The Juicy Bits of Part 1 of ‘Become Your Own Boss in 12 Months’

Chapter 1: So You Think You Want to Be An Entrepreneur…

5 Questions You Should Ask Yourself: How much does it cost to make your product or deliver your service, How much do you sell the product for? Can your business be easily copied? Does your marketing and braning make sense? Can you sell yourself?

You might be an entrepreneur if: You like being in charge, your boss is clueless, you feel underused and dissatisfied with your job, you know what you would do differently, you think it would make more sense to work for yourself, and you’re convinced that you could do better jobs than the ones above you.

Some lifestyle considerations: What kind of lifestyle do you want? How big do you want your firm to get in terms of profit and staff? Will you have employees? How many hours a week of work? Do you need to take any consistent time off during the week? Will you work seven days a week? For how long? Will you need a partner? Could you work with one? How will you fund your household while you build your business? Can you work from home?

Your business idea: Who is your niche customer? What are you solving? How much competition is there? Does your business solve an unmet need? What is your unique value prop? Products, services, or both? Are you selling wholesale, retail, e-commerce, private label? Will it be online or brick and mortar? Will you need a manufacturing partner?

You should know your business – work for a business like the one you want to start before starting your own. You should also love doing the work. People can tell whether you love doing something, and it’s the only thing keeping you going sometimes.

Honestly assess your people skills. Communication is key. What level of communication is required for something? Make sure to end interactions by recapping deliverables and action items. Follow up in writing.

Your business needs to start from a position of financial security, otherwise it’s hard to get going. To succeed in business, you should have measurable goals, and a corresponding budget. No one will loan you money if you don’t have realistic financial projections.

Make sure your spouse is onboard, otherwise nightmare ensues. You must also have faith in success.

Chapter 2: Why Does It Take Twelve Months

Ask yourself if you have: 750 + credit, zero debt, twelve months salary, monthly budget, first year operating expenses.

Make sure that you have the requisite finances to be able to succeed.

Chapter 3: Get Your Life Plan Together

Identify what you want out of life before making a business. It’s good to get to your core motivations: Why am I starting this business? Do I have the energy and discipline? How much money to be happy?

Make decisions on factual financial data, and not emotion. Let facts and budget drive business decisions.

Are you motivated by: Control, freedom, money, problem solving, creativity? If so, you’re likely entrepreneurial. Ask yourself how this manifests in each of those areas… what type of flexibility? How much money? Rate how much each attribute matters to you so you have a better idea of what to prioritize.

Some life plan info: What is your passion? Does any industry fit your passion? What do you know how to do? What are you the bees knees in? What saleable bees knees attributes do you have? What do you hate to do? Do you get bored easily? What’s your energy level? Which technical skills do you have?

Write down your best day 5 years from now. This will be used as a vision board, so be specific. This will help you get through trials and tribulations.

Think about your ideal work setting- does it need to be around people? Can you work at home? Are flex hours important? This can help you understand whether your personal and business goals are compatible.

4 ways to be an entrepreneur: Start a service business from scratch, buy an existing business, buy a franchise, create an e-commerce business.

Other things to consider: Strongest skills, are you highly self-disciplined, what do you know you can sell? Which services can you provide?

Chapter 4: Construct a Financial Plan

Don’t have debt when going into entrepreneurship. There are 3 ways to get out of debt. Snowball: pay down the smallest debts first, and then go to larger debts. Avalanche: Order debt from highest to lowest interest rates, and focus on the highest interest rates first. Snowflake: Add unexpected extra cash to help pay off debt.

Use budget software to track your spending, anticipate future expenses, and have an accountability partner who can ask you about shopping sprees.

Making a budget: Write down net income after taxes and deductions, list all major expense categories, total all expenses, subtract total expenses from income, if a deficit appears, determine how to address it. Running a household helps you run a business.

Make sure your finances are structured correctly. Get your credit report, calculate net worth, and pay bills on time.

A big part of controlling spending is keeping good records. Before going to store, make a list of what you need and stick to it. Eliminate all unnecessary subscriptions, cut back on expensive snacks, avoid retail therapy, review insurance policies, bring leftovers to work for lunch and cook at home, park and ride public transportation, user the library, staycations can save money, Ask yourself why 3 times before any purchase… you should have at least 3 reasons.

Are there any investments you can liquidate? What’s your home equity? Does your employer owe you money? When you get bonus, put 1/3 into something you need, 1/3 into paying down debt, and a third into saving.

When deciding on a bank, shop around, get referrals, and interview at least 3 branch managers. Questions to ask: how fast do checks clear? Is there a small business banker on staff? Are loan decisions local? How many Small Business Admin loans did your firm process last year? Also, make sure to meet with the bank at least 1-2 times a year to give updates, as it keeps them engaged in your success.

Chapter 5: Think Like a Business Owner

Business vision must be realistic. You need to understand it in context of core services, unique value proposition, year-to-year revenue, profit growth, and how big you want the company to be long term.

When you succeed, you attract mentors by being approachable and responsive.

Seven principles of success: Entrepreneurial mindset, strict fiscal discipline, good advisors to support you, defined brand identity + professional marketing, niche target market, excellent customer service, and carefully managed banking.

Stand out in a crowd, keep a positive attitude, don’t be overcome with failure, and move on quickly.

More than 50% of business problems are personal problems. Hire smart people and empower them to make decisions.

Some motivation strategies: Develop a daily routine, get up at the same time, exercise, and shower before work, convert one room into an office, avoid keeping a bed there, schedule breakfast meetings to get yourself going, when you feel low energy, take a dance break or a 30 minute exercise break, avoid procrastination, perform follow-ups immediately, find accountability partner.

Find a secondary workplace, schedule time, and make action list to drive work activities for next day. Planning helps save time in the long run, especially if tasks are broken up. Protect work hours, and get a wireless headset.

Pace yourself, and accept that success doesn’t necessarily come quickly. You should be a lifelong learner, and strive for completion rather than perfection. SMART goals are good

Chapter 6: Create a Business Model

Determine whether you have a viable business model to make money. Is there a need for my business? Who competes with me? What can I offer? How hard is it to get my product to market and build a moat? Is my product easy to understand and at a competitive price point?

Formal primary research is expensive, it may make more sense to look at SBA’s Office of Entrepreneurship Education, US Census Data Tools, Statista, Pew Research Center, Google Trends, and the International Trade Administration.

If a new business owner thinks they don’t have competition, it means that there isn’t a market, a monopoly controls the market so overwhelmingly, or the product doesn’t exist.

Roughly 70 percent of new products can be duplicated in a year, and 60-90 percent of process improvements will eventually be duplicated by competitors.

If selling something new or disruptive, marketing should take a couple years educating on what you’re doing.

Wrong prices will make a bad impression, so you might want to be the most, rather than the least expensive option in the market.

Capitalizing on a fad is tricky business. If you want to start a fad business, you must make sure to enter it quickly and be able to cash out before market moves… You should also learn what long-term growth opportunities exist to improve product line, or to change it.

When choosing a name: avoid names hard to pronounce or spell, do not create new words, do not use a word that’s too common that it’s forgettable, avoid purposefully misspelled words, do an online search of your business name, do not use name of your town, once in business, feel free to change names.

Once you pay to incorporate, you get a corporate kit which includes articles of incorporation, bylaws, your first meeting minutes, any stock certificates issued, and your corporate sealed. Store this stuff in a safe place.

Sole proprietorship is not a legal entity, you are personally responsible for everything including debts and lawsuits.

Partnership is when two or more people come together to own and operate a business, and each partner is personally liable for business debt. If you have a partnership, be sure to have a legal partnership agreement.

Limited Liability Company: This limits the liabilities of the business to the investment by each partner. No personal assets are at risk, and combine the limited personal liability feature of a corporation with tax advantages of as ole proprietorship. LLCs do not offer stock.

Subchapter S Corporations provide limited liability and significant tax benefits for its owners. Profits are only reported on the personal tax return. If there is a profit, they must pay themself wages, similar to what you’d pay someone else to do your job. IRS can reclassify all of earnings and profit as wages, and you will be liable for all the payroll taxes on the total amount. S corps have a lot of paperwork.

Corporation: A legal business entity that is separate from owners. It can be privately or publicly held- can be taxed, sued, enter into contractual agreements. Owners are its shareholders who elect board of directors to oversee major policies and decisions. Does not dissolve when ownership changes.

Chapter 7: Line Up A Lawyer And An Accountant

Lawyer should draft contracts for customers to engage services, employee contracts, and non-compete and ndas that employees and strategic partners should sign.

Make sure to check out the state bar to see if attorney has ever been reprimanded or involved in illegal activity. Some questions to ask to a lawyer: Do you need a large retainer? What is your fee schedule for routine and nonroutine services? Will you provide itemized bills? What is your typical response time? What is the best way to reach you? Can you give me an example of how you’ve helped clients secure business opportunities? Can you provide me some small business references?

How to hire accounting: A bookkeeper will set up your accounting software and enter receipts and invoices into your software, handle payroll data, create financial statements. An accountant can do that, and prepare business taxes. They are also often better trained. A CPA can certify an audit, but are expensive. For a small business, a smaller accounting firm is likely the better choice because costs are lower and service is better. Some questions: What software do you use? What is your hourly rate? Can you provide references? Do you work onsite? Do you prepare business taxes?

Sales taxes: Manufacturing Sales are Tax Exempt, Casual Sales are Tax-Exempt (happen 2X a year or less), Computers may be tax exempt. Internet Entrepreneurs pay sales tax too, some services may be tax exempt