What Should I Expect to Spend my First Year in Business?

I am constantly asked the question, "What should I expect to spend the first year in business?".

The following is a compilation of normal expenses when starting your own home based small business. The figures are based off of businesses such as pet sitting and house cleaning which has relatively small start up costs since office space and retail products are not required.

1. Write a business plan: Free template at SCORE: http://www.score.org/business_toolbox.html : a business plan will be a very important tool to ensure you know what to expect and stay on track.
2. Obtain a Free Business Checking Account: Most banks will offer free accounts. Be sure you are aware of how many withdraws and deposits you are allowed when comparing banks.
3. County/City Zoning for home offices – Varies (if needed): Most states will not require this since they are home based, but it is a good idea to double check to be sure.
4. Business License (if required) – Starting at $100/yr depending on state: Some businesses do not require a license, others do. Go to http://www.business.gov/register/licenses-and-permits/ and enter your city or state to see if you need a license.
5. State Fictitious Name (if applicable) - $50 (depends on state): If you do not need a license, you will need to register your business with the state.
6. General Liability Insurance – Starting at $200/yr : Pet sitting GL policies are around $200 and cleaning will be around $500. These policies will vary depending on the amount of coverage you choose to have.
7. Dishonesty Bond - Starting at $125/year : Bonding is optional, but is a good idea if you have employees to protect your business assets.
8. Basic office supplies - $200 : This covers paper, ink, business forms, business cards, pens and other incidentals.
9. Computer and Printer - $1000 : You don't need anything fancy and should be able to find something relatively cheap on Ebay. Dells go for a great price and have all you need.
10. Business Phone (cell) - Starting at $480/year
11. Advertising - can be up to $1000 depending on how heavy you want to advertise
12. Association Fees (optional) - $500 : There are many assocations you can join, one being the Chamber of Commerce or the Better Business Bureau. I would recommend starting with the Chamber as that will give you the most bang for your buck and offers advertising. Start with one or two a year and add on as your business grows.
13. Uniform - $50 : You can get a couple of polo shirts or t-shirts with your business logo on them for a more professional look.
14. Car (gas and service) - $2200 (weekly fill ups)
15. Business Logo – Starting at $50 depending on level of difficulty: 
16. Domain Name and Web Hosting – Starting at $7.95/yr for .com and .net. Go to Go Daddy.
17. Website Creation – We can design a professional website for you for $300.  
18. Attorney costs – Starting at $400.00 (Pre Paid Legal)
19. Accountant Fees– Starting at $250/year or you can do it yourself for $50.

Total: Around $7200/year. Keep in mind, you don’t have to do all of these options or spend as much as is listed. You can keep it within your set budget and add more each year as you get more business and decide it is time to grow even more. It is recommended you focus your money on advertising.
For more information specific to your industry, go to www.businessformsstore.com and scroll down to find your business. The website offers specific FAQ's to help you step by step start your own business. When you are ready to move past the research phase and actually start up your business, go to www.businessformsstore.com and order your professional business forms.

How to really win friends and influence people

Note: This entry is cross-posted from my other blog, Canadian Entrepreneur.

What do you think when you see the words? “Please help us serve you better.”

You figure they're asking for something that will mainly help them and not you, right?

That's what I thought today when I got an e-mail from Ottawa sales coach Colleen Francis with that cheesy headline. I only read it because I decided not to do whatever it was they wanted me to do.

To my surprise, though, Colleen’s business manager, Casey, had written a very friendly letter explaining how they were upgrading their database. “We currently have 3 databases (UGH!) and we are streamlining them into 1,” wrote Casey. “In order to help us ensure you continue to receive the sales information you want, we would love you to update your profile.”

By using real language (“love”) and a little humour, and by giving us some insight into the human side of their database search, they got me onside.

But then they added the flourish. "Now, you are probably wondering "What's in it for me?" - right? Well - I will tell you. When you update your information I will personally send you a CD! A $79US value for simply filling in 10 little fields.”

You could choose a CD on coommunicating through "gatekeepers" and email, or another on “Turning No into Yes.”

"Once you have completed the form please reply to me with your choice of CD and I will pop it in the mail,” writes Casey. “We do hope you will help us with our spring cleaning.”

Congrats to Casey and Colleen for demonstrating how to turn No into Yes - using positive, informal language and appropriate incentives to motivate and engage people. Which could be why their company is called Engage Selling Solutions.

How could you use these techniques in your next communication with busy business owners?

Canadian Bacon

I’ve been phoned recently by two banks that want to lend my business money.

Never mind that my business assets consist of two computers, a printer, one-eighth of a car and 12 shelves of books.

TD Canada Trust pre-approved me for a $15,000 loan at 1 percentage point below prime. Of course, it set some harsh conditions. Neither my business’s assets nor its annual revenue may exceed $500,000. (If they do, though, I’m pre-approved for a loan at 1.99% above prime.)

About six weeks after I received the direct-mail piece, which was cleverly designed to look like a personalized cheque, they called me. The telemarketer was very effective. She sounded concerned and genuinely puzzled that I might not take advantage of this cheap money, and asked if there was anything else she could do to help me.

She actually made me feel guilty for not borrowing their money. I was very impressed.

Not so impressive was the guy from Wells Fargo who called the other day to give me a credit line (I think it was for $40,000). The rate: prime plus 1%. I told him I didn't need that much money, and that a competitor in the marketplace is offering me funds at prime minus 1.

No problem, said my mechanical friend. If I didn’t want to open the account today, he said, I could access the offer later on the Wells Fargo website. He then proceeded to spell out a long URL, and then some other long access number, both of which I politely pretended to write down.

A couple of lessons from these interactions:

* Listening is so important. I felt the TD marketer listened to me. She responded creatively and genuinely. Mr. Robot from Wells Fargo had a job to do and did it, whether I wanted him to or not.

* Reputation is key. I know Wells Fargo has been active in the Canadian market for 10 years, but I don't think it has ever been part of the market. I don't see ads from them, I don't know if they have any physical Canadian presence, I don't see their name sponsoring business events. (The pony-express logo on their “Canadian” website certainly doesn't seem to fit the Canadian character. And why no maple leaf on the stagecoach?)

TD we all know. Whether we patronize them or not, we know them as a civil, reasonably positive force in the community. Who would you rather deal with?

* Mixed media work. TD’s letter alone was shrugworthy, but adding the phone followup makes for a very compelling sales pitch.

Occasional “one-off” offers may meet short-term objectives, but thoughtful, integrated campaigns will always bting home the bacon.

They care about their people!

I had an interesting conversation today with a retired Canadian entrepreneur. They never really retire, you know.

I’ve met this man several times, but not in the year since he left the company he founded. Last month that firm announced a major strategic change, so I called him up to see what he thought about it. He outlined the business case for what they're planning to do, although with little enthusiasm, so I guess he’s onside but not ecstatic about it.

But here’s what he was passionate about.

He complained that he’d heard the news from a friend who used to work for the company. Then he heard about it from a stockbroker. He’s the former CEO, and still a major shareholder, and he obviously feels the company has an obligation to inform them about these things. You can take the entrepreneur of the company, but it sure is hard to get the company out of the entrepreneur.

Here’s the other thing he got hot about. This change will affect a lot of longtime employees. He expressed more regret over what might happen to them than he did about the change to the business as a whole. “It’s a different company now,” he said, but it was clear that he hoped the company would treat the affected employees well.

He also noted hopefully that with the general skills shortage around the country, some employees might be better off, and actually get better jobs.

Clearly, he still retains that entrepreneurial ego, even in retirement, But I was impressed by his concern for his former employees. They’re still his people, and he still cares.

Bottom line: If you’re marketing to business owners, remember their commitment to their teams. If you can make things better for their people, entrepreneurs may just listen to you a little more closely.

Make it Clear

Marketing Profs, a US site offering marketing advice, takes on the small business market today with a short piece offering three ways to get your message across to business owners. “Get to the point,” they say.

“The vast majority of small business people will respond with interest if you clearly outline what you can do for them.”

* Simplify your pitch. Small business owners don’t want to see your binder filled with charts and graphs. They care about ROI. Demonstrate how your services will pay for themselves.

* Let others pat you on the back. Testimonials from current and former clients provide credibility. They should highlight solutions implemented or problems resolved.

* Put on a good face. If you're selling marketing services, wow prospects with the quality of your Web site and collateral. If you look good, they know you’ll make them look good.

The unnamed profs believe small business owners to be tight with a cheque – a point we have made made here ourselves. To sell them your service, they say, you have to prove its value.

The Quarter of the Canadian Entrepreneur

Kudos to Roynat, which this year launched a bold initiative called "The Year of the Canadian Entrepreneur." As I understand it, their intent was to build a coalition of marketers interested in reaching small and medium-sized business, and together create events and content that would celebrate Canadian entrepreneurship and help inform and strengthen individual entrepreneurs.

Sadly, Corporate Canada never signed on. Rogers Wireless became a partner, and at least one other organization I know was looking to get in on it. But Roynat had ambitious plans - a monthly mini-magazine called "Essential Guide" in Canadian Business and PROFIT, and a full weekly "Entrepreneur" section in the National Post - and they required deep, deep pockets.

This month, Roynat threw in the towel, and who can blame them?

Congratulations to Roynat (and Rogers) for their vision and market leadership. And to all those organizations that make lots of money off Canadian entrepeneurs and declined to support this worthwhile initiative, may you reap what you sow.

To sell to small businesses, you have to create value for them. Roynat gets that. The rest of the market? Not so much.

Grand & Toy Gets Ambitious

I love office-supply stores, but I have always had a love-hate relationship with Grand & Toy.

As a kid I remember wandering into their store at Yonge and Eglinton in Toronto and wondering why they didn't have any toys. ("Grand" and "Toy," I learned later, were the company founders .) Later I could never understand why they had two sets of prices -- one for retail customers, and huge discounts for commercial accounts.

When Staples and Office Depot bought big, bright stores and high-tech wizardry to Canada's office-supply market, Grand & Toy seemed to be caught napping. But now G&T, which calls itself Canada's No. 1 source for "complete business solutions," is staking a leadership claim by helping small businesses get online.

According to a release published today, "To show that they understand and support the needs of Canadian small businesses, Grand & Toy has launched Website Design & Hosting services, an easy and affordable way for entrepreneurs and smaller organizations from coast-to-coast to be available 24/7."

"At Grand & Toy we know that time and money are limited for small business owners," said David Addison, General Manager, Services. "But we also know the potential of growing that business with a simple website offering. That is why with our new Website Design & Hosting services, small businesses can have a site that looks as professional as the large corporations at a fraction of the cost."

Costs? G&T offers "an impactful, customized website design" beginning at $499.95. It also offers hosting plans from $12 a month.

Many business owners have trouble knowing what to put on a website or where to find the help they need, so this service appears to meet a huge industry need. The test, of course, is in the details of the pricing, and the quality G&T offers.

Web design for small business is often handled by kids, friends of friends, or networking specialists who know nothing about design, so there is room for a quality, brand-name service.

But I have my doubts that G&T can compete on price, which, in my experience, is the No. 1 concern for most small business owners. Competing with teenagers and students is never easy.

For more information on the new service, click here.

(Bonus note on selling to business owners: Help your customers find information fast. Grand & Toy's press release commits a cardinal error by directing prospects to their home page, www.grandandtoy.com. Any busy entrepreneur who hits that page will look around a few seconds, observe that web design and hosting are mentioned nowhere, and then take off. Never to return.

Don't expect them to persevere and go, "Hmm, should I try clicking under "Home? Technology? Services? G&T Brand? Deals? Customer Service? Heck, I've got all day, I'll click them all!"

Pick an easy URL, (e.g., www.GrandandToy.com/web) and communicate directly.
Never expect entreprenurs to make an effort to find the information you've promised. They ain't that interested.)