don’t need.

Taxes already haunt you enough in your everyday life, however prepare for even more of a burden once you start your own company. As soon as you open your own company, you will be charged with a self-employment tax. And the downside of this tax is that it is required even if there is no revenue funneling into your pockets. Therefore, you need to be aware to deduct the amount of tax you need to pay for your business from your earnings when you are looking at how much money you have profited through your product or service, and allocate that amount to your business’ budget.

Finally, the costliest aspect of starting your own business is: time. As cheesy as it sounds, time is, in reality, money! Being your own boss isn’t all fun and games all the time, but it requires you sitting down and completing tedious tasks as well. In order to be well prepared as you start your venture, you need to develop the patience and willpower to pay your bills on time and keep track of payroll. There will be some give and take with your schedule and it might even interfere with your personal life, so set your priorities early on and allocate your time accordingly.

All of these are just some of the factors that paint a more realistic picture as to the costs of running your own business. Many people may dream of being their own boss. But before you accomplish this dream, be sure you consider all the costs that are needed make your entrepreneur wishes come true!

(Source: U.S.News & World Report, SBA, Entrepreneur)

Costs from Regulations Pile Up, Hurt Small Business Profits

© AP Photo/Jae C. Hong
© AP Photo/Jae C. Hong

NEW YORK — It’s getting more expensive to be an employer and small business owners say that’s making it harder for them to make money.

The health care law, minimum wage increases and paid sick leave laws in some states and cities are increasing costs. Small companies also face the prospect of higher overtime expenses under a proposed federal regulation.

“We’re going beyond the point where we can comfortably operate a functioning business and meet the requirements of these laws,” says Diana Lamon, who owns a Los Angeles restaurant, Poppy & Rose and a food truck, Peaches’ Smokehouse and Southern Kitchen, with her husband Ryan.

The growing costs the Lamons face include:

—The $9 hourly minimum wage in the city will rise to $10.50 next July, the first step toward a $15 minimum in 2020.

—They may be required to offer health insurance starting Jan. 1 if they go ahead with plans to offer dinner at the restaurant, which now serves breakfast and lunch. The expansion could give the Lamons 50 or more workers, the point at which employers must provide coverage.

—Employees must be given paid time off when they’re sick under a new California law. When workers are out sick and need to be replaced, an employer pays two salaries.

—Four of the Lamons’ employees would have to be paid overtime under the proposed Labor Department regulation that would raise the threshold at which salaried workers are exempt from overtime. The regulation is expected to become final early next year.

Owners faced with these accumulating financial demands might be saying, “it’s always something.” But dealing with continual challenges is part of running a small company, says Phillip Kim, a professor of entrepreneurship at Babson College.

“It’s the nature of doing business, and those who can be resourceful and be able to be nimble in the process will have a better chance of succeeding,” he says.

The Lamons are looking at ways to increase revenue and cut expenses. One option is catering; their restaurant is surrounded by businesses and new high-rise apartments and they believe customers will be interested in ordering food for events and parties. They’re considering growing their own produce in a rooftop garden.

Higher expenses from regulations come on top of other rising costs. The Lamons are paying more for water because of California’s severe drought. Eggs, a staple in a breakfast restaurant, cost 30 percent more this year because of a bird flu that forced farmers to destroy thousands of hens.

At his restaurants and bookstores, Stephen Mayer is also trying to keep costs from wiping out profits.

“It’s piling on, health care, sick time, a little crazy,” says Mayer, who co-owns a restaurant and bookstores in San Francisco and is sole owner of a San Jose, California, restaurant.

A 14 percent increase in San Francisco’s minimum wage from $10.74 to $12.25 on May 1 will cost Mayer’s restaurant, Cafe de la Presse, about $225,000 a year, more than half the $400,000 profit it made in 2014, Mayer says. He’s already expecting that when the government’s overtime regulation becomes final, staffers at the restaurants and bookstores will work seven hours each day instead of eight. They’ll still be full-time workers, but if they end up working up to an hour past their shifts, the companies won’t have to pay overtime.

A thinner staff is an easier alternative than raising prices, especially in a bookstore, Mayer says.

“If (the price on) a book says $7.95, you can’t charge $8.95,” he says.

Karen Port is concerned about a bill to raise the current St. Louis minimum wage to $11 by 2020 from the current $7.65. She’s paying between $600 and $1,200 a month for each of her four employees for health insurance, and she’s worried that her costs from the health care law will keep going up. She has another problem: Many people haven’t been buying luxury items like the hot tubs that cost thousands of dollars that she sells at her business, Mirage Spa & Recreation. Raising prices is out of the question.

“I wonder about how I’m going to cover all of the bills that seem to be increasing at my current level of sales,” Port says.

Written by Joyce M. Rosenberg of Associated Press

(Source: Associated Press)

How to Start a Business Without Quitting Your Day Job

Bill and Lauren Elward both held demanding full-time jobs when they started their online business, Castle Ink, a Greenlawn, N.Y.-based operation that sells remanufactured inkjet cartridges, laser toner, and ink refill kits. At that time in 2005, Bill was doing web analytics and marketing for the College Board and Lauren was a high school English teacher. Both were avid recyclers and wanted to build a business that tapped into that passion, but they weren’t willing to give up the security of steady paychecks.

Instead, they worked on the business at night and on weekends, sinking $5,000 from their savings into getting their website up and running. By 2007, with cash flow from the business picking up, Lauren, who was pregnant and on maternity leave, decided to quit her job.

Thanks to some smart decisions to outsource tasks such as order fulfillment, content development, and social media, she now is able to run the business in just a couple of hours a day and care for their two children, ages six and eight, without outside help. Bill, who now works for the finance site Bankrate, puts in about five hours a week on weekends or on the train ride home from work.

Their approach has paid off. Castle Ink broke $1 million in revenue in 2012, and even with the market for its cartridges softer today, it still brings in $250,000 to $500,000 in annual revenue, says Bill. Meanwhile the couple still reaps the stability and benefits from his job, such as his health benefits and 401(k).

Many would-be entrepreneurs fantasize about telling their bosses to shove it, but small business owners don’t always quit their day job right away. Research by Gallup in 2014 found that among startups under a year old that have fewer than five employees, only 38% of founders live on what they earn from the business. Fifty-four percent support themselves with another job during the first year. The picture changes later, when they are two to five years old. By that time, 51% make enough money in their business to rely on it as their main income and 44% are still relying on a day job.

Still, it’s not easy to start a business while remaining employed elsewhere. Beyond the issue of sheer stamina, entrepreneurs have to be careful not to jeopardize their current job. Here are some tips on how to navigate a launch while you’re still on someone else’s payroll.

1. Know what you’ve signed. 

Make sure you didn’t sign any agreements that prevent you from moonlighting or a non-compete agreement that will prevent you from launching your business.

© REX/Caiaimage Make sure you didn’t sign any agreements that prevent you from moonlighting or a non-compete agreement that will prevent you from launching your business.

Remember that sheaf of paperwork HR gave you when you started your job? Check your file cabinets and make sure you didn’t sign any agreements that prevent you from moonlighting or a non-compete agreement that will prevent you from launching your business for a certain period—and get legal advice if necessary. When in doubt, look to pivot a bit from the work you do now, since many employers will balk if you seem to be going after the same clients. “Try to find a different market than your current company is going after,” advises small-business consultant Crystal Stranger, president of 1st Tax in Honolulu and author of The Small Business Tax Guide.

2. Make the most of business travel. 

If you work long hours at your day job, it may be hard to squeeze in time to work on your startup when you finally get home. Cincinnati entrepreneur Bill Fish found a solution when he co-founded an online marketing company, Text Link Ads (now known as Matomy SEO) in 2001. At the time, he was spending every other week in Austin or Houston, Texas, for his job and had down time in the evenings to devote to his startup. “I was able to work on my business the vast majority of the time while I was traveling,” he says. “I was away from my fiancé and didn’t have anything else to do.”

The time he put in gave the company a running start, and the company grew to the point it was acquired by a private equity firm in 2006. Fish opted to stay on to run the company, and by the time he left in 2012, he says it hit $25M in annual revenue. Since then, he has moved on to another startup, ReputationManagement.com, an online guide where he is co-founder.

3. Turn your employer into a client. 

It is advisable to find clients before you quit your day job to build the cash flow you need to make the leap.

© REX/Monkey Business Images It is advisable to find clients before you quit your day job to build the cash flow you need to make the leap.

Finding clients before you quit your day job will help you build the cash flow you need to make the leap. Often, the best place to start is your current company. “I’ve had a lot of clients who are able to change their existing jobs to consulting and get paid as 1099 workers,” says Stranger.

Koel Thomae, founder of yogurt company Noosa in Bellvue, Colo., used a similar strategy. After leaving a position at former employer IZZE, a beverage maker, in 2008, the natural food industry veteran secured a consulting gig from a former colleague. Thomae, who had no children at the time, typically signed off from the consulting project at 5 p.m. and shifted to working on Noosa in the evening, often until 1 a.m.

“It allowed me to make enough money to contribute to my family but it also gave me the level of flexibility I needed,” Thomae says. “If I had to go to a meeting with the health department, it gave me this very flexible schedule to kind of do it all.”

By 2010, she had officially launched Noosa and it took off quickly, thanks to all of the advanced legwork she had done. Today, Noosa employs 100 people and the business is on track to generate more than $100 million in revenue, she says.

4. Sock away what you earn.

© Tetra Images/Corbis

If you’re making money on top of your salary, it’s tempting to splurge on extras, but Fish recommends banking all of it. At Text Ad Links, he and his partner lived on their earnings from their jobs while launching the business, which freed cash to reinvest in the startup. His advice: “Prepare not to take a single dime out of the business for 12 months,” Fish says.

Greg Van Ullen used a similar approach at OMilk, a Brooklyn, N.Y.-based maker of dairy-free milk that he co-founded with his wife Julie in 2011 and that today is sold in stores such Whole Foods in the Northeast. At the time he was doing online marketing for the charity Smile Train. After introducing the product at a local flea market and seeing immediate demand, they launched a home delivery service. For the first five months, Van Ullen did the deliveries himself but found it taxing to juggle with his job—in part because the milk last only eight days. “I was losing my mind,” he says.

Finally, he realized it was time to quit. “In my own situation it was easy to make the call because we didn’t have enough time to actually produce our product to meet the demand—which is a really good situation to be in,” he says. “It let me know that if I made this leap and did it full time, I would be able to sell it. It made me feel a lot safer.”

That’s not usually a how entrepreneurs describe the startup experience, but as his experience shows, living on the edge isn’t the only way to launch a successful business.

Written by Elaine Pofeldt of Money

(Source: Time)

Many US Retailers Not Ready for Fraud-Proof Cards

© Provided by CNBC
© Provided by CNBC

By the fall, millions of Americans will have gotten new high-tech credit and debit cards, part of a broad effort across the financial industry to reduce fraud.

But many U.S. small businesses are unprepared for the changeover, which could leave them on the hook for any fraudulent transactions that occur after the shift happens.

The new credit cards are called EMV (Europay, Mastercard and Visa), and include a microchip intended to lower fraud.

While the new credit cards will still contain the current standard magnetic strip to allow for backward compatibility, they are designed to be read through their more secure microprocessor chip that creates unique data with every transaction.

This dynamic element makes EMV cards almost impossible to counterfeit; The United Kingdom saw a 32.5 percent reduction from 2004 to 2011 after the introduction of chip-based cards.

Credit card companies in the United States are pushing businesses to follow suit, and start accepting the microchips through a liability shift on Oct. 1, when American Express  (AXP), Discover  (DFS), Maestro, Mastercard  (MA) and Visa (V) will relinquish their liability for EMV card-present fraud to any businesses not accepting EMV.

While bigger retailers like Target  (TGT) and Wal-Mart  (WMT) have already made the adjustment, and are now accepting microchip cards, the transition has been more difficult for many small businesses. According to a recent Intuit study, only 42 percent of small businesses in the United States have committed to accepting EMV credit cards. Those that don’t will soon take over financial and legal liability for fraudulent activity in their transactions.

The liability change was designed to give businesses time to conduct research and make smart decisions about upgrading their technology.

“Liability shifts have been used very effectively around the world and what they do is instead of a hard mandate that would require all businesses—both issuing banks and merchants—to transition quickly at the same time, it allows each business to make their own decision about the investment to migrate as well as any resulting costs and liabilities,” said Carolyn Balfany, senior vice president of product delivery–EMV, MasterCard.

More than half of the small businesses who do not intend to switch cited the cost of a new point-of-sale terminal as their primary barrier, while around a quarter said that the time necessary to research the tech and educate their employees was stopping them from moving forward.

However, according to Intuit, 85 percent of those small businesses said that they didn’t know about the liabilities they’ll be taking on, and 86 percent said that they might not be able to handle them.

Sally Cook, owner of Heirloom Bakery in South Pasadena, California, said she hadn’t known about the liabilities her business will be taking on in October. Cook switched her business over to a new EMV-capable system called Clover a few months ago because it saved money on credit card processing, and learned about chip cards in the process.

“When they came and pitched the product, they informed me that there were some changes that needed to take place and they were already in place on the Clover system,” Cook said. “I do know that there was a shift in terms of how certain things would be processed that we would need to comply with, I think, by the end of this year. At that point we would have to have everything in place, and that was another reason we were happy to switch over.”

However, even with smart-chip capabilities, Heirloom has been processing EMV cards using their magnetic stripe.

“We just slide all of them the same way,” Cook said. “We haven’t been given any other information from Clover in terms of how to process them.”

The new processing system made accepting credit cards cheaper for Cook, and for businesses already using mobile readers, the switch requires ordering an updated version from their provider at a cost of around $30. More traditional small point-of-sale systems can be found online for between $150 and $450, but those with more complicated systems could have higher research and technology costs.

However, the cost of a new point-of-sale system is far from the biggest expense a business could face if it does not have an EMV terminal and accepts a fraudulent credit card. Sixty-three percent of all the small businesses surveyed claimed some level of credit card fraud on an annual basis, with an average of 7 percent of transactions being fraudulent.

Those transactions add up; in 2012, the United States saw $5.2 billion in credit fraud loss, 47.3 percent of the world’s total. For smaller companies, the losses incurred could be enough to push them out of business.

A recent survey from MasterCard says that American consumers are ready for the shift to EMV. In fact, 77 percent of them are concerned about their financial information being stolen or compromised. Balfany stated that accepting EMV cards might help businesses reassure their customers.

“Consumers actually expect merchants to upgrade and what consumers tell us is that they see a merchant that upgrades more positively because they see them as being willing to invest in their security,” Balfany said.

Written by Sofia Goode of CNBC

(Source: CNBC)

3 Tips to Make Big Money in Your Business

I know I’m not the only one seeing the constant Facebook ads and group posts:

“I made $45K in my first month of business and you can too!”

“I got five high end clients this week. Let me show you how.”

Am I crazy, or is this stuff everywhere right now?

Obviously, making big money in business isn’t a bad thing and if it’s something you want, you should aspire to making it happen.

But here’s my thing. I’m feeling like the notion of big overnight paydays are screwing with the mindset of most entrepreneurs that are still just trying to get things up and running and that this 5- and 6-figure month chasing is keeping far too many people stuck. They’re trying to make a lot of money, before they’ve made any at all.

I’m a firm believer that, especially in business, you’ve gotta crawl before you walk. I certainly had to have $2K months before I had $10K months and had to sell less expensive, short term coaching packages before I booked six-month clients or high-end intensives. Do some people do it quicker? Sure, but it’s the exception, not the rule.

If you’re at the stage I was as a freelancer, hustling to get your business off the ground, but struggling to get those first few clients or sales, here are my three big tips for getting things moving in the right direction:

There is no shortage of specific problems and issues out there that you can solve.

© Cultura/REX There is no shortage of specific problems and issues out there that you can solve.

1. Start Bite Sized

Here’s something I find kinda funny. We all feel like our business is one among a sea of competitors, and that might be true in a lot of cases, but here’s one thing I can promise you: there is no shortage of specific problems and issues out there that you can solve.

Get out there and start solving those problems, even if it’s one specific issue at a time.

Think about it this way: if you’re just starting out or not making money quite yet, wouldn’t you rather sell ten super specific offerings at $149 a piece, than struggle to sell a $1,490 package?

Don’t forget those ten initial clients will result in ten glowing testimonials, not to mention ten people who most likely loved working with you and want to move further to a bigger service.

I’m all for you valuing yourself and I would never advocate low priced services over the longer term, but you’ve gotta start somewhere, even if that somewhere is small, because it will lead you to bigger things.

You have to do what you love, deliver content that you care about and be of service to the people you want to help.

© Monkey Business Images/REX You have to do what you love, deliver content that you care about and be of service to the people you want to help.

2. Focus on Inspired Action

For many of us, we’re so stuck on wanting to get in those sales and clients, that we’re constantly in push mode, meaning every action we take in our business is something that we want to see result in sales. We’re stressing and trying to force it, and forcing things to happen is almost never a good idea.

When you’re struggling to make the money you need, I know it’s easier said than done, but it’s crucial that you operate from an inspired place. Meaning, you have to do what you love, deliver content that you care about and be of service to the people you want to help. Doing that will lead to loyal followers and fans and therefore paying clients who want and need what you offer.

3. Get Scientific in Your Approach

When doctors or scientists start a new study or experiment, they don’t try once, fail, and then declare it a dead project, right?

I see so many entrepreneurs spend hours and hours putting together amazing packages or programs, try and promote it, end up with less than desirable results, and then say “it didn’t work” and feel like a failure.

Truly, there have been more failures in my business than I’d like to admit, but honestly, I’ve come to love and embrace the failures, because I learn something big every single time, and the next thing I promote goes over well because I failed previously. My successes wouldn’t have happened without learning from what didn’t work

If a product or service doesn’t sell right away, tweak, fix and adjust until you make it work. Trying once and quitting isn’t enough.

BONUS TIP: Instead of guessing if your offering is going to sell, get out there and do market research so you know that what you’re releasing is truly wanted by your ideal client.

Written by Sara Dann of The Huffington Post

(Source: The Huffington Post)

5 Things to Consider When Shopping for a Small Business Loan

Starting a small business can be a risky financial move and almost always comes with the need for funding. Sometimes the funding can come from investors, but as a business begins to grow, many small business owners turn to banks, credit unions or other lenders for a loan. When determining where to take out a small business loan, owners should consider the following factors to find the best loan to suit their needs.

1. The terms of the loan

Business loan form. Sadeugra/Getty Images

© Sadeugra/Getty Images Business loan form. Sadeugra/Getty Images

Small business owners need to understand all the terms and conditions of a loan before signing the dotted line. The small business loan sector is growing rapidly, which means there are some unsavory characters looking to make a quick buck. There are also a variety of ways a lender or creditor can offer funding. Here’s what to consider:

APR or a factoring fee: Factoring could work a few ways, but typically a lender agrees to pay the business owner a percentage of an invoice with a client. The process can be quite expensive, so calculate the cost of using factoring beforehand.

Interest: Determine how much you’ll pay over the length of the loan.

The payment structureSee if it is set payments for the duration of the term, or if there is a fee or interest hike in later months.

Origination fees and prepayment penalty fees: Check how those fees factor in to the true APR of the loan.

The bottom line: Small business owners should always take the time to do the math before agreeing to take a loan.

2. How the lender determines credit worthiness

Application for a small business loan and US dollar bills. Mangostock/Getty Images

© Mangostock/Getty Images Application for a small business loan and US dollar bills. Mangostock/Getty Images

Just like with any other form of credit or loan, not all underwriting is created equal. Small business lenders will have a multitude of requirements. Some will require that you’ve been in business for two years and generate at least six-figure income. Others may only require owners be in business for six months or offer loans based on invoices instead of revenue.

Borrowers can use these criteria to determine which small business loans they’ll be eligible for early on and avoid sending in applications that will automatically be rejected.

3. How fast you need funding

Businessman looking at clock. Moodboard/Getty Images

© Moodboard/Getty Images Businessman looking at clock. Moodboard/Getty Images

The immediate need for funding can have a huge impact on which loans a small business owner can use. Same day or next day funding is an option, but this could come with a steeper APR because the borrower has less time to shop around and compare price points.

However, there are reputable lenders providing fast financing so long as the borrower is eligible. Here’s are a few:

Swift Capital provides $5,000 to $300,000 in as quickly as an hour on a term of three to 12 months. Borrowers must have been in business at least a year and have a minimum of $5,000 in monthly revenue as well as a minimum 550 credit score. The APR starts as low as 9.99 percent with an origination fee of 2.5 percent and no prepayment penalty.

OnDeck provides $5,000 to $250,000 in next-day funding with an origination fee of 2.5 percent and an APR range of 19.99 percent to 49 percent. Business owners must have been in business at least a year, have at least $100,000 in annual revenue and have a minimum credit score of 500.

BlueVine takes a unique spin and provides next-day funding based on invoices. The lender will pay up to 85 percent of an invoice amount with a standard rate fee of 1 percent per week with a minimum of three weeks. There is no origination fee and no prepayment penalty.

Kabbage offers a line of credit for six months with a minimum amount of $2,000 and maximum of $100,000. Borrowers pay 1 percent to 12 percent APR on the first two months and 1 percent per month on the remaining four months. Funding is available within a few days.

4. How much funding you need

Hand with money. Pavel Potapov/Getty Images

© Pavel Potapov/Getty Images Hand with money. Pavel Potapov/Getty Images

Consider how much funding is needed, and don’t forget to factor in fees. Be sure the amount needed for a loan is within the maximum amount available with a lender; otherwise it isn’t worth applying in the first place.

5. Quality customer service

Customer Service representatives on the phone. Getty Images/iStockphoto

© Getty Images/iStockphoto Customer Service representatives on the phone. Getty Images/iStockphoto

Sometimes a local bank or a reputable bank may offer the best fee, but small business owners should also consider customer service reviews. Newer entrants in the small business loan space may provide more streamlined customer service as well as a quicker response time. Test the customer service before taking out the loan.

Don’t Fear Shopping Around 

It’s common for people to fear shopping around for credit because most applications result in a hard inquiry on credit reports, which will lower credit scores. Fortunately, doing all the shopping in a 30-day window typically results in the same loss of points as from one application. Credit reporting agencies understand people shop around for the best deals and won’t penalize them if it’s all done in a short time period.

Written by Erin Lowry of U.S. News & World Report

(Source: U.S. News & World Report)