SO YOU WANT TO START A WEB BUSINESS - WELL LET ME TELL YOU SOMETHING.......Written by John Bubula
Like a lot of people, we often thought about having our own business, but weren't sure what to do. One day my wife, Kim, was talking to her brother, Chris, and he started to talk about his six pack abs. Not to let an opportunity to needle my brother-in-law go by, I told him he didn't have six pack abs, but had twelve pack abs from all Budweiser he drinks. Of course this brought on an insult melee, which turned into a brainstorming session on a company called 12 Pack Abs., which offered humorous athletic apparel. As discussion progressed, we felt that it was a novel concept to offer this kind of athletic apparel, but "Abs" was too narrow and thought Gym would be more encompassing. From that point on a business concept was born. After that we met almost nightly, getting ideas for different shirt designs. When we had ten or so, Kim, who is an artist, drew up color pictures so we could see designs. What transpired below are our experiences in setting up our company, 12 PACK GYM, Inc., and our web site www.12packgym.com.
Since none of us ever put together a business before, prospects of doing so appeared daunting. However, we figured we were a reasonably smart group of people with backgrounds in business, art, management, and distribution. The first order of business was to secure a domain name or internet address. I got a recommendation from a coworker. I looked up that company on internet, and they were offering a two year registration for forty dollars. I did a search on www.12PACKGYM.com, and it came up as available. The price seemed reasonable, so I signed up for www.12PACKGYM.com domain name. I later came to learn that we could have gotten that cheaper if we had researched other companies that offer that service.
The next order of business was to figure out what type of business we wanted to be. Since there are three of us, our choices were Partnership, Limited Liability Company or L.L.C., or a Subchapter S Corporation. Each entity has its own advantages and disadvantages. Partnerships are relatively easy and inexpensive to set up. The downside to them is you have unlimited liability. With an L.L.C. you have income treatment advantages of a partnership, but you have limited liability. The downside to these is that they are more complex and cost more to set up. Also, there are differences in how L.L.C.'s are treated depending on what state you are formed in and doing business in. In addition, if you get into legal trouble, because of their relative newness, there is limited case law for these entities. The last type of entity and ultimately one we went with is a Subchapter S Corporation. These are actual corporations that you own stock in where IRS treats income distributed to shareholders like a distribution from a partnership. You have limited liability. There is very strong case law for this type of entity and rules are same no matter which state you are in. The downside to these is that they are complex to set up; there are a host of different filing requirements with state you are incorporated in, and they cost more to set up. We set our S Corporation up with assistance of a company called Par Corp Services, LTD, which I found on internet. For a fee of approximately $400.00, they filed necessary paperwork with State of Illinois to incorporate 12 PACK GYM and answered questions we had.
There are also additional things to be aware of when doing business. In Illinois we have to collect and remit sales tax to state. Because we are so small, this is done on a quarterly basis. The state contacted us shortly after we were incorporated. They also need to know if you have employees for payroll tax withholdings. Another beneficial thing to get from your state is a tax exemption reseller's certificate. You contact your state government, in Illinois they have a web site, and apply for a tax exemption number. Once issued by state, you can use it with your suppliers to not pay sales tax on materials used in creation of your product. The theory is that tax will be collected and remitted to state when that product is sold to end user. Be careful only to use this for things that are ultimately sold to end user, otherwise, if audited you could face back taxes, penalties, and interest. Look through your state's web site or call them. They are happy to help you with making sure you are following all rules and doing things properly.
Another critical element to your business is lining up suppliers for raw materials used in your product. Kim went on-line and researched dozens of clothing companies and transfer companies. We requested information from them and talked to ones we were interested in using. Most of them are wholesalers and require reseller's certificate number. If you do not have one, they will either charge you tax or not sell to you. I would also suggest you find different, multiple companies that offer same or similar products that you can use in production of your product. This is just in case one is out of stock or goes out of business, you have another place to go to get what you need. At this point, you will need to also think about is packaging. A good starting point for packaging materials is a company called Uline. Generally, their prices and selection are best and you receive your order next day.
Another decision you will have to make is on shipping. Who will deliver your goods to customer? Chris looked at all big names like Federal Express, UPS, and U.S. Post Office. For our purposes U.S. Post Office Priority Mail was best solution.
Keeping track of your company's financial information is critical. There are numerous accounting software products on market for small business. Depending on size and complexity of your business, and your own comfort doing accounting, will dictate to a degree what type of software to buy. With our business I looked at Quick Books and Peachtree. Of those two, Quick Books is a good program, but geared for someone not that familiar with accounting. Peachtree, in my opinion, is a little more sophisticated and has a better inventory module. I priced out Peachtree on-line and purchased it for around $225.00.
In conjunction with all above it is advantageous to have a business checking account. We called around to many different banks and received information on all their small business checking accounts. We compared fees and services and decided on an account at a local bank that offered free small business checking if we write ten checks or less each month. Any checks written above that limit we are charge a fee per check. We can also, at any time, roll that checking account into a regular business checking account, but we will be subject to additional charges.
A big and expensive decision we had to make was on a web site. All three of us have purchased merchandise over Internet. So we were familiar with sites that offered merchandise for sale. As we surfed net, we wrote down things we liked about different sites we used and URLs so web designer could look at them as an example. Our next step was to roughly draw on paper what we thought our site should look like. My next step was to look at canned web site creation programs to see if I could do this myself. Truthfully, it would have cost us about $500.00 for software and I am sure I would have been in over my head. Kim had a friend that was a programmer and he said he would help us and create web site. He came over and got all our information and said we would have it in a month. Well a month came and went and no web site. We were getting a little upset because we wanted to hit Christmas season. Finally, after two months we decided to get a professional. I went on-line and searched on web site designers. A free service came up that required me to put in my desired information about our web site and it would recommend a web designer for us. We also looked in our telephone book for local web site designers and contacted several of them. Based on our requirements, they all submitted a proposal to create our web site. We talked to each of them on telephone and decided to go with firm that on-line search site recommended. Let me tell you, it was best decision we made. They recommended a small firm based in Chicago called www.evolvedsites.com. The owner is Siobhan Tobin and she is absolutely wonderful to work with. They are very professional, responsive, and will take time to explain things to novice people like us about how web site works. I would highly recommend that company to anyone looking to build a web site.
How to Survive Lean Times When You're a SolopreneurWritten by Susan Dunn, M.A.
Building a viable coaching practice takes time, sometimes months or years before your practice is self-sustaining. Here are some ways to supplement your income in lean times, generate money quickly when you need it, and make productive use of extra time.
1. Take a temporary job or part-time job that still allows you time to coach clients and build your practice.
It generates income, but also extends your reach. You'll meet new people who might need your coaching services Everyone's curious about temps! You'll also get a taste of different offices which will make you a better coach in long run.
2. Have sources of passive revenue -- tapes, ebooks, Internet courses.
Run a special. If they buy in next two weeks, they get half price. Give a Bonus -- buy one, get one free.
3. Make a push for referrals. Offer a bonus for referrals.
We so often forget to ask our current clients to recommend us to their friends! You should always be working referrals, but at low times, go back over your list. Email, phone, or ezine your list asking for referrals. Don't forget to ask other coaches for referrals.
4. Go back over 80-20 principle.
20% of your efforts and clients probably account for 80% of your revenue and return. Go back over your data and see where 20% is.
In doing that, you'll re-find 'sphere of influence' clients who've referred a lot of other clients to you or helped you in other ways. Take this time to take them out to lunch, write them a thank you note or call them and ask them how they're doing.