Plan to earn money as early as possible

When preparing your business plan it must include sections on how you’ll earn money as early as possible

earn money earlyEarn money early by developing a means to perform more work than you can do alone. People don’t open businesses to work eighteen (18) hours a day; give up the benefits they had when working; or to earn less money than they made on a job. However, if you don’t plan on how you’ll make money, it’s easy to get stuck in a situation where you may be working alone and almost killing yourself trying to make something happen.

Even if you’re an accountant, you shouldn’t look forward to coming back to your home or office to do your own accounting, financial statement analysis, market research, and other administrative chores which must be done by all businesses. A great first step is to understand you can’t earn a lot of money on yourself. Once you understand that philosophy, you must plan on what you’re willing to do and what things make the most sense to hire a professional to do for you.

These facts must become critical parts of your business plan. Because as early as possible, ideally before you open for business, you must have an idea of what your work day will look like. Make no mistake, no matter how well you plan, you’ll run into surprises. In many cases addressing those surprises may add additional tasks to your day you hadn’t planned for. And, this might cause you have to do more work than you’d planned just to earn a living.

No matter what type of profession you choose to build a company around, it will require more than just practicing your profession to make the business work

It goes without saying, you’ll need to practice the profession around which you started your business. But in addition, all companies have administrative work that must be performed like accounting, strategy development, website maintenance, tax planning and compliance. None of these things earns you a dime, but must be done for your business to operate efficiently, or at all. And, that’s just the beginning. You must market to get new clients and You must take actions to stay in constant contact with any existing clients. None of these actions pay you anything and in situations where small amounts of money may be earned on promotions, they never pay what you could have earned on hourly fees for performing the work you established the business for.

When you open any type of service business a good way to start may be to use subcontractors

Along with all the other advice we’ve tried to offer, the use of subcontractors may be the sign you’ve been looking for. However, their use will change the ideas you may have had about doing as much as you could to try to earn your small fortune alone. It may require you spend more time selling your service and less time buried under a stack of work you’ve been able to get. If you hold professional credentials, you may have convinced yourself you don’t need help. But, without it, you create a ceiling on your earnings capacity. Many people believe they can overcome this problem by dropping huge sums into getting started. I absolutely disagree with that approach.

You should be able to start your business for a few hundred dollars or no more than a few thousand. When you work alone, you may find yourself putting money into your business just to keep it open. This is one situation where you have to put your ego to the side. Your goal must be more than just making your company self sufficient. Your goal must be to earn enough to pay yourself attractive earnings, with a strategy for increasing profits often.

Subcontracting may offer you that possibility. Few people would question the reality that getting your first clients is tough. If you’re marketing properly, you’ll find some of the business you couldn’t accept was because it was outside your area. Some work may require more manpower than you could provide alone.  In other cases you may have to turn down work simply because you simply couldn’t handle any more work alone. And, this is where subcontracting can make a difference for you.

Subcontracting will help get your business to do what you set it up for

Many business people believe the only way to grow or expand is to hire employees or open another location. Either of these options would require additional expenses. The last thing you need is to incur additional expense for a new business. Or, to dramatically increase expenses for an existing business, especially if it means having to pay yourself less. An even worse option would be to attempt to engage in either of these options before your company becomes profitable. In situations where you’re working alone, the business model requires the business owner do everything. Since you can’t be in two places simultaneously, either your administration, or your work that generates fees must suffer. This can lead to working long hours to get everything done. Or, the creation of an earnings ceiling, or even worse borrowing to get your business started and keep it moving.

Subcontracting will help get your business to do what you set it up for. To produce substantial earnings and to give you more free time than you’d have on a 40 hour a week job. And remember, if you’re working in the professions, you’ll seldom work just 40 hours.  And if you’re working as a wage earner you likely have to work a part time job to make ends meet. So you never have much free time. To make the best use of subcontracting you must determine what strength you have that would make your business a success. Your strength could be the ability to focus on outstanding task, ensuring they get done. Some people are great at reviewing work and defining ways to make it better. Others may be able to sell successfully. Any of these skills and more can make you a great candidate to use subcontracting.

What your business plan must include to prepare for subcontracting

Having decided your strength(s), you must determine how you’ll use them. First you have to design or have designed subcontracting agreements. Many such agreements may be found online free or for very low cost. If you have a lot of money to work with, it is sometimes best to use an attorney to design your agreements. Accomplishing these tasks must be reduced to writing in your business plan. Next, you must identify several potential subcontractors you’d like to approach. No matter what your field, you’ll find most people just want to do the work. Marketing for most of them is a necessary and expensive evil. Thus, should you approach them with the possibility of bringing in additional work, most will be receptive.

Your agreements and the results of meetings with them should clearly indicate you plan to white paper their services. Meaning you’ll be representing this is the work of your company. Since they’ll receive business in excess of what they had to market for, and would not have to package the end product, they should be willing to offer you a discount on the work. This discount is what you’d earn on any work performed for you by subcontractors. You would now be getting paid just to bring in new work to them.

At the same time, you would pick out some of the higher paying work you generated and keep it for yourself. This would keep you in the loop if you plan to review the work of your subcontractors. If your strength is focusing on your outstanding tasks, you shouldn’t mind packaging your subcontractors work, in your packaging, and being able to discuss it with clients who believe this work was done by your company. If your strength is sales, I don’t think I need to tell you how well you could do. The use of subcontractors gives your company a look of depth. Though you may be initially working on your kitchen table, this can put you on a faster track to working on the board table of your successful company.








Why it’s important to start your business with the right foundation

Why the right foundation can increase the probability of your survival.

foundationIf you’ve decided you want to start a business, it’s critical you understand the statistics on new business survival. Understanding only 5% of businesses started just three (3) years earlier, will have closed, should not stop you. Understanding the survival rate for Internet businesses may even be worse, should only lead to investing as much research as is necessary to increase your chances of survival and profitability.  

Most businesses fail because the business owner failed to invest the time necessary to ensure he had the right product to sell, had chosen a market hungry buy it, and a had developed a means to communicate effectively with them.

These issues must be addressed by anyone looking to succeed in business. They’re critical parts of developing a foundation for your business, giving it a chance of beating the odds. Starting a business now is easier than it has ever been if you have the right strategy. Looking to get rich quick, should not be a part of your strategy. If you don’t plan to offer your customers value, maybe going into business isn’t for you. A good rule of thumb would be to use the 1/3/5 rule when planning to start a business. It typically takes one (1) year for customers to even know you exist. It typically takes three (3) years to earn more than you could make working a job. And it usually takes five years to have the confidence to consider expansion, or the possibility of earning big money. If you aren’t prepared to deal with those realities it may be best if you look for ways to advance in your career.

Develop a realistic plan before investing money or time

 A first and critical element of starting any business is to have a plan. You must plan how you’ll make money. A material part of that is determining who your potential customers will be, and how your offering will address a need they have. You have to determine if you’ll have enough money in reserve to execute the plan you develop. We all have dreams, but starting a business without a plan, can become a nightmare. Then you must have a plan to communicate with your target market. It doesn’t matter what you’re selling if no one knows you have it. A terrible philosophy many failed business owners have undertaken is to write a one or two page business plan then spending the time you would have spent writing a comprehensive plan to learn as you go. It may have worked in some obscure situations, but I have never heard of it working at all.

Developing a detailed business plan requires you research the market you plan to serve. It helps you develop possible contingencies you may have to employ when a section of your plan isn’t functioning as you’d hoped. In many ways it’s like the paper trading investors do before trying it with their money. Properly prepared, business plans help you determine if you’ve met benchmarks you set for your excursion into the jungle called owning a business. Business plans alone can increase the probability of your survival by four (4) to five (5) times.

Not until you’ve invested the time and research into developing a personalized business plan should you consider spending money to develop a foundation for your planned company

Even with a business plan, some business owners make a mistake of investing all their available resources in buying inventory for resale or buying the literature, Internet access and other tools necessary to sell services to customers or clients. Using that approach may not prepare you to even cover your costs. Only a few people will know you exist and you may spend years trying to brand your company and get it known.

Many people think a material part of that implementation should be a website. Unfortunately they’re only half right. It goes without saying a sticky website that keeps visitors engaged in the technological world we live in is a must. But, you must have a means of getting visitors to your website to realize the value it can provide. Most developers charge hundreds if not thousands for a website, which does little by itself. You need a domain, and hosting, e-mail marketing, a presence on social networks, a means to analyze visitor behavior at your website and to analyze website health. you can get those things from Saafenet for a few hundred dollars and the resultant increase in sales can make it seem like it was free.

Professional help is another cost few new business people factor into their calculation of cost to open a business. Even with days or weeks of rigorous research, some important steps may be overlooked. Plans on dealing with an unexpected contingency may not have been made. Or, conclusions developed may have been insufficient to deal with it. Due to some commonalities in all businesses, advice may be sought from the volunteers of Score.  However these executives typically were employed by large companies. They may never had to deal with issues as simple as how to get their first clients. Small business expertise is what’s needed. The advice available through Saafenet is more targeted to small business. And, may address issues an executive from a huge corporation may never have had to address. He may offer theory, but you need the advice of someone with actual experience. The customer service engineers at Saafenet have that kind of exposure and can keep you from making mistakes that destroy small businesses every day. Their advice could easily make the difference between success and failure for a small business.

Having hopefully reinforced the need for planning read the next post to see the minimum paperwork necessary before you can even apply to have your business licensed.


Understand the rules of government contracting before you invest time and money into trying it

government contractorThe first step toward becoming a government contractor is to be certain you sell something the government buys. And, whatever you’re selling needs to be sold at competitive or market prices. Forget any stories you’ve heard about the government buying $900 hammers and paying outrageous prices for goods and services. It has happened, but safeguards are now in place to prevent it. Getting caught even once trying to do that can eliminate the possibility of you ever getting government contracts.

A good second step would be to have an existing business with a track record of delivering goods or services on time.   The procurement process for getting government contracts is extremely long as compared to private industry. And, it’s a good idea to be able to pay your mortgage or rent, eat, buy an occasional outfit, and see a little entertainment sometimes. Before beginning your quest to add government contracting to your revenue streams. Because, getting your first government contract can easily take two years.


Take a serious look at your company or the one you plan to open. Unfortunately, the award of government contracts is not made because someone feels sorry for you or they want to help you get your business going. They’re made to companies known to deliver on their promisses. And, the only way to prove you’ll deliver is to build a track record of having done so. Depending on your offering, you must attempt to build a business without the government. Unless you have an offering that’s used exclusively by the government. If your offer sells well to the general public, identify a niche within that group and try to sell to that niche first. If you have a specialty offering, identify who would most benefit with it’s use, and try to sell to them. No company can be built by trying to sell to everyone. And, the government is not designed to help you start a company.

The award of government contracts in set aside programs is designed to be a helping hand not a hand out, to existing businesses. Should you choose to become a government contractor, it must be viewed as something you are aiming to become in the  future. YouR primary objective must be to build a company the government is willing to make purchases from. Too often, people are disappointed to find, that business cannot be developed through sales to the government. Regulations dealing with government contracting programs for small businesses are outlined in the Code of Federal Regulations. The government’s purchasing process is governed by the Federal Acquisition Regulations. These regulations stipulate that contracts cannot be awarded to individuals or companies that aren’t in compliance with their requirements.

If government contracting is in your future, it’s a good idea to become familiar with the major points of these regulations. Then, with your existing company to ensure you’re prepared to comply with government labor standards statutes. This process could take some time when you’re starting a business alone or with a small group. But, it’s best, if you plan to become a government contractor, to aim to reach that goal as a material part of your business strategy. For more information on determining if you qualify to be a government contractor and helpful hints on getting contracts once you become a part of one of their set aside programs, view our section on Government Contracting Advice.


The largest government-wide contracts are procured through the General Services Administration (GSA). GSA Schedules are extremely helpful when a business has their goods and services placed on the GSA list of approved vendors. In fact, 10% of all federal procurement in the United States is done through GSA Schedules. The GSA has produced over 19,000 Multiple Award Schedules (MAS) Each year the federal government spends $30 to $40 billion on GSA Schedules, which is roughly 9% of the total spent on government contracts. Procurement Officers enjoy using GSA Schedules to award contracts because it is convenient for them to purchase your goods or services. The process works as an online shopping directory where procurement officers can simply order and purchase. The award of GSA schedules may be made to small companies but you will competing with large companies known to deliver what they promise. If you have decided to apply for inclusion on the list of approved vendors be certain you’re prepared to make on time deliveries of products or services requested by government procurement officers. Being listed in one of the schedules may help you get the large awards that have the capacity to grow your company rapidly.

Tax Planning for Small Business

Plan for the Future or Become a Victim of it

Tax planning is the analysis of a financial situation or plan from a tax perspective. The purpose of tax planning is to ensure tax strategy, works with the elements of the overall financial plan for your company. Without it, you may find you financial plans can’t be executed as you’d expected. And, reasonable  execution of your financial plan working hand in hand with your tax plan is crucial for your success.

Tax planning can make a material difference in the amount your company will be liable for because the execution of your major financial transactions will have been examined based on the effect of selecting options that consider the effect taxes can have. Financial planning may not consider those effects.