My August Business Social at Substance

August 28, 2009. I hosted a Women, Wine & unWind event at Substance; a fashion boutique owned and operated by local entrepreneur, Christina Getachew. These intimate gatherings that I plan to continue this year are meant to support local entrepreneurs and foster relationships between startups, emerging and established business owners.

(Me, laughing & talking. Notice the brick exposure to this beautiful loft-style boutique)



(Christina Getachew, owner of Substance--talking to two local entrepreneurs)

(My client as she talks about her beauty school startup)

Substance is a boutique for the "Fashion conscious people." They specialize in organic clothing and individualized designing. To learn more, click here to visit their website. They are also at the franchising stage so if you or someone you know might be interested in buying a franchise, please leave a comment here or on their website.

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What Do You See? Tunnel Vision for your Business

In five to ten years, where do you see yourself? Your business? What sounds like a simple question is often complex. It's complex because sometimes you lose this vision you have for your company if your business model is not built around it.

As I help people plan for business, I continue to see this trend. The key thing to ask yourself as you build your business momentum is: How can you be true to you? How do you build a model that represents your vision?

If you started your company to be "a luxurious line of bath products" for example, does your packaging reflect that? What about your service; would you be able to sound courteous and professional on the phone as a concierge would or do your customers feel as if they're making a drive-thru order?

Start thinking about what you want your business to look like, how you want it to be seen. Michael Gerber in his book, E-Myth Revisited states that "what's important is how the business looks, how it acts, how it does what it is intended to do." Your challenge will be to get your business to do what you envisioned it to do. Don't misunderstand me, the client may change, some of your methods will change, but the real reason your business exists won't--that is unless you didn't have a vision to begin with.

When I first started my business even before employees or office space, I always referred to it as a company or agency. I've always known in the back of my mind that I'm building the prototype for what a breathing company would look like.

My vision when starting Isaac Business Services, has always been to have a platform that creates a level playing field for anyone starting a business to be presented with the same opportunities--whether heavily funded or not, whether past entrepreneurs or not, whether they had twenty years of experience or five. I've always envisioned Isaac Business Services as a one-stop-shop company for anyone starting a business or developing a model for a startup business. And it has slowly evolved into that.

Donald Trump in his book, Think Big and Kick Ass in Business tells you to "dress the part and act the part. Do not cause any doubt in anyone's mind that you don't know your stuff." He explains how when we first started, everyone assumed that the Trump Organization had employees when in fact it was just him working out of a studio apartment.

So when you think about your business, what do you see? And are you going in the right direction toward this vision?


About the Author: Cheryl Isaac is the writer of this blog and a Startup Business Planner & Owner of Isaac Business Services, The Business Start-up Company.

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What you may not know about your Bank

Do you really know your bank? There are a lot of opportunities for entrepreneurs that banks offer in various packages. Unfortunately, there is a lack of education for the business owners sometimes. This is partly our fault as entrepreneurs-- we become too busy to pay attention. And it is partly our bankers' faults--they become too busy to educate.

So being someone who can relate ( ex-banker and entrepreneur), I thought to share some things with you regarding banks:

Equipment Leasing

I bet most of you didn't realize that your bank offers leasing opportunities for business owners. Well they do. You can get what some banks refer to as "Business QuickLease" for equipment like: medical equipment, office equipment, computers and more...

What I find interesting about the equipment leasing is that most times you can bundle different equipment types under one agreement. They also provide 100% financing-meaning you don't have to pay a deposit. Most will give you a couple months of deferred payments and will allow you flexible lease end options--meaning you can then return the property, upgrade or purchase at the end.

Most banks partner with other companies to offer this service so call your banker and inquire about their process.

Small Business Administration Loans

SBA loans is the new "hot topic" amongst entrepreneurs looking for funding. Most people hear that the SBA guarantees a certain portion of loans; so they think it's an easy ride to get one. Myth. There is a stringent process that you must go through. This is partly because your bankers have to go through a process too. After all, banks are highly regulated entities.

Here's how it works:

• First of all, keep in mind that you will need to give something in order to get something. In other words, you have to pay a deposit to get a SBA loan. Most banks ask for between 10%-20% downpayment. So if you were seeking a $100,000 loan, you will have to secure it by having $10,000-$20,000 in an account at the time of closing. Since the SBA now guarantees 90% of loans, you may see some banks only requiring 10% downpayment.
• You will need a business plan complete with projections. So for the people who think that these 5 page business plans or sample business plans from the Internet will work, think again. Bankers are detailed and so are their underwriters. They will pick apart your business plan and know a fake one when they see it. Beware.
• Three years is the magical number. Create projections for three years and you should be okay (some banks only require two). I haven't seen a banker who does not ask for balance sheets and profit & loss statements; so you may need three years projections for those. It will also be good to add cash flow statements and a break-even analysis. You will also need three years of tax statements: could be personal mixed with business statements (some bankers may ask for two years)
• Personal financial statement. Most bankers will ask for this; this shows your net worth, your debt, assets, etc. You can view a free one from the SBA's website here.
• Monthly projections. Most bankers are picky. Once you have your three-year projections, you may also need to break them down monthly for the first year. It makes it easier to read and it gives a more realistic view of your business' income and expenses.
• Credit score. The big one. I'll make this pretty simple: if your credit score is beneath 650, you probably won't be able to get a loan. My advice would be to start working on the above items listed, build your credit and then try.

Merchant Services

If you have a retail store or a company that takes in-person payments, your bank offers services that would allow your customers to pay you with a credit card. And if you have customers that want to pay you with a check, there are credit card machines that allow you to instantly withdraw the funds from their account with a simple swipe of the check. This way, you save yourself the headache of dealing with "non-sufficient funds" checks. Check with your banker to get more details.

Retail Entrepreneurs, avoid long lines at the bank:

Banks offer several opportunities to do this: 1) Check deposit: some banks now offer Remote Deposit Services for their business owners. So you can deposit a check to your account right from your desk. 2) There are also "drop box" options for business owners. For instance, I had a client who owned a restaurant. Since he had busy days, he would utilize the drop box system by placing his money from the cash register into the drop box bag, locking it with his special key given to him by his bank, and handing it over to his manager to drop off at the bank after-hours. The manager would then drop the bag into a secure bank safe on the outside of the bank. Once the bank teller received the bag, she would open with her special key.

Again, contact your banker to learn about these options that make your life easier.

Protection from bounced checks or "returned" vendor payments

If you are a business that works on receivables, this may be a topic for you. No one wants to envision a business owner with bounced checks, but it happens. And it happens to the best of us because of simple miseducation.

Let's say you pay a merchant and their credit card processor takes your payment from your account twice. Now if it was a $5000 payment, did you really have $10,000 in your checking account to spare this mistake? Probably not. What if your payment to a merchant is automatically taken out of your account but your receivables from your major client is a week overdue? Guess what? Your account just got "overdrawn."

Your business overdraft protection will protect you from this mishap. Most banks offer it in the form of a credit card or line of credit that is attached to your account. So for instance, if your overdraft protection is $500.00, and you have $100.00 in your account but someone tried to process a $125.00 transaction from your account, well--your overdraft protection will pay for the transaction by transferring the extra $25.00. Makes sense? Contact your banker because you will need to apply for this protection.

Although banks are struggling through these times as are we, some bankers still try to encourage business owners and are still interested in making life easier for you. So I encourage you to learn more about your bank because there is a lot that you don't know.

Did I miss anything? Let me know...post a comment here.

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Do you Really Want my Business?

How do you sell? The biggest problem that entrepreneurs face is getting people to "bulge." So how do you do it? Or have you even figured it out?

And if you have already figured out your process, do you make your customer feel as if you really want their business? Without being a sales stalker, do they feel as if they matter?

I attended a National Association of Women Business Owners (NAWBO) meeting last week where Lance Tyson from Columbus Dale Carnegie Institute was the speaker. During that meeting, he reiterated the five-step sales process:

1. Qualify your prospect
2. Evaluate
3. Diagnose
4. Prescribe
5. Wait for the commitment

This hit home for me because during the last couple of months, I've restructured my business and changed my sales process. I was glad to learn that I was headed in the right direction--my process incorporates all five steps of the sales process. Now every customer I work with, has the same interaction every time.

Lance Tyson also stressed rapport; which I think is a big part of the process. I like to say that it is the number of times you "touch" your client or potential client. Do they know that you care about them or do they feel like they're only a part of your bottom line?

It has been said that in order for people to buy, they must know you, like you, trust you. Most times that is done through numerous interactions with them during the sales process. Startup businesses usually skip this process--we become so eager to make a sale, we rush the process. When I first started, I would quote people prices the first time we met. Big mistake!

While we are a society of "right now!" and while instant gratification works most times on the internet, the in-person relationships always require more. Depending on your industry and type of business, you may have a three to seven step process to win over a customer.

And if your business is anything like mine, you must also build upon that relationship even after you've won over the client. Your client should be treated as the diamonds they are; not as another means to help you pay your bills.

Let them know that you really want their business!

In the past two months, I've tried to get service from business people and have been "smacked in the face" with: unreturned phone calls, or phone calls scheduled and appointments not kept, no contracts and people simply telling me to "just pay" them, signing contracts and having business people not adhere to the contracts or simply "throwing me to the side" as if my business does not matter, business people not taking the time to ask the right questions and just throwing out products at me, etc. I can go on and on with this list...

These are all entrepreneurs doing this and it makes you want to scream, "People, wake up!! We are in a recession and every business counts!"

However, that's not the problem. The problem is that most business owners do not "qualify" their prospects. They skip the sales process.

Lance Tyson compared the sales process to the doctor's office procedure: you walk in to your doctor's they give you a form to fill out, you then see a nurse who evaluates you, then the doctor again evaluates you, based on those two evaluations he diagnoses you, then he prescribes a solution, and wait for your commitment.

So when you skip this process, you're telling the client that only money matters. That you just need to sign one more person to help your bottom line. What ends up happening then is that client ends up feeling "slighted" because perhaps, your company was not the best match for them.

So if you really want your customer's business, construct your sales process now. It works. And when it doesn't, you know that the prospect was not a good fit for your services and you save both your time and that of your potential client.

About the Author: Cheryl Isaac is the writer of this blog and a Startup Business Consultant & Owner of Isaac Business Services, the business startup company

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Purple Cow by Seth Godin

Starting or just started a business? Seth Godin advises you to do two things "after you create something remarkable:"

1. Milk the cow for everything it's worth. Figure out how to extend it and profit from it for as long as possible.
   
2. Create an environment where you are likely to invent a new Purple Cow in time to replace the first one when its benefits inevitably trail off. (excerpts from Purple Cow; Kindle version, 951-58)

Seth Godin's "Purple Cow" name stems from the notion that no one pays attention to a cow because we know what to expect from them: they stand around, eat, and their colors are black and white. However, what would you do if you saw a purple cow? Pay attention right?
The book aims to turn business owners into Purple Cows. Or at least to get them thinking that way. A quote from the author summarizes it:

"So it seems that we face two choices: to be invisible, anonymous, uncriticized, and safe, or to take a chance at greatness, uniqueness, and the Cow"

I read this book while on vacation and couldn't stop reading until I finished it for two obvious reasons:

1. The book applauds innovation and celebrates startups. There are startup stories and examples from companies that we know and patronize; examples that enhance the writer's arguments.
   
2. The book is definitely not for the "weak at heart." It is motivational yet candid. The message is simple: your way of thinking is what determines whether your startup becomes a "purple cow."

Any business owner should read this book; I particularly think that startups or existing businesses seeking innovative restructuring, will benefit greatly. Find Purple Cow and read it. I can guarantee you will like it.
If you've read the book, I would also like to hear your thoughts. Leave a comment about the book or your "purple cow" story.

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It's Not About the Business Plan; It's About the Business Planning Process

Before you make the crazy attempt to start a business or change your current business model without a business plan, stop and think about it for a minute. Do you do anything in your life without a plan? If you do, you're probably a spur-of-the-moment-do-what-you-feel-when-you-feel-like-it-fly-by-the-seat-of-your-pants-eccentric-yet-carefree-soul-and-slightly-lucky-person and you can stop reading this right now and live life the way it works best for you.

However if you are like me and most others, you plan your family vacations in advance; before you make the leap, you've come up with an estimated budget, picked your outings, where you will stay, how long you will stay, who will house sit the dog and mow the lawn while you're away, etc. If you are like most people, you planned your wedding, your kids' birthdays, your family reunion, etc.

So at the risk of sounding cliche, tell me, why would you even attempt to start a business without a plan? If you have done this or are thinking about doing it, Stop, take a deep breath and answer me this: "What is wrong with you??!!" Do you not care about your legacy, your economic independence, the future for your family, your freedom to achieve your purpose in life? Do you not care about your business?

The format for a business plan may change. The method for producing one may change. The fact that you need to plan for business will never change as long as entrepreneurship exists. And the actual business plan is just the product of your brainstorming.

So although some people may use business plans simply to get some funding or to say they have a plan, here's why I've been able to operate a business that survives on producing business plans: I believe in the process itself.

It is annoying to see how most people skip the process and concentrate on only the end product. The business plan is then seen as a product and the planning process (the service itself) is ignored. Well, my company operates on the belief that the business planning process is key. Of course, when we produce a great business plan end product, our process becomes solidified.

A good business plan and process will reveal seven truths:

1. It will put your business idea to the test. If you think you have thought things through without going through a planning process, you're in for a rude awakening. A business plan forces you to think about things you've never considered. I call it the "mean aunt." You know that mean aunt in your family who always said what everyone else was thinking but was afraid to say? That aunt becomes your business plan.
2. It will morph a good idea into a "SWEET" business structure. Ever wonder why so many people have businesses that still look like hobbies after 5 or 10 years? That's because they lack a structure. A business plan helps you build a model that works and it gives your business a steady foundation.
3. It will "Show you the Money." How much do you really need? Where will you get it from? If you can't raise the money you need, what can you cut back to survive or can you even start without your needed funding? What will you need in order to open your doors to the public? It gets so annoying when people throw out these thoughtless figures, like...fifty thousand!....why do you need fifty thousand?...well...twenty to cover this...ten to cover that...Blah Blah. After you've seen so many plans, you can tell when someone's pulling your leg. And people wonder why their banker or investor won't give them money. The process, not the plan! Anyone can get a plan from the internet. Go through the process!
4. It will "Keep it real" with you. Like I always tell my client, "the numbers just don't lie." What are you really going against here? Your planning process will help you uncover the naked truth. Scope out the competition, analyze your market, know what you are getting into before you take the leap. And the great part is that if the truth is too much to handle, you can clothe your truth by customizing the process to fit your scope, your reality. Example? A client once worked with me to start three locations in three different states. After going through the process, his budget and obligations revealed his "truth:" to start with one location in his locale.
5. It will help you find money. I know, this point is overrated but true. No banker wants to hear you talk without seeing some proof of your hard work and great idea. No investor will take you seriously if you don't look serious on paper. You have to be able to convey your thoughts and this means you need a well-thought-out plan. Period.
6. It will help you measure progress. Did you achieve a goal? If not, why? Were your costs too high? Prices too low? Sales quantity not up to par? Great revenues but still no profits? Did you try so hard and still can't seem to breakeven? Your planning process will prompt you to go back to the drawing board and measure your success.
7. It will help you to brace yourself for the unexpected. You know that annoying noise your GPS makes when you somehow manage to go off route? It keeps saying, "reroute...reroute..." over and over? Well... your business plan is your business GPS in this case. Paying attention to it will help you find a new route when things are not working. Wondering if you will run out of money? Pay attention to your plan, it will tell you. Don't be discouraged though, because that same plan can help you figure out what it will take to avoid that.

I'm not saying that planning is perfect and will get you out of every hole. However, we all know that having A plan is better than No plan at all.

Stay tuned for our new business plan website that focuses on the planning process and business structuring methods. I'll be posting details soon...

About the Author: Cheryl Isaac is the writer of this blog and a Startup Business Consultant & Owner of Isaac Business Services, an agency that offers startup concierge & business planning services for small businesses

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Tips for Starting a Home-Baked Goods Business

Since I help people plan businesses on a weekly basis, from time to time I may impart some business tips for my readers. See how much I love you guys?

If you're starting a business that involves some baking, here are some tips you may find handy:

Start with a product that is not easily "boot-legged". You may think this is common sense but someone once came to see me about starting a company baking brownies. When I asked whether the idea came from a special family recipe or a special batch that everyone craved, they informed me that the brownies would be "regular" brownies that are made from store bought brownie mixes. Be certain that your friends, family, neighbors, co-workers, church family, school family, etc, all come to the consensus that your home baked goods taste good. Better yet, they should tell you that they've never tasted a brownie that good.
Stick to what you do best. Like any other business, you want to start with some knowledge of what you have to do. Do not attempt to start a business by baking brownies, cookies, cake, cupcakes, healthy pies, etc. Find one or two products that you excel at baking and stick with them to start. Don't worry, as you go along, your customers will then tell you what they would like to see you add to your list. By then, you will have figured out whether a product addition is feasible.
Learn how to calculate your cost of goods sold. A lot of people cringe at this process but it's not as difficult as it sounds. You first want to figure out the cost of baking one item or unit. For you, it may make sense to calculate this using a baking sheet as a unit. So the question becomes, what do you spend on baking mix materials in order to produce a cookie sheet of delicious cookies? This process is important because it helps you set your price high enough to cover your cost of goods sold and labor.
Buy smart. Find a warehouse, grocery store club or some similar store that sells all the items that you would need. Bulk pricing is cheaper and convenient because you don't have to shop around.
Create "fabulous packaging". A lot of small businesses tend to miss this step. This is an important step to ignore. Don't forget, first impression counts. Look around you: ever wonder why assorted chocolates are so pricey when they sometimes taste worse than cheaper chocolates. Their packaging for Valentines and holidays entice consumers. Tie a bow around your packaging. Design your packaging like you would decorate your house at Christmas. Pay special attention to detail because your customers will too. While you want them to talk about your baked goods and the taste, don't forget they also want to be proud to have your product delivered to a friend.
Free tasting equals free referrals and testimonials. Give free samples in order to attract new customers. Quit being stingy. Too many small business owners refuse to take this very crucial step. One way to make someone try your product is to give it to them. Learn from companies that came before you. Take Mrs. Fields Cookies, Inc. for example. Mrs. Fields opened her first store in 1977. On her first day, she hadn't sold any cookies. So she took a tray of cookies and walked around the shopping mall handing them to customers for free. Within an hour, customers were at her store placing orders.
Become the tele-mailing king or queen. Whether you sell cookies, cake or bread, try to establish some form of a mail order. Although customers may not purchase your items every month, they may become repeat customers if you make it easy for them to do so. Give them a way to get a fresh batch of bread automatically sent to them every other month. Or perhaps a tin of cookies sent on birthdays or Valentine's day. And what about family-size dessert for the yearly Christmas dinner? In order to accomplish this, you would have to keep a great customer database, call your customers once in a while, have frequent mailings, and take initiative.

Do you have any additions to this list that you think should be included? Or do you own a home-baked goods business and would like to list something that has worked for you? I would love to hear from you. Please leave a comment on this post.

Cheryl Isaac is a business start-up strategist to service businesses going online. She contributes to Forbes here and blogs about Making Business Personal here.  

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