How to start a business today

If you know how to blog, podcast, share photos online, and basically use social media tools, you could start a business today.

Dress professionally.
Get a pad of paper and a pen.
Go to a business.
Ask questions.

This is where the magic happens. Ask them what they are doing to reach out and connect with customers. What are their problems? How are they communicating online? Can they update their own site? What are their goals? What is causing them the most pain right now?

The idea is to ask questions, important business questions, around what social media tools have the potential to do. If you are following Chris Brogan's series of Social Media Starter Moves for ..., then you can pick up additional business uses for these tools.

For more ideas about how to create these questions, read Communicate: Ask Better Questions.

I tested this approach myself. The target was small businesses. The product was an online workforce solution, just as mystifying as social media stuff, I promise. Asking questions turned out to be the single most effective way to help business people understand the benefits and commit to using our solution.

Questions naturally lead the conversation to the value you add by helping reach those goals. If you can help a small business person alleviate pain, they will do business with you.

Can you adapt this same model to other businesses?

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Got a Home Office? How deductible is it?

If you set up your business’s office inside your home, how will you go about deducting the costs of that office?

Since not all of your home expenses are for the business, then some sort of allotment must be made in order to accurately reflect business expenses. A certifiable “home office” that is used “exclusively and regularly as your principal place of business” or “for the storage of inventory or product samples” can be a tough goal to reach. You can check irs.gov/smallbiz and Publication 587 at http://www.irs.gov/publications/p587/ar02.html#d0e239 for further guidance.

Basically, if you can reach the standard, then you calculate the percentage of the home office/storage area to your total house square footage. This percentage is then applied to the various expenses of running your house that would normally be considered by the IRS as personal.

For example, if your home’s total living space (excluding the garage) is 1980 square feet, and, if you have a 12’x15’ “home office” (180sq ft) plus the attached closet of 3’x8’ (24sq ft) that equals a total of 204sq ft for your Home Office. This makes your business percentage 204/1980 or 10.3%. Therefore, 10.3% of household expenses may be business related—i.e., electricity, natural gas, water, sewage, rent or mortgage interest, home repairs, homeowners insurance, real estate taxes, etc.

Now, how can this be tied to your “envelopes of expenses?” Easy: label your envelope “Home Office.” On the outside record your calculation for percentage of office use. Inside put your utility bills after you pay them, your receipts for paid whole house-type repairs/maintenance, your notice of real estate taxes due (after you pay), your bill for your homeowners insurance (after you pay), your annual notice of mortgage interest paid, you get the idea.

If your “Home Office” is actually in a separate building or shed or you completely convert an unattached garage, but your utilities, etc are all inclusive, then you still need to calculate percentage of use. The best part of “shed working” is that there is a much lower standard for calling it your office (see the IRS web site). This is a good thing.

Some seemingly home-office-type items exist. These items may be totally or partially deductible on a different percentage from that allotted to your home-bound office. These items will require some special attention and their own envelopes.

Phone: You cannot, under any circumstances, consider the first land line into your home as a business expense—even if you never had a land line before. The IRS simply will not stand for it and they have never lost a Tax Court case on this issue. However, any long distance charges incurred for business purposes are business expenses. As are any special features you might have for strictly business purposes.

I have caller ID, call forwarding and remote call forwarding as the only special features. I signed up for them because of my business. I consider them business expenses along with their respective taxes each month.

Additionally, a second line to your home-office-shed or into the house for fax or internet connection or as a phone in your home office can be fully deductible.

Cell: If you carry a cell phone that you got for business use, or if you converted your personal cell to business use and you quit text-ing your bff, the associated costs are business expenses. If each month’s cell phone bill itemizes calls, you should mark any that are not business related even if your plan-cost is all-inclusive. Do this each month when the bill arrives. It will be much easier to do the closer to the event you do it. Besides the IRS loves “contemporaneous” records.

Internet/wireless services: If you can honestly say you incur these expenses for your business, then they are deductible.

Cable TV service: Well, this sort of depends on what kind of business you are in. If you are a part time, semi-pro actor/actress who feels that viewing the excellent performances on TCM, HBO, etc., enhances your craft, you could deduct the charges for those, but not the basic cable service. I know a farmer who uses his cable service to access a commodities forecasting “channel,” this “channel” is deductible as ordinary and necessary to his business.

We have been talking about these items being deductible, but where? Since you are a sole-proprietor on the cash basis, deductions go on the Schedule C.

Now, this is a topic that has gone to Tax Court innumerable times. So, I'd be glad to try to answer any questions you have about home office deductions!

[Photo by CC Chapman on Flickr, used under Creative Commons License.]

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

The easiest accounting system

So, you have decided officially to become a “business.” Now, what? Well, in order to know how well your business is doing, you will have to keep track of income and expenses: just guessing is not enough.

Unless you have specifically chosen otherwise on your tax return, you'll be reporting on a cash basis. This means there is no income until you actually receive the money and you only incur an expense when you pay it by cash, check or credit/debit card.

One of the simplest most straight-forward methods I have been able to think up involves the use of several envelopes. These can be small size or legal size or larger on up to even 9”x12”.

Start by labeling the envelopes. Get a broad-tipped, black permanent marker. Print in block letters big enough to be read easily. This is not the place to get fancy. Keep it simple and plain.

The first and most important one is “Income.” Into this you could put your copies of the invoices you have submitted to customers for which you have been paid. Or if you would rather keep your copies of the invoices somewhere else, you could just simply start listing—using a black fine line permanent marker—the amounts and dates received and maybe the name of your customer: quick to total up; all at hand.

Now, start labeling one envelope for each type of expense you normally have. Maybe “Supplies” and “Advertising” and “Travel” and “Entertainment.” You get the idea. However, there can be a problem with your utilities if you work from your home. More on that in a later post.

OK, you have all your envelopes labeled using a broad-tipped black permanent marker. Now, let’s make the whole thing work. You have your income all listed on the “INCOME” envelope and you have several labeled expense envelopes. Into each expense envelope, put the receipt for each expense once it is paid—remember paying with a credit/debit card is the same as paying by cash or check. On the outside of the envelope use black permanent marker (this one can be fine-line) and record the date and amount.

As you add more and more receipts, keep the outside record lined up one under the other so that adding them up at the end of the period will be easier. If you use a calculator with a tape to total the items, staple the tape to the outside of the envelope or place it inside with the receipts. Write the beginning and ending dates included in the envelope and the total expenses for this envelope’s category. [Quick Tip: It can make the total easier to spot quickly if you underline it with a double line or circle it.]

Now, get an envelope large enough to hold all the other envelopes. On the outside list the dates covered. Then record the total income for that period. List the name and total of each expense envelope that you added-up. One more addition: add all the totals of all the expenses together for a grand total of expenses.

You have just made a very good Profit and Loss Statement. If you go ahead and subtract the grand total of expenses from the total for the income, you now know how much you made for the period covered by your envelopes!

If you break the year into several periods—say, quarters, you can easily add your totals for each quarter. Add the totals for all four quarters and there is the P&L for the year.
Your tax return is now a snap to prepare!

Another benefit is that you can quickly and easily pull together a Profit & Loss to give to your banker or prospective investors.

Start the process all over again.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Apply the Simplified Marketing Plan to Online Tools

With 89,567* online tools for connecting, sharing, networking, etc., how do you ever prioritize and keep online socializing from taking over your work?
[*I made up that number, of course]

Our Friend Glenda Watson Hyatt set me to work on this topic, and explained what she meant via email:

My quandry is: I have all these tools - twitter, facebook, MyBlogLog, YouTube, flickr, ziki, Linkedln, stumble, digg and, of course, my two blogs - some of which I use way more than others. I would like to know how to integrate them effectively so that I am using them efficiently and maximizing benefits. How do I analyze which ones I should keep? Drop? Add?? How much time should I spend on each? Doing what? I mean could spend all day every
day using them, but that doesn't get my actual work done. Where do I draw
the line? And then how do other marketing strategies [ezines, article directories ] fit in?

Believe it or not, I have a plan. It's our Simplified Marketing Plan. Here's the outline:

1. Name and describe each market
2. Tell what methods you will use to reach them
3. Establish the cost in time and in money
4. Mesh this with your business plan

1. Know your markets.
If you haven't defined each of your markets, jump on that now. For a relatively simple consulting business, you might have several target customers. You might target small businesses for consulting, individuals for coaching, and larger corporations as sponsors for your blog or info products. Make sense?

For example, if Glenda offered disability issues awareness training and consulting, she might target medium size companies, their HR managers, and HR related organizations. (I'm making up this example about Glenda's business, so don't jump to any conclusions.) She'll need to find out where those people spend time online, and what services they need, want, and purchase.

You need to know about all those different customers so that you can develop the right compelling offer for each of them, in the next step.

2. Decide on methods.

Once you know your targets, you can develop a compelling offer to hook them. For example, when Susan Reynolds taught children's art classes, she developed an idea for a short drawing lesson for moms and kids together. It was a free sample, addressed the proper target (moms), and left a lasting impression. That's a compelling offer!

To get that offer in front of the right people, you need to use the right online tools. In step one, you should have learned where your targets are online. Then you use these online tools to share that offer when appropriate, and to position yourself as an expert.

Start with a list of the online presence tools you use right now. Ask customers which ones they have heard of, and which they use. Then expand out to some potential customers. Ask them the same things. Then visit other tools and see who is present. You goal is to come up with a list of online tools that have the potential to let you connect with customers, then build them into the plan.

Glenda might find that her targeted folks use the Society for Human Resources Management website, read a few specific blogs, participate on a few online forums, that most of them are on Facebook, and that a pocket of them are on Twitter. Given this short list, she can set goals and measures for herself on these specific tools. Yes, she can still play with other tools, use other networks for personal enjoyment, or just learn new things, but it doesn't count as part of working the plan.

I'm not suggesting you change how you act online; there is no need to be all sales and advertising all the time. Keep using these tools as a part of the community, not as an advertiser. Do let folks know what you offer; talk some about business, just so they'll know you are in business! In fact, I just solicited WP design quotes from Twitter, and I contacted one person directly because they announced they were in the business. It does pay to talk about yourself, in moderation.


3. Establish the cost in time.
Now we're getting somewhere! Of course, there isn't just one answer to this, so we'll have to make some guidelines and share some suggestions.

Your plan focuses on being sure to use the methods that reach potential customers, and to place your compelling offer in front of them.

If Glenda's targeted customers are using Twitter, terrific! She's already there, so she can add that to her marketing plan. Maybe she doesn't currently visit the forums she discovered by talking to customers, so she'll pick the most promising one and add it to her plan. Glenda has her own blog to include in the plan, along with the selected blogs frequented by her targets. Other tools not in her plan are considered outside of work, or personal time activities.

How much time? Well, put more time in on those tools that produce the best results. If you get most of your blog traffic increases from Twittering, you'll want to develop the habit of carefully promoting posts on Twitter. For less productive tools, give your self less time with them. No need to go hang out at MyBlogLog, if you can learn to update it in just a few minutes.

4. Mesh it with your plan.
I recommend you integrate these tools into your daily plan. You do have some kind of daily plan, don't you? No? Well, I would recommend you Focus on Your Income Producing Activities, including your online marketing tools. If you don't do anything else, do this!

You

How do you manage your online time? How do you allocate your efforts among the myriad of tools available? I'd love to hear your experiences.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

How to convert freebies into paying clients

Every small service business gets them: people fishing for free help, or asking twenty questions so they can go off and do it on their own. If you don't have an established way to help them easily and convert them into paying clients, you are missing out on business and going crazy, I'll bet.

Cody Heitschmidt (@codyks) mentioned to me that he gets three or more calls a week from people wanting his free advice so they can do their own websites. What can he do to convert these people to potentially paying clients, without driving himself to distraction and bankruptcy with giving free help?

Educate them on your terms

The basic answer is to offer them the help they need, but in a way that respects your valuable time. Here are two ideas of how to educate people on your own terms.

Create a standard booklet you give to people that want to do it themselves. Invest a few hours in creating a simple how-to booklet, and recoup those hours you would normally spend trying to assist the freebie-seekers. You probably have all the info you need on your blog.

Why not do workshops? Charge a modest fee. Then Do-It-Yourself-ers can be encouraged to take the class. This lets you group up the learners, help them all a certain amount, get paid for it, and allow some of them to see that they really do want professional help. Then the next time you get hit up for more free advice, you can hand out a flyer for your workshop.

The goal is to give them some help, but do it in the least time-intensive way possible. And to make them as likely as possible to come back when they graduate to wanting professional help. The more you give away, the more you get, if you are smart about how you do it.

Cody already teaches classes, and he has plenty of clients. But we all need ways to give good customer service, even before the person becomes a paying customer.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

When NOT to be a Sole Proprietorship: Forming an LLC or S Corp

Sole proprietorship is the simplest form of business, but it also has some disadvantages. So for this installment of the Small Biz 100, I'll talk about some of the situations where you don't want to be a sole proprietorship and what types of business you might want to form.
Note: All of this discussion is specific to small businesses in the USA.
Note 2: More info on when TO be a sole proprietorship is in the Checklists for starting your first business post.

When not to be a sole proprietorship

If any of these factors apply, then it's time to look at other forms of business:

Ownership - if you want to bring in a partner
Liability - if you have the type of business where you are more likely to be the target of a lawsuit
Taxes - if you are going to do so well financially that taxes are going to be an issue
Investment - if you want to be able to bring in other people in an ownership position
Selling - if you want to sell the business and make it easy to transfer to new owners

Other business structures

If any of those qualifiers applied, or you have other reasons, you can start your business with a different form. If you've already started your business, you can convert to another form at any time.

Above sole proprietorships, the two most reasonable forms are LLC or S Corp. These two share some benefits:

• Both offer some liability protection for owners (if the company is sued, you are not personally liable, usually).
• Both types can have multiple owners.
• Neither type requires a separate tax return.
• Both allow income to pass through to owners before taxation.
  

What does that "pass through" business mean? It means that the LLC or S Corp doesn't file its own tax return and pay taxes. Instead, the income is passed through the company to the owners. Then the owners declare this income on their own tax returns. Of course, no matter what form of business you create, you are responsible for paying taxes on the income of the business. Sorry! No getting around it. You may be able to reduce your overall tax burden by allowing the new business to hire you as an employee. But if you are getting to that point, you have also gotten a tax advisor, right?

The requirements to form both an LLC and an S Corp are fairly similar.

• Both are treated as separate entities and require a new Employer Identification Number (EIN).
• Both require a written agreement to determine how they will operate.
• Both require filings to create them.
  
• Both require ongoing paperwork, such as official meetings and documentation. (The LLC takes less of this, if you ask me.)
  

LLC - Limited Liability Company
LLC's are regulated by the states, and the rules vary. This means there is not one single guide for creating an LLC. I could tell you all about how I formed mine in Oklahoma, but it wouldn't help you create one in Indiana. The general guideline is to check with your Secretary of State. They usually regulate these filings. You can also check in with your local Small Business Development Center, and they can give you the local scoop.

A few general rules apply nationwide. The owners of an LLC are called members, and the first filing is usually called Articles of Organization. You'll also need to create the governing document, usually called an Operating Agreement. All the members have to agree to those operating rules. Some states allow one person to form an LLC on their own, and some states require a minimum of two people to start up.

LLC's can be more flexible in terms of how they are taxed. An LLC can elect to be taxed like a sole proprietorship (probably best for one person LLC's), a corporation, or a partnership. This is another place where you want to invest in some professional advice, to be sure you select the proper form.


S Corp - Subchapter S Corporation
Because the S Corp is regulated by the federal government, the tax rules do not vary from state to state. So if you plan to do business with locations in several states, go with the S Corp.

Corporations are still created in your individual state, usually with a filing at the Secretary of State's office. Once you've formed the corporation in your state, you need to let the IRS know that you want it to be a Subchapter S Corp, by filing a form 8832 with the IRS. And you need to do that quickly, within 75 days.


General Partnerships and why I don't like them
Few people choose to go into a general partnership anymore. Every partner is responsible for every debt and decision of every other partner. That unlimited liability is enough to scare most people away, especially since more attractive options like LLCs and S Corps can cover partners.

But sometimes people end up in a general partnership by accident. Just like the default form of a single person business is the sole proprietorship, the default form of a multiple person business is a general partnership. If you go into business with a friend, without putting any arrangements on paper, you just formed a general partnership. The good news? You can re-form as an LLC or S Corp at any time.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

SBA Basics: 504 Loans

Recently Becky asked me to help with some information about US Small Business Administration (SBA) programs. Here are a few basics everyone needs to know; first, SBA does not do direct lending except for disaster assistance. They also do not have grant funding.

What do they do? They offer a guarantee to a lender that helps small businesses qualify for longer term, better interest and they give the lender a degree of comfort on an otherwise risky loan. If your credit is horrible and the project or business idea you are trying to fund is not viable, this program won't help you.

Here, just released from SBA is an excerpt from their latest BankNotes newsletter on the 504 Loan program.

Certified Development Companies can help small business qualify for SBA loans

Growing businesses are often unable to qualify for traditional financing because of the difficulty of coming up with a down payment of 30 percent or more. When a conventional loan is not possible, a 504 loan may be the answer. The SBA 504 Loan Program gives small business owners the following advantages: generally a lower down payment; below- market, fixed rate financing, which avoids the uncertainties or future market fluctuations; and a longer repayment term that brings debt service in line with the cash flow generated by the asset.


Virtually all types of for-profit small businesses are eligible for this program. Loans cannot be made to investment companies, or businesses engaged in speculation or investment in rental real estate.

The loans are for acquiring long-term fixed assets, such as land, build­ings, machinery and equipment. Loans can also be used for building, modernizing, renovating or restoring facilities or purchasing long-term machinery and equipment


The SBA’s 504 lending intermediaries, Certified Development Companies (CDCs),serve your community to finance business expansion needs through the 504. CDCs are nonprofit corporations set up to contribute eco­nomic development in their local communities. CDCs work with the SBA and private sector lenders in a public-private partnership to provide financing to small businesses.

The maximum SBA debenture is: $1.5 million for regular 504 loans meet­ing the job creation criteria or a community development goal; $2.0 million for loans meeting certain public policy goals; $4.0 for manufacturing loans.

Information on all SBA programs can be found on their web site at www.sba.gov

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Delegating without freaking out your clients

Getting past the point of being a one-person, do-it-all, no-rest-for-the-weary business means helping customers to work with your employees or subcontractors, as well as you. But if every client thinks you need to do every thing, how do you keep them from freaking out when you delegate their work?

This problem is common in reputation industries as diverse as design, consulting, hair styling and professional hunting. Clients feel attached to the person whose name is on the firm and insist on personal service. But that only works for so long, until you have more clients than hours in the day.

Can you just not tell clients that you subcontract? I say no. To not be up front about this could feel like dishonest, or at least misleading, behavior to a client.

Why they can't live without you

First, it helps to understand how this happens. It's part of how that customer was thinking long before they ever called you. Everything you put out into the world starts the process of relationship building. Each piece of information from you adds a layer to the image they have of you and their decision making process.

When they read your blog, follow your tweets, check your about page, see your business card, meet you at a conference, or talk to other clients, it feels like they are building a relationship with you.

You haven't necessarily met or talked at this point, but your future client is building a relationship with you in their mind. That's a required and important part of how people make decisions.

I'm betting that right now, everything you are putting out is leading to them building that mental relationship directly with you.

How you can change it

How can you acclimate clients to your delegating?

1. Let them know you delegate
Starting now, make a conscious effort to mention your helpers, whether they are employees or subcontractors. Talk about team efforts, or how your associate did outstanding work for a client.

Evaluate your About page. If you work with a group of people regularly, should you feature them? Look at your card. Is it just you?

This takes a fundamental shift in thinking for some of us.

2. Let them know you still care and supervise
Reader Bob Sawyer shared his technique for doing this:

As for clients not wanting to work with your subcontractors, I have one of those. I explained it this way to them: "I'm not a god. I can only manage a finite number of tasks, and at this point, I have subcontractors assisting. I will personally oversee the work they perform and ensure that it meets your standards."

How do you ease clients into the idea of delegation? Any great tips to share?

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Two ways to build your small biz website yourself nearly for free

Not every small business can afford to hire someone to create or maintain a website. So let's go over some relatively easy do-it-yourself ways to build your site, kind of two by two. It just so happens that these are all free, or nearly so.

2 Free Website Builders

High up on the cool factor is Roxer. It's all click and drag, and easy to use. Very Web 2.0. They will let you use your own domain name, like allensretail.com.

Less "wow" but still very easy and polished is Google Pages. One neat feature is that it will automatically make a version of your pages optimized for mobile phone browsers. It will not let you use your own domain name.

To make up for that, I'll offer a bonus tool: Microsoft Office Live Small Business. One of our rural friends, Shady Hill Farm, uses this tool for their websites. A domain name is included for free your first year, but there is a small annual fee to renew it.

2 Blogging Tools

This is my favorite way to build your own do-it-yourself website!
A blog is just a special website made up of stories or articles, kind of like a newsletter. It also gives customers and readers a chance to comment on stories, building conversations. The two blog services I like are Blogger and WordPress. Both offer a platform for your own blog, and both will let you use your own domain name. The platform includes all the behind the scenes software that does the work. That lets you focus on writing stories, which works about like writing an email. Feeling brave? A blog can also include audio or video clips, not just text.

This is what I use for my liquor store's website. It provides all the basic contact info, plus I can update it with new product announcements, articles about wines, and drink recipes. You probably already teach customers about your product every day, so you could easily add that info to a blog and share it with your new potential customers.

2 Social Networks Ready to Go

Remember Yahoo! Groups and a dozen other similar group sites? Here are two new ways to do something similar for your fans and community, but in a more business like way.

Ning lets you build a complete social network, with profiles, forums, and everything else. Check out the Small Town group, part of The Society for Word of Mouth at Ning, for an example.

Google Sites are designed for group work online, and offer a bit more collaboration, though a bit less social.

2 Business Site Profiles

If you fill in your business information, your user profile on services like JumpUp or LinkedIn can serve as a website. They are designed for business, so these profiles give you room to include your contact information such as phone and email, details about your line of business, even hours or directions. You want customers to find your profile, so also check the privacy settings to make your profile public. Don't worry about people mis-using your email or phone number. The truth is that it rarely happens. If you feel more comfortable, use a secondary phone number and email address.

2 Important Tips

1. Get your own domain. Go to any registrar, and you'll probably pay less than $15 a year for your own domain name, like beckymccray.com. (Sometimes, it's way less than $15.) Then forward that domain name to the page you've created. The way you do this varies with each provider, and a few website tools (like FreeWebs) charge a fee for allowing you to use that domain name.

Two registrars: GoDaddy (which I use) and Network Solutions (which has agreed to sponsor one of our publications).

2. Be find-able. To make sure that customers searching for you can find you, you need to make sure search engines can find your page. Two techniques: keywords and links. Include the right keywords in all of your online presence. Your keywords are your name, your business name, your line of work or brands you carry, and your hometown or service area. Think of the words a customer would be thinking right before they search for a business or solution like yours. Then find other local websites to link to you, and link back to them. Submit your site to a few online directories for your industry for some additional links.

To Summarize

This was all a very basic two by two approach to free web presence tools. I tried to keep it basic, because that's my point. Keep it Simple.

Plenty more examples, techniques, and ideas can apply to creating your online presence. I'd love it if you would share your stories and links in the comments.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

POV: A major decision point

All small businesses run into decision points. These are the things that can keep you up at night! Twitter friend Shama Hyder, of After the Launch, has come to one of these, and "tweeted":

After The Launch has hit a MAJOR decision point: To work IN the business or to work ON the business. Do we hire? Who do we hire?

Shama agreed to tackle some really tough questions about this critical moment for the Small Biz 100, to hopefully help other entrepreneurs face their own decision points.


What made you realize that you are at a decision point? One particular event, or more creeping realization?

I think it was when I realized we were getting more clients by the day. It gets to a point where you don’t know if you should focus on client work or new client acquisition. That’s how I realized we had to make some major decisions to make. We either grow or stagnate.

How do you balance working ON the business, while still managing to get the IN the business work done? Or, how do you carve out time for working ON the business?

In all honesty, this is what I am working on now. It’s hard. This is why I am considering hiring more help! I love working on the business and in the business, but I can’t do it all. That’s a huge realization.

Have you decided what position to hire? How did you decide?

I’d like to hire someone who is well versed in internet marketing and PR. Someone who can handle client accounts with ease. We have no problem getting new business, and being a marketing company, I am glad we can walk our talk. However, we need to continue to deliver great results to our clients-old and new. In that sense, I need someone who can pick up the ball and get in the game.

How are you fitting this with your long term goals?

I am still ironing this out….= )

What's the best piece of advice you can give to other entrepreneurs running into a similar decision point?

Just this morning an expert entrepreneur and mentor gave me this piece of advice: A small business’ life blood is cash flow. That should always be your top priority. Cash flow is what allows you to grow. We hurt ourselves initially by really undercharging. We signed up clients for long term agreements at foolish prices. This is a silly mistake, but I hope others can learn from it. We are now correcting this. = )

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Say NO gracefully

Part of being a successful entrepreneur is saying "no."

Small businesses are constantly hit with offers from potential suppliers, hopeful partners, and even potential customers. Then there are the constant requests for free help, volunteer work, donations, and even jobs. You can't possibly do it all. Let's face it. Being in business means saying "no" a lot.

There are positives to saying no.

What could possibly be positive about telling someone no?

• It keeps you focused on your business. It's your business, and your butt on the line. Learn to say no.
  
  
• It frees up that person to move on to their next prospect. What, you didn't realize they have a next prospect? Yeah, it's true, and you probably aren't the first on their list. So say no so they can move on.
  
  
• It lets you focus on projects that are core to your business or your heart. If you said yes to every single thing, you couldn't do any of them well.
  
  
• It makes you realize that you have a target market. If you can't say no to clients or projects that are a bad fit, you'll end up scattering your efforts all over.
  
  
• It keeps you in business. If you said yes to every donation request, you would go broke. It's hard to say no to the kids' Easter Egg hunt, but you might need to.

Twitterer Elaine Helm said it this way, "Saying no is good for you. And for those on the receiving end."

So when you say no, remember that. You are helping yourself and them by knowing what is right for you and what isn't.

Finding the words

Here are three steps to find the right words to say no gracefully.

1. Acknowledge the importance of the request.
2. Turn them down.
3. Optional: offer an alternative.

Chris Brogan asked Twitter for some help finding the right words to say no, nicely. GeekMommy gave good examples acknowledging the request.

• "Thank you! But I'm sorry I'll have to turn you down... I just can't work it out right now."
  
  
• "It would be a pleasure to work with you at some point, but I'm over-committed as it is right now. I'm sorry I'll have to say no."
  
  
• "Wow, thank you for the offer. I'm flattered, I just can't fit it in right now."

I added this way of acknowledging the request, a variation of one I read somewhere.

• "I'm glad that you asked. It's an important project, and I'm glad you're doing it. I won't be able to join, but wish you the best."

Jon Swanson came up with some good ways to offer alternatives.

• Give them a short burst of your time.
  "I can give you 15 minutes to help you figure out how you can not need me."

• Offer them an alternative prospect.
  "I'm sorry, I wish I could do that as well as _______. Wait. Maybe she's available. May I check?"

Harveymilk had a suggestion for when a request surprises you.

• "interim 'no'= 'let me get back to you'. Often gives you the time to get to an appropriate no."

What other ways can you add to offer alternatives when saying no?

And, just a moment of honesty here. We all struggle with this. Every single one of us. It's tough to tell people no. Here's the end of our Twitter exchange on saying no.

• chrisbrogan @BeckyMcCray - very nice response.
• BeckyMcCray @chrisbrogan Now I just need to use it more. :)
• chrisbrogan @BeckyMcCray - oh, we don't follow OUR OWN advice. That's silly.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Can you be self employed AND on Social Security?

A reader arrived at Small Biz Survival with this search query:
"I want to start a home business, but I'm on Social Security. Can I still be self employed?"

This sounds like a good addition to the Small Biz 100 and tax question for Maesz! Here's the answer:
-----
Yes... but

If she is not "full retirement age," too much net self-employment income may trigger some recapture of her Social Security benefits.

How much is too much? It is different each calendar year due to indexing. On the Social Security website (and page 2) there is a good discussion of this issue--complete with examples.

If she has reached "full retirement age," she can earn as much as she wants without any adjustment of her Social Security benefits.

HOWEVER, she is in any instance, responsible for self-employment tax and income tax on her earnings from self-employment.
-----

Thank you, Maesz!

If you have a small business question, leave us a comment.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

10 ways out of a crunch without hiring employees

As your business starts to take off, you'll hit a time when you have more work than you can do, but not so much that you are ready (or can afford) to hire an employee. How can you handle the crunch? Here are ten ways to delegate some of the work, without hiring any employees.

1. Family

Seems like every small business starts with this, but it can get you out of a crunch. Your spouse is probably your biggest supporter. I know that you already asked for him or her to take on extra stuff around the house, not to mention three jobs in the business, but if this is serious, it's serious. Set a time limit, and reevaluate these extra duties again soon. This is the one relationship you can't afford to mess up.

If you have children, you probably also have some tasks appropriate to their age. Look around at your extended family. Brothers, sisters, parents, cousins. Got any young computer wizards in the family? Who could pitch in for a short time? Make sure you are clear about what, if any, payment they can expect. And do set that time limit. You aren't looking to borrow them indefinitely.

2. Subcontractors

Unless your clients absolutely insist on you personally doing every bit of a job, look to your network of potential subcontractors. Let them know what payment terms from the client will be, and move entire jobs or parts of jobs off to other professionals.

If you think clients wouldn't like it, or you just don't know whether your clients would approve, ask them. Start with the most reasonable, friendly clients. Ask them permission to move a specific task or job to a carefully selected sub. If the client refuses, reassure them that you'll stick with the job personally for now. And start training your clients to work with you and your associates in the future.

(I'm working on a follow-up post on how to get clients to accept working with your associates and subs. I'll link here when I get it finished.)

3. Local professionals

OK, if it's crunch time, let go of your basic bookkeeping. Drop the idea of handling your own design, photocopying, computer maintenance or anything else you can get done locally. Think for a moment about the local professionals you already work with, like your accountant, office supply store, or computer repair pro. Ask them to take on a bigger role for you. See what other services they can provide or recommend a provider, to get tasks off your plate. (Yes, I know you are a nerd that likes to work on your own stuff, but get over it. You don't get paid to track down driver conflicts or a camera that won't mount as a drive.)

Once you are through the crunch, reevaluate these tasks. Is there a reason to take them back on yourself? Probably not!

4. Virtual assistants

You already know that virtual assistants can make a difference in your work. The problem is that if you are already in a crunch situation, you may not be able to invest the cash in paying a new assistant, or you may not be able to dedicate time to effectively delegating to a new VA. The way to use a new VA effectively in a crunch is to focus on delegating tasks that require very little training to get going. Start with travel arrangements, basic research, typing or editing.

5. Friends

When you are really crunched, it's time to find out who your friends really are. All of us hesitate to ask friends to help, but you'd be surprised how eager folks are.

When I broke my leg in 2006, several good friends stepped up and helped in my businesses. I know these folks would do the same thing right now if I called and said, "I really need help" whether I had any injury or not. What's more, if any one of them called me today, I would jump at the chance to help them out. That's friendship.

6. Delivery and pickup

Don't even consider driving errands around town at a time like this. Find out who does pickup and delivery, and use them. Can't find a vendor that delivers? Well, have you got a teen driver in the extended family? Bribe them with gas money to do the driving for you.

7. Household help

Working from home can multiply a tight work situation, especially if you are already leaning on your spouse for more help with the business. Call in some reinforcements for cleaning or babysitting. It doesn't take too long to get someone started in those roles. Take the kids to day care (outside your home) for some additional time. Of course, these choices take money, but it may be less cash outlay than trying to hire in your business. And, by the way, this may be the easiest place to bring in some family help, to get you more time to focus on business.

8. Drop it.

Seriously. Drop some things. If you can't do it, and you can't delegate it, can you drop it? Ask yourself, "what will happen if I don't do this?" Think through the consequences, and decide if you can live with that answer.

9. Delay it.

Well, if you can't drop it, can you postpone it? Some tasks are feasible to put off for a month or two, if you can see that you'll work your way out of the crunch. You might be able to stack up entering expense receipts, put off upgrades, or hold on to regular maintenance. Use this approach with caution. Make sure you aren't turning a crunch into an excuse for a bad habit.

Looking over your list of projects, decide which clients you can call to talk about delaying their work. You never know; they may be just as glad to put off a project because of a delay or issue on their end. You won't know until you ask.

10. Learn from it.

If you are going through hell, keep going. Start now with making notes of what tasks you plan to delegate in the future and how you'll accomplish that. Begin the savings account for paying an assistant, subcontractors, or service providers. It's easy to say, "I won't let this happen again." But if you are not setting the solution in motion, you are asking for a repeat.


How do you deal with crunch times in your business?

UPDATE: 11. Voice Mail

Seriously. Send all your calls to voice mail during designated times. You don't realize how much time the phone is eating up, until you block out time away from it.

I had thought of this one, but forgot to put it in! What other ideas do you have?

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Draw the line between free and paid

Many newly independent small business people make the mistake of giving away too much of their services for free. Many seasoned professionals run into the same issue, like Drew McLellan giving away the milk.

I was at lunch with a peer and friend the other day, telling her a story about how a mutual acquaintance had called me out of the blue to ask for some marketing counsel, which of course I gave her. My lunch companion said, "I hope you charged her." Gulp.

Andy Sernovitz suggests you give away more. In the comment section under Drew's article, he said:

Give it away big time. Blog it, share it, speak, write, whatever.

You ideas are your selling tools. Give enough away and real clients will pay for even more.

I give away 100 books/month ($25 each), blog everything, speak for free. And the more I do, the more work I get.

We want to share our knowledge freely. That's why we blog, answer questions, talk to others, and do everything we can to share. But we also need to make a living. On the other hand, the more we give away, the more we indirectly market our services. But how do we ever make any money if we never figure out how to charge for our work?

How do we know where to draw the line between giving away free ideas, and signing up more paid clients?

Liz Strauss has it figured out, and you do, too, even if you don't know it yet. Liz created A Personal Model for Business Life.

What I realized is that in my personal life I already draw lines around circles of who I can do things for. Bet you do something like it too.

So here’s how I extended my personal groups into business groups. Now I know who gets how much for free.

1. Some people are casual friends and acquaintances. When they come to town or when I go to theirs, I make an effort to meet with them. I’ll point these folks to where they can find the information they need.
   
   
2. Some people are friends. When they come to town or I go to theirs I do my best to meet with them. I’ll help these folks when I can, especially when it’s something I can do easily.
   
   
3. Some people are close friends. When they come to town or I go to theirs, I make time for them. These people will get my help and my time unless pressing projects must be a priority.
   
   
4. Some people are lifelong friends and family. When they have a need I’ll fly to them anywhere on the planet. They’re most likely to get my help and my time for free. We value each other deeply.

Now that I see I already have a working system, it’s easy to decide who gets how much for free. When people I hardly know ask me to do their homework now, I simply say, “I can tell you where you’ll find what you need.” If they push for me to help them, I say, “If you’d like me to do that for you, we’ll need a more formal arrangement to cover my time. I charge $XXX/hour for that sort of work.”

I can’t believe the difference it’s made. How silly of me that I didn’t make this connection before. I wouldn’t fly around the world for just anyone. So what made me think I should give everyone my work for free?

So simple. So straightforward. It incorporates a couple of special factors.

1. You don't have to turn into "that guy" who charges for every phone call, every second.
2. You get to be a giver. You can write, speak, blog, share, talk, and give away your ideas, without ever reducing the value of your paid services.

Workable?

[Special thanks to Liz Strauss for giving special permission to quote such a huge chunk of her article.]

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

The best channel to communicate with customers

The best channel to communicate with customers is ... the one the customer chooses.

OK, you can stop reading right there, if you'll take that sentence to heart. But for this installment of the Small Biz 100, I'm going to tell you a true story, as well as how to do this right.

My husband emailed five or six product questions to a small business. The email reply was this, and this is the entire reply:

Please call [phone number] and I will be able to answer your questions.

Ouch! You can bet your customer had a good reason for picking this particular method to reach you, and you just stomped all over it.

• If Joe wanted to call, he would have called. Why ignore the customer's preference?
  
• If the customer is deaf or hard of hearing, why turn this into an issue?
  
• If the customer has trouble speaking, why make it harder for them?
  

In this case, the customer would simply prefer to email, rather than call. But now he's looking for a different place to buy.

How do you make sure that you are using the right channels for your customers?

1. Offer many communication methods

Offer people as many ways to communicate with you as you can.

• Text message
• Email
• Online form
• Blog comments
  
• Telephone
• Skype
  
• Fax
• Mail
• Facebook
• Twitter
• Flickr
• SecondLife
  
• Voice and video message widgets
  
• You can add other tools in the comments, since you'll remember ones I missed.
  

Of course, not every business needs all of these. My liquor store uses phone, email, blog comments, Facebook, and mail. I'll add new tools as it seems reasonable and discard those that don't help customers reach us. You may use more, or less. Let us know in the comments.

Try to list as many of your open channels as possible on your website, printed materials, social network profiles, etc. Make it easy for people to quickly find the tool they prefer to talk to you.

2. Set notifications to come via your preferred channel

Almost all social networks allow you to choose from different notification methods, including text message, email, or RSS. So rather than bounce all over checking messages at each different network all day, set up the system to come to you.

3. Respond in the same channel as the customer

This is the key. Answer customers in the same way as they reach out to you. If Facebook sent you a text because a customer sent a message, go back to Facebook to answer.

Don't tell callers to check the website. Don't ask emailers to call in. Don't require online forms be printed out and mailed or faxed! (No, really, I actually still see this done!)

4. Be considerate if you change methods in mid-conversation

Sometimes, you will be better able to serve the customer if you can switch channels. But do it in two steps:

1. Answer as much as you can in the customer's channel of choice.
2. Then ask permission to switch to the better channel by explaining why it helps.
   

How do you converse with your customers?

Share in the comments.

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

Hiring your first assistant

For this installment of the Small Biz 100, Liz Strauss shares some insights on hiring an assistant, virtual or local.



Where can a small business person find an assistant locally?

Liz suggests looking in the local university, college, or even high school and technical education. You can also work with temp agencies, or any of the tools Chel mentioned in How to work with a Virtual Assistant.

What characteristics should you look for?

"Ego strength, problem solving, and curiosity," Liz said. "Anything else can be taught."

Look for a person who is wanting to develop, to become what you are, Liz said. They can start out by taking just the first round of tasks, like initial research, and can develop more skills to work at a higher level.

How do you get started?

"When I first started, I asked the person to come in for two hours a week. That held me accountable to find two hours of work for that person to do. Believe me, I always found more."

How can you justify the expense?

"The principle is that people with the highest level skills should be doing the highest level work. You, as CEO of a Fortune 100 Corp, making coffee might be nice, but you're a VERY EXPENSIVE coffee maker. Let's say the main work you do is worth $100/hour. If you can pay someone to write your bills $20/hour for 3 hours and you stick to what only you can do, you're not spending money, you're making it so that you can earn $240 more in those three hours. "

This article is part of the Small Biz 100, a series of 100 practical hands-on posts for small business people and solo entrepreneurs, whether in a small town, the big city, or in between. If you have questions you'd like us to address in this series, leave a comment or send us an email at becky@smallbizsurvival.com. This is a community project!

Get the whole series by subscribing to Small Biz Survival. New here? Take the Guided Tour.

How to work with a Virtual Assistant

For small town small business people, virtual assistants could be one of the best kept secret tools. A good VA can take some of the administrative load off of your shoulders, and make your business more successful. As a bonus, VA's can work from anywhere, so I see them as an emerging class of small town entrepreneurs. For this installment of the Small Biz 100, I interviewed former small town gal and current virtual assistant Michelle Wolverton, aka Chel Pixie, on how to work successfully with a VA.


Tell me about the services you provide. I know you do some things that I'm sure most don't.
I provide a wide range, so wide that sometimes it's hard to really narrow down the services that someone might need from me. Obviously anything that I can do virtually, which includes managing contacts (especially after conferences when you come home with all those business cards), making appointments and arranging for service that one might need in the normal course of business and/or personal, and I manage social networking sites for some clients.

The unique thing about me is that I can switch from installing and configuring Wordpress to writing a legal document to creating databases for musicians to market their music. These all came about because I'm a geek, have been trained as a legal assistant and got some experience working as an intern for Matthew Ebel.

What surprises clients or what don't they know?

Some clients are surprised at the depth of services I'm willing to handle, some are surprised to find out that x tool will work great for a task they need completed. I really think the biggest thing that they don't realize is what to delegate and how. It really is a big task to sit down and look at the things you're dealing with and say, oh okay, I can hand this over, but now I need to find the time to do that. It has to be a priority, and I think it surprises clients to know how difficult it is to get started. Once they start, it seems to get easier to think, "now that's something that I can give to the VA and it'll save me time".

How do people find a VA? How do they make a good match?

I've connected with clients via Ning, LinkedIN, Twitter, email, phone, Skype, and WOM. I think the first step is knowing that you CAN have a virtual assistant. Most corporations and companies look inside the box for someone that can be in office doing those same tasks for 8 hours a day. My clients tend to understand they can have someone do this work for them and not BE there. It can be hard to find someone that fits to bring into your home office.

I'm sure that some people utilitize Craigslist.org, job boards and other service, but I'm guessing that the majority of people find VAs through online networking services or WOM.

Trials are the key. Sometimes I hit it off with clients instantly, sometimes we don't, it really takes an effort on both sides of the fence to make the relationship cement. If the client is having difficulty knowing what they need me to manage or what they can have me manage, then it's a lot harder on both of us to find a good place to start. If you're going to take on a VA, be prepared to know what you can delegate. Ask yourself, "can I let go of this task and let someone else handle it for me?" If the answer is yes, just let go of it. It'll make your life easier. That's my purpose.

What makes it work? How do you manage across the distance?

To put it simply, it's the acceptance of telecommuting plus the tools to collaborate online. Tools like Google Documents and Calendars, Skype, Plaxo, oovoo, Todois