3
Mar 14

What Happens *After* You Open Your Business

I was browsing the web today and came across a string of "How To Start A Business" articles like these:

These are all great resources if you want to start a business. But they are all the "How To" and not the "What Happens After..."

If you type in "How to Start a Business" on Amazon, you'll get over 8,000 results. Many have the exact title: "How to Start a Business" or "Start Your Own Business" or "How to Start a Business."

These books are great. I read several of them when I was starting my retail store. But... they all follow a familiar outline:
- Identify the business opportunity
- Write a business plan
- Figure out your target market
- Get a location
- Get financing
- Set up the legal structure of your business (including registering a name, getting a tax ID)
- Register for state and local taxes
- Hire some employees

...and that's about it. They all seem to stop when the business really starts. Okay, some might include the start of a marketing plan and some might tell you to set up social media accounts.

But these books DON'T generally tell you about:
- Dealing with your business when an employee quits on short (or no) notice
- What happens when you're burglarized
- What to do when direct competition opens up right down the street
- Managing your finances when the current months sales aren't going to cover it
- Setting up a sustainable marketing plan... since marketing can never, ever, ever stop
- Responding to an unhappy customer
- Handling unexpected landlord woes

...and much more.

This is why I wrote "Minding My Business." Because I had to deal with all these things and felt very alone at the time. I had a couple other business owners to converse with, but I was so swamped with my own problems, it was hard to reach out.

My book is written memoir style - I have stories about employees, customers, marketing, and money, money, money. My hope is to reach those of you who are in the planning stages or who are considering taking an entrepreneurial plunge.

2
Mar 14

National Small Press Month... Marketing Challenges

It's March. Which means it's National Small Press Month. I didn't know about that until today when I read one of the weekly emails I receive from my old book publisher, Outskirts Press*. They provided a list of things that I could do to market my book this month.

To be honest, I've always struggled with marketing plans. I did it when I had my store (and only my store - my marketing efforts were lacking when I went back to my full-time engineering career), and it was A LOT of work. It was constant, never ending. What things could I do to attract attention to my store? To bring customers in the door? Every month there's a holiday or some other designation that business can latch on to as an excuse to draw attention.

I apologize if I'm making that sound like a bad thing. It's not. But every year, it makes it difficult for businesses to stand out. While I'm about to use "Small Press Month" to promote my book "Minding My Business" (which I'll get to a little later in this post), you're also getting bombarded by emails and social media reminding you that March is also National Chronic Fatigue Awareness Month and National Frozen Food Month.

A business owner needs to be extra creative to stand out OR (and this is more likely for most of us) prepare twice as many emails, tweets, and blog posts.

To be clear, I am still a business owner. No, I don't own the retail store. But RIOT Software is a business (I do small consulting projects these days, mostly writing custom Excel VBA macros for people) and more relevant, my book is a business. I have to track income and expenses and market to find customers. That's a business right there.

So... back to Small Press Month. Perfect time for me to hunker down with some extra marketing. I will probably use this as the excuse I was looking for to send my local newspapers a press release on the book. Every business owner should find any excuse they can to send the local papers a press release. When I owned my business, we were featured a few times in the local papers. When my first book came out, same thing.

Another good way for a business owner to use "National Something Month" is to educate their customers and potential customers. Before the month is over, I will post about my path through independent/small publishing. Promise.

Have an interesting marketing idea to share? I would love to hear it!

And in honor of all the things in March, please get yourself some frozen food (ice cream counts or some frozen pie if it's March 14th) and honor the Small Press by reading a copy of my book.

(* My first two books, Cute Little Store and Cute Little Store 2 were published by Outskirts Press. Minding My Business was published in Oct 2013 by Skyhorse Publishing)

14
Feb 14

Snow Storm = Unplanned Expenses

This morning, I drove past the retail center where my store used to be. Several piles of snow had been constructed to make way for cars to enter and exit the parking lot. It brought back memories of snow and problems with my landlord and paying out money I didn't have... <shiver> and why I wish as a small business owner, I would have kept an emergency fund.

I thought I discussed this story in detail in my book, but apparently not. On page 27-28, I wrote a teeny tiny bit about the related topics, but I never tied it together in the larger story.

Here's the small extract from those pages:
 "Common Area Maintenance (CAM) increases: In addition to rent, you typically also pay something called CAM or triple-net. This covers the maintenance costs like landscaping and snow removal in your shopping center. It’s typically not fixed—it goes up and down each year based on the real cost of the year before. Also, when the landlord figures out whether or not it goes up or down, they can also charge you a one-time payment to cover the previous year’s actual costs (or give you a credit if costs were less than expected). Well, after the first full year, when our assessment came in, we owed almost twice our rent! It was a lot of money at the time and was completely outrageous. It almost put us out of business.
Snow Removal: Our first winter brought a huge snow storm, and even though we were required to be open, the snow removal in our parking lot was miserable. We got phone calls from several customers saying they tried to get to us but couldn't. In two or three days, I estimate we lost at least $500 worth of business solely from the people who told us they couldn't get through. I don’t want to think about how many couldn't get through who we don’t know about. "

I need to tell you the story today, because it's a GREAT example of the unexpected financial things that could pop up.  It's a GREAT example of why you NEED to have an emergency fund if you're a small business owner.

Yes, in February 2003 we were hit with an unexpected snow storm that dumped an unusually large quantity of snow on the region. Everything was closed, of course. But as a fairly recent business owner that catered to families with kids, all of whom had a snow day, I felt the need to make sure my store was open.

I drove my Jeep Wrangler and was able to make the trek out of my neighborhood and down to my store. I opened the place up and was greeted by phone calls from people complaining about the snow in our center's parking lot and how they couldn't get to us.  At the time, all I could think about was the lost business.  I'm pretty sure if our lot had been clear, we would have netted another $500 or something that day.

Eventually, the snow melted and things returned to normal. I forgot all about it.

Until that December, when I received a letter from the landlord saying I owed an addition $6,000 in rent. Note that this was TWICE my normal monthly rent. So that's A LOT.  And if you look at our sales numbers for those months, it was about a third of what we were bringing in. In other words, $6k was A LOT of money to me at the time.

Needless to say... I freaked out. (It was Christmas Eve, too, btw.)

When I calmed down (a little), I spoke with other store owners in my shopping center. Everyone received a similar letter and everyone was in the same freak-out mode. Since CAM was assessed based on the square footage of your retail space, a store that was twice the size of mine had a $12,000 bill.  Also, CAM for the next year is always based on the previous years expenses, so my new CAM more than tripled for the next year.

We got together as a group. I hosted a meeting at my store after hours one night. We wanted to see if there was anyway to fight this. If we did, it would have to have been done as a group - none of us could afford the legal fees to do it as an individual. We invited a business lawyer I knew.

Everyone understood that CAM could fluctuate, but we were all baffled as to how it could go up this much. Apparently, there was some issue between our landlord and the snow removal company and the snow removal company took the landlord to court to get their payment. Our landlord was able to pass on not only the additional snow removal charges, but their legal fees as well!

We were not successful in getting the landlord to reduce the charge... how could we? Our lease's were pretty straightforward. The only thing that they agreed to was to let us pay it over time. I think I paid mine over the course of 6 months. Which was still an extra $1000 a month in rent that I hadn't planned in the first several months of 2004.

What can you take away from this?
1) You MUST have an emergency fund! An emergency fund could have covered this.
2) When negotiating a lease, I have since learned that you can ask for things like a cap on CAM. (Doesn't mean you'll get it, but I never even thought to ask.) You can detail out things you won't be responsible for like legal costs incurred, etc.
3) If I didn't mention the emergency fund, let me say it again: You must have an emergency fund. You never know when you'll be hit with something unexpected and out-of-the blue.



PS... the following year, when CAM was reassessed, since there were no major snow storms or legal things that could get passed on to me and my fellow tenants, the new assessment went way down and I think I even got a (small) CAM refund.
12
Feb 14

Can You Afford It? Where "It" Means Starting Your Own Business

(Hopefully folks will not  confuse this post with Suze Orman's 'Can I Afford It?' segment on her weekly show. Which I watch every week, btw!)

When my new book came out and I set up this blog, I polled some friends for ideas on what topics I should write about. One of them mentioned "start-up cost fears" as in: "Most people are afraid to start a business because how much it costs to start one (real or perceived). Maybe some suggestions on how to obtain financial support would ease the fear."

Oy vey. Having lived this, and having dealt with the financial aftermath of a business that didn't pan out financially, I do have a lot to say on these topic(s) and will likely delve into many details in a whole suite of blog posts.

But before I can tackle details on start-up finances/financing, we gotta talk about something more fundamental:  Can You Afford It? Can you afford to start your own business? And what does that question mean, anyway?

It means several things:
1) If the business requires you to reduce your income, and you can do that, then you can afford it
2) If the business requires you to draw NO salary for a period of time, and you can do that, then you can afford it
3) You have no extraneous credit card or other debt
4) You have the ability to finance the business for some start-up period of time

Number one and number two MUST, MUST, MUST be true. In order to live, you're likely paying rent or mortgage (maybe you're lucky enough to not to have one of these expenses, but I'm going to assume that the majority reading this do) which means that you need a way of paying those expenses month after month. Ideally, you have a chunk of money in a savings account... at least a years worth of living expenses... because you can't guarantee that your new business will provide you with an income anytime soon.

Some folks, especially those really anxious to start their business will argue with me about #3. Yes, technically, if you have a bunch of consumer debt, you CAN start a business, but you might be making your life more difficult than it needs to be, because it means you NEED even more of an income to cover that debt. It also might make getting credit for your business more difficult... more on that in a future post.

When I started The Pot & Bead, my retail store, the plan was for me to draw a salary as the owner/manager that was only 60% of what I was making at the time as an engineer. At the time, it was enough to cover my personal bills (my part of the mortgage, student loan payment, etc etc). However, about a year into the business, sales started to taper off and I couldn't draw a salary anymore. At the time, I was married, and my eventually ex-husband was able to cover the expenses at home. But when we wanted to get divorced, I had to support myself and couldn't with the business. That's one of the two primary reasons I went back to my engineering career.

All of my regrets related to the business, and in my personal life, are financial. They tie together because not having all my personal financial ducks in a row put a lot of limitations on my freedom and what I could do with the business. In other words, I had a lot of debt personally, so I needed to draw a certain salary. When I couldn't draw that salary anymore, I had to go back to my engineering career.  (Luckily, the engineering career has been good to me since... but that's also another blog post or ten.)

Here are some things that I WOULD DO and WOULD NOT DO related to businesses and finances if I had to do it all over again:
- WOULD: seek financing from friends and relatives (if something goes wrong and you need to modify your repayment plan, friends and relatives are easier to work with than a bank)
- WOULD NOT: defer student loans (interest still accrues when student loans are deferred, so I wound up paying more for my education than I ever planned)
- WOULD NOT: take out a 401k loan (I think 401k companies should be required to counsel individuals on the financial repercussions of this decision before they're allowed to take a loan)
- WOULD: avoid credit card debt like the plague (isn't this obvious?)

It's never to early to think about your financial situation if you are thinking about starting a new business. Even if you don't know any details about that business, work on getting your personal finances under control. It'll be all the more easier to go out on your own later.
17
Dec 13

Unexpected Side Effects of Entrepreneurship and Standing at the Office

Most people in my circle know that I'm a weight watchers lifetime member (which means I hit my goal weight and maintained it for six weeks). But most people don't know how much I've struggled over the years since to maintain my weight.

I became a lifetime member a few months before I opened my retail store in late 2002 - more than a decade ago! And for the first two years that followed, I had a VERY EASY time maintaining my weight. I call this one of the Unexpected Side Effects of Entrepreneurship. Two things caused this pleasant Side Effect:

1) Since I quit my "day job" I no longer had any disposable income and almost never went out to eat

2) Instead of an office job, the retail store had me on my feet all day

Two years later, when I went back to an office job, the weight started to creep up a little. It wasn't that bad or much... I was still on my feet a lot during the evenings and weekends, so I was still managing it.

But in the last couple of years, particularly since I had my son, I've had a REALLY rough time of it, mostly because I'm FORCED to sit all day!

I've been noticing a trend around my office... I know at least four others who have varying setups so they're standing all day. I started thinking about it... partly because I've also noticed that my own posture has not been good and my upper back has been bothering me. So I've polled all the folks with the setups and picked on that was easy and inexpensive to implement (my company provides "normal" office furniture... that's it). Said colleague, Braxton Cook, received enough questions about his setup that he wrote his own blog post to explain:

http://braxtonnow.blogspot.com/2013/06/lean-like-ingeniero.html?m=1

I set mine up today. Here's my (current) setup:

Standing desk setup

My standing desk setup

Mine differed from Braxton's in a couple ways:

1) I got the smaller size Gallant desk top from Ikea

2) I'm forgoeing the chair

I still have a couple tweaks to perfect my situation.... I will be buying a dual monitor stand and I need to figure out a better setup for the laptop and docking station that's currently located on the floor under the desk. It's not in any danger of me kicking it, but I want to use the space for a foam roller. Many of the things I've read about this kind of setup say that you should have somewhere to rest a foot occasionally.

So it's only been one day with this setup, but already I'm enjoying it. I didn't have the mid-afternoon drowsy lull I normally do and overall I felt better with the little bits of movement. Even now, in the evening when I'm usually fighting a ton of fatigue, especially this time of year, I feel pretty good.

I'll status this setup again in a couple months to see if it's still working... but for now, I'm one happy software engineer!

 

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4
Dec 13

"It's easy when business is good"

Most of my friends and family are going to be surprised at this little tidbit: I have a subscription to Marie Claire magazine. I know, I know. I'm not exactly a model fashionista and I don't wear makeup. I'm in it for the articles. For realz. (Okay, maybe I also like to gawk at $900 shoes I'll never let myself buy...)

But this random article in the December 2013 issue that arrived at my house today caught my eye: an interview with Williams-Sonoma CEO Laura Alber.

IMHO... anyone who is running their own small business wants to pay attention and take whatever bits of advice that anyone at the top of a successful business is willing to dole out. So here's the quote I think is worth sharing from this article:

"I think it's easy to be a good leader when business is good, but you really see people's leadership skills when business gets tougher."

She's speaking about the recession and goes on to talk about what they did:

"We cut a lot of waste that is forever gone. We're careful about hiring. We never want to let people go because we've hired too many."

When I started my retail store, things went well right off the bat. Meaning, sales were higher than I expected. But a few years later when the recession hit, I wasn't prepared. I'm not sure it meant I was a bad leader, but I certainly wasn't a prepared one, and that made all the difference.

If I could do it all over again... I would have been leaner from the beginning. Kept more moola in emergency savings, for one. Once sales had dropped off, it was hard to keep up with routine expenses and hard to prioritize what to spend every precious dollar on.

It's exactly like preparing for possibility of loosing your job. Personal finance experts say to keep anywhere from six to eight months of expenses in an emergency fund. So if the worst happens, you can keep life going while you look for a new job.  I wish I had done the same to keep marketing and advertising efforts going, while not feeling like I needed to skimp on inventory during those lean times.

But this is why I'm telling you about my mistakes... so you can learn from them. This is exactly what I do in my new book.  (Nice segue, eh?)

Moral of this blog post: Learn, learn, learn from others. Copy what the successful peeps did right and avoid what the non-successful peeps did wrong.

(...and you never know what random bits you'll find in random magazines.)

26
Nov 13

Patience, Kemosabe

Did you know that "kimosabe" actually has a place in the urban dictionary?  http://www.urbandictionary.com/define.php?term=Kimosabe  I kinda thought it was too old school for that.

This post is simply a welcome, a hello, and a plea to say wait a couple days while I get this WordPress blog set up and configured to seamlessly integrate into the RIOT Software website. Once complete, oh, boy, you better be ready because I have so much to say about software, small business, my new book ("Minding My Business"), money, robots, STEM education, artificial intelligence, my new book ("Minding My Business"), life, and my new book ("Minding My Business").

Did I mention I have a new book out?  It's called "Minding My Business: The Complete, No-Nonsense, Start-to-Finish Guide to Owning and Running Your Own Store."  It's available on amazon in physical and virtual forms.

It's a book for folks considering starting their own small business or folks who already have and are looking for 1) moral support 2) hard data on what happens to your finances and 3) any advice that will prevent them from making a bunch of mistakes that will impact the business. Basically, it's a memoir of my time with the retail store that I started, ran, and eventually closed.

I learned a lot of things the hard and costly way, and wrote it all down in order that others won't go through what I did. If you read my old books, the "Cute Little Store" series, this is a republishing of those. It's both books in one, with a chapter and some stuff added mostly about social media which didn't exist a decade ago when I opened my store.

Enjoy... more blog bits are churning through the neurons in my head...