Flying Solo HOW TO BUILD A PROFITABLE ENTERPRISE.DO YOU WANT TO BE YOUR OWN BOSS? HAVE YOU THOUGHT about putting your skills and ideas to work for you? If you've considered joining the growing ranks of the self-employed, this series will provide you with the vital tips and resources you'll need to make it happen. The first article in the series explores strategies for making a successful transition from working for others to working for yourself, as well as four great businesses for the self-employed. Later articles will address tax issues, insurance, project-management skills, hiring independent contractors A person who contracts to do work for another person according to his or her own processes and methods; the contractor is not subject to another's control except for what is specified in a mutually binding agreement for a specific job. and growing your firm. Arnold Tompkins, president of Tompkins Consulting Ltd., a $250,000 Columbus, Ohio-based health and human services Noun 1. Health and Human Services - the United States federal department that administers all federal programs dealing with health and welfare; created in 1979 Department of Health and Human Services, HHS consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a , began mapping out plans for his career change well in advance of establishing his company in 1998. "I'd always wanted to do private consulting on my own, but was a little intimidated in·tim·i·date tr.v. in·tim·i·dat·ed, in·tim·i·dat·ing, in·tim·i·dates 1. To make timid; fill with fear. 2. To coerce or inhibit by or as if by threats. by not having the security a job provided," says Tompkins, 49, whose wife handles his company's bookkeeping bookkeeping, maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. . He has one employee. As a senior policy analyst for the Reagan-Bush campaign and the former director of the Ohio Department of Human Services, Tompkins was better prepared than many to fly solo. Yet the attorney-turned-policymaker used two years to strategically position himself in leadership roles in several human service organizations, providing himself with contacts in other states, before he made his move. He also spoke at national conferences to gain name recognition and saved $25,000 to start his business. Crafty Sisters' Gift Boutique Boutique A small investment firm specializing in offering specific, but limited services to a select number of individuals. Notes: These investment firms are the alternatives to large financial supermarkets. They provide a highly personalized environment for investing. , a Hempstead, New York-based craft business owned by Jayne Cain, 43, was started eight years ago with just $500. Her partner, Cassaundra Williams-Anderson, 49, makes jewelry jewelry, personal adornments worn for ornament or utility, to show rank or wealth, or to follow superstitious custom or fashion. The most universal forms of jewelry are the necklace, bracelet, ring, pin, and earring. . The best friends joined a group of craftspeople crafts·people pl.n. People who practice a craft; artisans. who sold their goods at a local market, but the arrangement went sour and the two linked up. They have no employees. The business includes Afrocentric giftware, dolls, ancestral ANCESTRAL. What relates to or has, been done by one's ancestors; as homage ancestral, and the like. jewelry and black figurines. With the launch of a successful Website (www.bnl.com/aasm/crafty), the business garnered about $40,000 in sales last year. The U.S. Census Bureau Noun 1. Census Bureau - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States Bureau of the Census defines the self-employed as those who work full- or part-time for a profit or fees in their own unincorporated Adj. 1. unincorporated - not organized and maintained as a legal corporation unorganised, unorganized - not having or belonging to a structured whole; "unorganized territories lack a formal government" business, profession or trade. Their businesses can also be structured as sole proprietorships A form of business in which one person owns all the assets of the business, in contrast to a partnership or a corporation. A person who does business for himself is engaged in the operation of a sole proprietorship. or partnerships. However, the U.S. Small Business Administration expands the Census Bureau's definition, reporting that the fastest-growing segment of self-employed businesses are incorporated. U.S. Census Bureau figures show that nearly 75% of all U.S. businesses have no payroll. Among African American African American Multiculture A person having origins in any of the black racial groups of Africa. See Race. businesses, this number grows to 90%. Individuals become self-employed for a variety of reasons: to increase income, to be their own boss, to establish job security or to develop their own idea. The SBA's Office of Advocacy reports the number of self-employed blacks grew 28.7% between 1988 and 1998. "The new millennium will be ripe with opportunities for those with perseverance Perseverance See also Determination. Ainsworth redid dictionary manuscript burnt in fire. [Br. Hist.: Brewer Handbook, 752] Call of the Wild, The dogs trail steadfastly through Alaska’s tundra. [Am. Lit. and fortitude Fortitude See also Bravery. Fratricide (See MURDER.) Asia despite torture, refuses to deny Moses. [Islam: Walsh Classical, 35] Calantha fulfills wifely and queenly duties despite losses. [Br. Lit. ," says Bennie L. Thayer, president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the National Association for the Self-Employed in Washington, D.C. "But those who seek to become self-employed need to ask themselves, `Am I self-motivated? Do I really have what it takes?' Everyone is not cut out to be self-employed." Indeed, going out on your own is a big step. And you must decide for yourself when the time is right to make the leap from employee to entrepreneur (see "Straddling strad·dle v. strad·dled, strad·dling, strad·dles v.tr. 1. a. To stand or sit with a leg on each side of; bestride: straddle a horse. b. Both Worlds," November 1999). Even with today's business-friendly environment, you'll have a greater chance of success if you select the right business. In this article, we'll identify four fast-growing businesses for the self-employed, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Paul and Sarah Edwards Paul and Sarah Edwards are writers and speakers on the field of self-employment. They also operate an institute called the Pine Mountain Institute. Sarah Edwards, who had previously worked for the federal Head Start program, began working at home after being advised by a , authors of The Best Home Businesses for the 21st Century (Tarcher/Putnam, $17.95), and provide strategies for making a profitable transition to going it alone. ASSESS YOUR ENTREPRENEURIAL SKILLS Do you have the skills, abilities and knowledge required for the business you'd like to start? Do you have the ability to nurture NURTURE. The act of taking care of children and educating them: the right to the nurture of children generally belongs to the father till the child shall arrive at the age of fourteen years, and not longer. Till then, he is guardian by nurture. Co. Litt. 38 b. and grow a business? Are you prepared to make sacrifices? Are you self-motivated? Do you like being in charge? Do you have the financial means to start a business? These questions must be answered truthfully before you move into self-employment, suggests Lillie Taylor, director of the Bank of America's Small Business Resource Center in Nashville, Tennessee “Nashville” redirects here. For other uses, see Nashville (disambiguation). Nashville is the capital and the second most populous city of the U.S. state of Tennessee, after Memphis. . A.J. Archibald III, CEO of Hitlist.com in Washington, D.C., applied his technology skills and tapped into one of the fastest growing industries: Internet technology. Archibald's $300,000 online business provides entertainment news and music and videos for consumers. He launched the firm while a student at Howard University Howard University, at Washington, D.C.; coeducational; with federal support. It was founded in 1867 by Gen. Oliver O. Howard of the Freedmen's Bureau, to provide education for newly emancipated slaves. A normal and preparatory department was opened the same year. , and initial work on the business was done part-time while Archibald worked full-time. His mother invested $10,000, which he used for marketing, promotion and computers. "I then left my regular job and began to devote full attention (60 hours per week) to the growth of Hitlist," says Archibald, 28. "In the beginning, I experienced the uncertainty of self-employment. I was waiting for that first check. After it came, I felt assured that other companies would use my services See .NET My Services. to promote their material." 4 HOT BUSINESS SECTORS Personal/Business Services Number of U.S. black-owned firms: 333,000 Total revenues: $11 billion Growth industry: Business consulting Growth factors: The ever-changing economy and increasing global competition, which require problems be solved in an efficient, cost-effective manner. Start-up costs: $6,075 to $12,900: computer hardware and software, dues for professional and trade associations, professional liability insurance, professional development seminars, reference books, continuing education continuing education: see adult education. continuing education or adult education Any form of learning provided for adults. In the U.S. the University of Wisconsin was the first academic institution to offer such programs (1904). , marketing. Qualifications: A track record of using expertise to solve problems in organizations; extensive knowledge in a particular area of expertise; strong communication skills. Advantages: Receipt of maximum pay for your expertise in a profession that offers variety and challenge. Challenges: To market your services successfully, you must demonstrate to clients that they're going to see tangible results because of your work. You may be held accountable for the success or failure of a company, even if the stock market or a bad product limit your effectiveness. Frequent travel for long periods of time is part of the job, and it can be exhausting and expensive. Cash flow may be a problem since it can take a long time to close a deal. There's a high failure rate because many people are looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. that next job. RETAIL Number of U.S. black-owned firms: 86,840 Total revenues: $7 billion Growth industry: Internet retailer Growth factors: Ability to reach customers globally at low cost; consumers have less time to shop; consumers seek convenient options for purchasing goods. Start-up costs: $500 to $1,000: computer hardware and software, a digital camera, initial testing, marketing. (A site with full e-commerce capabilities: $5,000 to $39,000.) Qualifications: Online market research skills; proficiency pro·fi·cien·cy n. pl. pro·fi·cien·cies The state or quality of being proficient; competence. Noun 1. proficiency - the quality of having great facility and competence in maintaining a Website; skill in choosing, marketing, processing and shipping products. Advantages: In 1997, small businesses garnered about $3.5 billion in e-commerce sales; future sales are predicted to reach $25 billion to $300 billion within this decade. Low sales costs; low overhead; 24-hour accessibility; no fixed hours, so a mail-order business can be started part-time while you're still employed; you can compete against a company 10 times larger. Challenges: Attracting the right customers to purchase the right products at the right price, which requires products that are unique or obscure; 24-hour accessibility. COMMUNICATIONS, PUBLIC UTILITIES, TRANSPORTATION Number of U.S. black-owned firms: 49,000 Total revenues: $2.5 billion Growth industry: Webmaster/Website designer Growth factors: E-mail, Websites and e-commerce are major factors in companies keeping their competitive edge. Web design is a highly specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. field that requires skills and tools most firms don't have in order to create highly effective Websites. Start-up costs: $3,850 to $18,450: computer hardware, secondary computer with a different operating platform from the first (to view Websites), color scanner, access to Internet, books, marketing. Qualifications: Background in graphic design; ability to meet clients' objectives and create effective Websites; knowledge of programming languages, Web tools, the Internet; good communication, project management, organizational, marketing and promotional skills. Advantages: No geographic barriers to entry; emerging industry; ability to help firms reach global clients/customers; industry encourages collaboration among professionals. Challenges: Need client relations and management skills; must keep pace with technological advances; labor-intensive; technology makes results unpredictable. FINANCE/INSURANCE/ REAL ESTATE Number of U.S. black-owned firms: 41,000 Total revenues: $4 billion Growth industry: Financial planner/advisor Growth factors: Shift in retirement funding from defined benefits (pension plans) to defined contributions (401(k) plans), which gives employees more autonomy in making investment choices; changing tax laws; aging population; mounting consumer debt. Start-up costs: $5,150 to $21,800: computer hardware and software, credentials CREDENTIALS, international law. The instruments which authorize and establish a public minister in his character with the state or prince to whom they are addressed. If the state or prince receive the minister, he can be received only in the quality attributed to him in his credentials. , annual dues, licensing fees, office furnishings furnishings the extra type or quantity of hair on the head, tail, ears or legs, specified for a particular breed. For example, the feathers in setters, the beard in Bearded collies, the eyebrows in Schnauzers. , insurance, marketing. Qualifications: Client relations and communication skills, technical expertise, trustworthiness trustworthiness Ethics A principle in which a person both deserves the trust of others and does not violate that trust . Advantages: Ability to transfer skills from other professions; lucrative income; moderate overhead. Challenges: Keeping pace with new/changing information; ability to anticipate trends; potential liability for financial losses. MAKING THE TRANSITION TO SELF-EMPLOYMENT Are you ready to take the plunge? Don't dive in just yet. First, you should consider the joys and challenges of self-employment. High on the list of positives are: being your own boss, the opportunity to maximize your income, the thrill of nurturing your venture into a viable business entity and self-fulfillment. The challenges: Lack of a regular paycheck, the possibility of failure, working in isolation, the difficulty of attaining capital and the burden of governmental paperwork and regulations. If you're still undaunted, these decisions are critical before setting up shop: * Choose the right location. The location of your fledgling business is a key factor in controlling costs, according to Rudy Lewis, president of the National Association of Home-Based Businesses in Owings Mills, Maryland Owings Mills is an unincorporated community and a census-designated place in Baltimore County, Maryland, United States. The population was 20,193 at the 2000 census. Owings Mills is home to the northern terminus for the Baltimore Metro Subway and to Owings Mills Mall. . "In addition to low overhead, [self-employed people who work from home] also enjoy the benefits of no time spent commuting, greater flexibility and they can set their own hours," says Lewis. Recent U.S. Census Bureau data indicate that 58% of black-owned businesses with no employees operate from home. "I don't have the overhead of a store, so I can cut prices 30% to 40%," says craftswoman crafts·wom·an n. A woman who practices a craft with great skill. Cain. Another option: executive centers with shared or co-op office spaces where you can meet clients and have access to services. Generally, fees range from $125 to $250 per month, although conference rooms can run from $10 to $25 per hour. But if you must operate a retail business from a storefront location, thoroughly investigate the neighborhood, parking, proximity of competitors and accessibility before renting or making a purchase, says Bernard B. Kamoroff, author of Small Time Operator (Bell Springs Publishing, $16.95). * Determine your capital needs. How much money you will need to launch your venture depends on the type of business you are starting. Identifying how much you need to earn in order to thrive and checking out your competitors' prices can help you determine what to charge and how many clients are necessary each month to reach your income goals. Identify your start-up expenses and how long you'll need to supplement your income before your business can support you. Tompkins saved up $25,000 to start his business, in part because he had figured out what his business purchases, bills and personal expenses would be once he left his job. "I had to figure out how to fill the gaps until I got paid. I laid out a financial plan and decided that I needed month-to-month retainers to manage," says Tompkins. Keep in mind that a business can take anywhere from three months to over a year to turn a profit. Have a plan for how you will cover your living and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. during that period. Taylor also recommends checking your credit report. If your credit is a mess, consult a credit counselor to discuss strategies for paying off excess debt prior to leaving your salaried position. * Identify financing sources. Common self-financed sources of funds include credit cards, 401(k) plans, savings and stock. Most business loans (debt-financing) are personal loans in that you, as the owner of the business, personally guarantee the loan, and you must repay the loan whether your business succeeds or not, out of your personal, nonbusiness non·busi·ness adj. 1. Unrelated to business or industry. 2. Unrelated to one's own business or employment. assets. This differs from equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. , where you acquire a partner or an investor who only gets paid back if the business succeeds. Most loans to new businesses come from relatives, friends and acquaintances. Private loans should be in writing and should include the names and addresses of the lender, borrower, the amount, date of the loan, interest rate and payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. terms. All parties should sign and date their copies. To successfully secure a bank loan, you must convince the bank that your business has a good potential for success, that you're competent and reliable and have a good plan to repay the loan, says Kamoroff. When you meet a banker, come prepared with your resume, business plan, a personal finance statement and a statement projecting income and expenses for the first six months or year. You'll also probably need collateral, such as a mortgage on equipment or a second mortgage on your home for a secured loan. If you've done business with or obtained a loan from a particular bank, start there. Other options include SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government loan programs (800-U-ASK-SBA or www.sba.gov). * Manage your cash flow. Cash flow will determine whether your business succeeds or fails. Making sure you collect what you are owed is like making sure you get your paycheck. Make sure you get money upfront: take deposits, get retainers and require partial or progress payments. Request payment in cash at the time of sale or delivery of your service. Take bank cards instead of extending credit. Always bill promptly instead of waiting until the end of the month. Also, offer discounts of 2% to 5% if payment is made within 10 days from the date of the invoice. Set up a reliable bookkeeping and accounting system to: keep tabs on how your business is doing from the start; enable you to take advantage of tax deductions Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. ; and protect you should you be audited. * Structure your marketing plan. Formulate a plan that defines exactly who your customers or clients are; identifies who your competition is; clarifies what advantages you have over your competition in terms of price, service, quality, variety and ease of use; determines how big your market is and if there are enough buyers for you to reach the level of income you need, and identifies how you'll inform clients or customers about what you offer. * Create a business plan. Once you've researched your market, estimated your start-up expenses and strategized a plan for managing cash flow, you have the essential elements of a business plan. It should provide you (and potential investors or creditors) with your business idea; your background; experience; contacts; where you plan to locate; how you'll obtain or manufacture inventory; how you'll find and keep customers; financial forecasts of income and expenses; profit or loss and cash flow; the status of your competition; how much money you'll need to start and what the money will be used for; how much time and money you plan to commit to the business; how much you'll pay yourself; and how you'll repay a loan or investment. After your business plan is complete, it's time It's Time was a successful political campaign run by the Australian Labor Party (ALP) under Gough Whitlam at the 1972 election in Australia. Campaigning on the perceived need for change after 23 years of conservative (Liberal Party of Australia) government, Labor put forward a to put it to work. This is your blueprint for operating your business. So, get busy! You are now ready to join the ranks of the self-employed. Support Sources for the Self-Employed Minority Business Development Agency 202-482-5061 www.mbda.gov National Business Incubation Association 740-593-4331 www.nbia.com U.S. Small Business Administration and SBDCs 202-205-6600 www.sbaonline.sba.gov National Association for the Self-Employed 800-232-6273 www.nase.org National Federation of Independent Business 615-872-5800 www.nfibonline.con Working Solo Inc. 14-255-7165 www.workingsolo.com National Association of Home-Based Businesses 410-363-3698 www.usahomebusiness.com SCORE 800-634-0245 www.score.org American Association of Minority Business 704-376-2262 www.website.com/aamb |
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