Advertising and publishing veteran Janelle Regotti was looking for a business to buy. The right opportunity presented itself in 2014 when she found Guide Publishing, a company that distributed a quarterly resource guide for Northeast Ohio seniors. The only catch: Regotti didn’t have the $500,000 asking price.
With few physical assets to borrow against, she was unlikely to get a bank loan. So with the help of her business broker, she negotiated a seller-financing deal and bought the business five months later with just 10 percent down and quarterly payments due over 10 years at about 6 percent interest.
Of course, most sellers won’t finance 90 percent of their asking price. But borrowing 10, 20 or even 30 percent from a seller at a competitive rate still beats using your credit card to cover capital shortfalls. If you’re interested in seller financing, here’s what you need to know.
When it makes sense
Being short on cash isn’t the only reason to push for seller financing. These loans can also bridge the gap if you and the owner can’t agree on a price.
Renzo Aida, who bought a dance studio near Boston in 2013, will attest to that. He had the money to pay the six-figure asking price in full, but he thought the seller wanted 20 percent too much.
“I wanted him to put his money where his mouth was,” Aida says. Both parties went into negotiations and eventually got what they wanted. Aida has since increased revenue by 28 percent.
What sellers expect
Besides cashing out, sellers want assurances their baby will be in good hands. They want a buyer who has experience in the industry, a solid business plan, working capital and roots in the community, says William White, regional developer of Murphy Business & Financial Corporation, a national business brokerage firm. Sellers treat these loans as seriously as any bank would, says White, who lives in Hudson, Ohio. This means requiring a credit check, collateral (business assets and possibly your home) and life insurance. Loan terms often extend up to 10 years, interest rates are comparable with those offered by banks and it’s typical for sellers to stick around for 60 to 90 days post-sale to advise the buyers.
How to vet the deal
It’s not enough to grill the owner on the intricacies of their business. You have to scour the financials, from bank statements and cash flow to tax returns and profit-and-loss (P&L) reports. You also have to inspect the physical property to ensure all inventory, equipment and other assets are accounted for and in working order. “Otherwise, you don’t know what you’re getting,” Regotti warns.
Trusting the seller is imperative. “Make sure it’s someone you actually want to be in business with after the sale is complete,” says Regotti, who negotiated a six-month transition period during which the seller played consultant. Another must: having a business attorney in your corner, even if you’re working with a broker. Regotti adds, “I had my attorney look over everything.”
What to negotiate
Owners may not openly advertise their willingness to partially finance a sale — but, according to White, it’s common for them to consider lending at least 5 to 15 percent of the purchase price.
KC Truby of Tucson, Arizona, who has bought six owner-financed businesses over the past five decades, suggests agreeing to the asking price but getting creative on the terms. Regotti, for example, nabbed 90 percent seller financing by promising to apply for an SBA loan two years down the line. If she gets it, she’ll pay off the seller in full. Other buyers can bridge valuation disagreements with an earn-out clause that grants the seller extra pay during a set period if profits meet or surpass expectations.
“You can dream up 100 different ways to do this,” Truby explains. “It really boils down to what the owner wants to accomplish.”
The advantages of seller financing for startups
Bill Short wasn’t worried about how he’d finance FiberTech, the Atlanta-area fiber optics company he wanted to purchase. The former banking professional had stellar credit and enough money to make a sizable down payment on the business, which was priced in the “low seven figures.”
The rest, he imagined, he’d borrow. But when Short applied for an SBA loan, he was told the government body required at least 10 percent of the deal to be financed by the seller. Although Short hadn’t considered taking a loan from the seller, he was happy to comply if the terms were right.
“Seller financing helps get the deal done,” says Kent Reed of Murphy Business & Financial Corporation, the brokerage firm that worked with Short. “It helps the buyer with less out of pocket. And it gives them more confidence in the deal if the seller’s got some skin in the game.”
Short wound up making a 40 percent down payment on FiberTech, borrowing an additional 50 percent through an SBA loan, and borrowing the remaining 10 percent from the seller. “It helped me to not have to put in that additional 10 percent,” Short says. With the extra cash, he was able to boost the company’s marketing efforts, invest in vehicles and equipment and ramp up staff from 14 people to 20. Since purchasing FiberTech in March 2011, Short has seen revenue increase by about 20 percent.
Are your team-building go-tos stale? Likely. Freshen up with these action-packed adventures.
Degree of difficulty: Degree of difficulty
After camera company Lytro restructured, employees needed some bonding time. The Mountain View, Calif.-based team headed to the Kitchen Challenge at Parties That Cook, a competition inspired by Iron Chef and Chopped. “It really played to so many different types of personalities,” says Lytro HR manager Jenny Garcia. After judging, teammates feasted on their meals over wine. “It was one of the most popular things we’ve ever done.”
Degree of difficulty: Degree of difficulty
Escape rooms — those self-contained scavenger hunts in which puzzles are solved in order for participants to break free — are good for more than just birthday parties: They’re also a way for colleagues with diverse skill sets to collaborate. “Our brains all work in different ways,” says research scientist Amanda Weidner, who took her team of faculty and staff from the University of Washington to Seattle’s Puzzle Break. “Even if you weren’t the puzzle solver, you still had a role and felt like you contributed.”
Survivor: Corporate Edition
Degree of difficulty: Degree of difficulty
Patrón took employees to Las Vegas’ Camp Rhino for an obstacle course, putting staffers through a gauntlet of challenges such as hanging rings, climbing walls and tire rolls. The intensity has its advantages: “If somebody couldn’t do the monkey bars, another team member would hold their legs and help them,” says Melissa Aupperle, VP of operations for Destinations By Design, who organized the activity for Patrón. “It was more strategizing how to get everyone through as opposed to finding their strongest players.”
Freelancers and contractor writers operate as independent entrepreneurs, but that arrangement doesn’t have to mean creating entirely in a vacuum. Gathering with other freelancers in a coworking environment can benefit professionals as well as their products. Coworking provides opportunities to observe and learn from colleagues who value their autonomy and often share other values, too.
From this perspective, it’s natural that freelancers would appreciate the synergy of a place where numerous, talented people converge in a similar space. The technology age has made it easier than ever for contractors to bring their tools with them. This enables them to work with other like-minded individuals from virtually anywhere.
If you’re thinking about moving your one-person shop to a coworking atmosphere, consider how these perks could infuse you with new ideas and elevate your current projects.
1. Networking and collaborating.
Coworking allows you the opportunity to network and collaborate with a wide range of bright minds. You might even make new friends in the process. Proximity gives you the chance to “pick the brains” of professionals in your own line of work as well as those in related fields. Freelance writers might choose to office with graphic designers, website designers, programmers and other writers whose work and insights help shape new perspectives.
2. Using tools on the go.
Many phone and web apps, software programs and other tools were designed to be especially beneficial outside of the office. Pare down to the absolute necessities while you’re on the go. Meebo can handle your chatting needs, Line2 is a helpful alternative for a land-line phone system and DropBox assures you’ll always have the files you need at your fingertips. The right tools can make all the difference in your ability to cowork successfully.
If the need arises to organize tasks among coworkers on a big project, freelance writer Christopher Jan Benitez recommends Asana or Trello. These online project-management apps enable remote team members to delegate and assign deadlines. Here are a few others to consider.
Cyfe. The business-management dashboard connects multiple apps to monitor stats and updates from a single dashboard. You can iframe Google spreadsheets, connect to email and integrate your social-media statistics.
Zoom.Us. This phone and web conference app allows you to chat with anyone and host group meetings for up to 25 people via your smartphone.
Evernote. Bloggers love this versatile tool in part for its “snip” feature. Save videos, web pages, social-media posts, articles and images — and then write your entire blog post within the app itself.
MyBlogU. I founded this collaboration platform to connect writers and editors so they could create better content for business websites.
Google Docs, Sheets, Slides and Forms. This free product suite supports collaboration by allowing multiple users to create, revise and edit documents, spreadsheets, presentations and fillable forms online. Coworkers can track versions and collect feedback.
Iflexion. This enhanced document-management platform is built for those who coordinate larger teams or manage several remote offices. The solution offers custom enterprise content-management solutions.
3. Breaking out of your comfort zone.
Working across the desk from someone with a completely different skill set can help you discover a new source of ideas. You might find your brain is starting to work in different ways, too. As online-marketing consultant Joyce Anderson puts it, taking the risk to invite others to work alongside you breathes new life into the creation process and shows in the finished product, as well.
Experienced writers who reread some of their early compositions are likely to notice mistakes or passages they would have rephrased. If that’s ever happened to you, imagine how polished and clear your work could have been if only you’d had access to your current knowledge, finesse and expertise when you first started. When you break out of your comfort zone, you’re giving yourself a chance to devise fresh solutions to existing problems. Interacting with coworkers facilities this kind of breakthrough.
Many writers are natural introverts. If you’re nervous about joining a coworking group, challenge yourself to step into the unknown. Much of what you fear is fear itself. You needn’t commit to attend every meet-up. Start small, with a gathering like Shut Up and Write. This coworking group’s main focus is providing a forum to write. Participants spend two hours together, typing blog posts or working on novel chapters. At the start of the time block and again toward its end, writers have a brief while to socialize — not more than 10 or 15 minutes, total. It’s the ideal opportunity for attendees to exercise their small-talk and networking skills.
4. Working at your own pace.
Coworking makes it possible for you to create some space between you and your clients — just enough to redirect energy to your own projects and move at your own pace. Stop devoting hours to the same interruptions and distractions that normally plague your days. Why not work in a new environment, surrounded by new people and new stimuli? Coworking can be a respite from day-to-day workplace worries about strict deadlines or clients trying to reach you at your primary location.
5. Making full use of your coworking space.
This is an ideal time to be a freelancer or solopreneur. Coworking spaces allow a startup to maintain an address for receiving packages and mail. You can rent small suites to meet with clients or find a calm room to call clients from a no-kid zone.
Sara Duggan, who coworks at HackerLab, notes her maker space supports startups by hosting an annual competition. Candidates pitch their business ideas in hopes of being selected to attend and eight-week entrepreneur boot camp.
The Sacramento Bloggers group brings in speakers to help members become at what they do. Recent topics include secrets to help separate personal and business Facebook accounts. Those who take part often get the opportunity to work with local businesses.
6. Avoiding loneliness.
Working at home can have an isolating effect after a period of time. Coworking is an easy fix. Working amidst others can lend a sense of camaraderie, even when you’re creating alongside complete strangers.
What do you know about web hosting? If you’re the normal non-tech-company small business owner, probably not much. And you shouldn’t. Your job is to run your business—not be an expert in how web servers work.
But at some point, the decision will be in front of you. You will decide where your website will live—and it’s a bigger decision than you think.
Let’s break it down into the simplest terms. You live in some sort of home—an actual house, an apartment, a condo, or maybe one of those new trendy tiny houses. Your life would likely be very difficult without a home. Same with businesses. Can you imagine a grocery store without a physical location? That would be chaos!
Your website works the same way. To work, it has to be housed somewhere. A web host places your site on their web servers. Without a web server, your site wouldn’t make it to the internet. It would go no further than your computer.
Unless you own your own server, (you probably wouldn’t be reading this article if you did) you have to rent space on somebody’s else’s servers. But how do you know who to use and what you need?
1. Don’t Use Your Web Person
Sorry if we make any web designers mad but putting your site on somebody’s private server is usually a bad idea. What if you later have to fire your web person? Think of how awkward it will be to fire them and then ask them to be part of moving your site to another host?
Or even worse, what if they’re mad and try to charge you and outlandish fee to move the site? You ALWAYS want your website on neutral ground. You should retain total control of your web host. If you have to fire the person, you simply remove their access to the host.
2. Use a Big Company
Small business owners understand the difficulty of growing a business but web hosting is best kept with large companies. Large companies offer 24/7 tech support, guard against cyberattacks, purchase the newest technology, and generally offer the most reliable service at the best cost.
Smaller companies will be more friendly to talk to on the phone or through chat but they don’t have the resources to offer the technology services of larger web hosting companies.
3. Use a Managed Server
Don’t let the term intimidate you. Think of it like this: If you know very little about something, do you want somebody who knows more than you as your manager? Of course you do. That’s what a managed server is—a server with an automated and human management team keeping it running for you. Management services might include automatic backups, virus scanning, software updates, server health monitoring, and more.
With an unmanaged server, the only management you get is a guarantee that the server will work. You even have to install all of your own server software in most cases. Do you know how to install things like Apache, Ubuntu, MySQL, and other super techie things like that? If not, you want a managed server.
Who would use an unmanaged server? Anybody who has somebody on staff or hired as a contractor to manage the entire web presence including the server. Unmanaged servers are often better-performing servers at a fraction of the cost—sometimes 1/5 the cost of a managed server. If you have somebody you’re already paying monthly, they might recommend an unmanaged server.
4. Know Your Choices
When signing up for managed web hosting, there are 3 basic types: shared hosting, VPS hosting, and dedicated hosting.
Think of shared hosting like an apartment complex. A whole lot of people share the same building. In this case, your website runs on a server with a bunch of other people’s websites. You might only pay a couple dollars per month for shared hosting but it can sometimes run slower than you would like. If you have a super-simple site that doesn’t have any high-end programming running along with it, shared hosting is probably fine for you.
VPS, or virtual private serving hosting, gives you control over how the server is configured. You have your own space but you’re still sharing the server with other people—although far less people than with shared hosting. It’s often faster but also more expensive. Plan to pay between $25 and $50 per month.
Dedicated servers are like living in a home. It’s all yours. Nobody else shares it. That comes with a lot of advantages but it’s more expensive. Plan to pay $80 per month on up. And you’ll need your own tech person managing the server for you.
Unmanaged hosting doesn’t come with all of these options. If you’re considering managed hosting, talk to your tech person.
As a general rule, very small businesses are fine with shared hosting. If you run an e-commerce site or have more advanced needs, move to VPS hosting. When you need dedicated hosting, your hired team of tech people will let you know. You may never need dedicated hosting.
5. Consider Managed WordPress Hosting
If you’re the do-it-yourself kind of person, you might have considered building your own website. This is entirely possible with wix, Squarespace, and some other builders. If you want to be slightly more techie, you might have looked at WordPress, the most popular website software in the world. Because of its popularity, some webhosts now offered managed WordPress hosting plans.
These plans completely manage WordPress for you including software updates, daily backups, security, and speed. Speed is of particular importance because WordPress sites tend to run slowly without some tweaks from a tech person.
The downside to Managed WordPress hosting is that it’s going to cost around $30 per month but site speed is become an increasingly important consideration so the cost could be worth it.
Your web designer might recommend it if they aren’t hired to maintain the site.
Overall, it’s more expensive but if you rely on your website as an important part of your business, it’s probably worth the cost.
Venture capital may be the hot, sexy funding route that helps a few businesses and grabs a lot of headlines every year. But it turns out another type of funding works out better for most entrepreneurs: microfinance. Microfinance loans are small loans typically in the range of up to $50,000 in the United States, with an average loan amount between $9,000 and $10,000.
Non-bank lenders such as Accion USA provide loans that average just $7,000. Here’s the funny part: The businesses they lend to have a survival rate that’s twice the national average. Repayment rates are on par with traditional banks, too.
Why do micro-borrowers do better than owners who use traditional bank loans or credit cards? Here are three reasons:
1. Better vetting. Microlenders tend to spend more time getting to know a business owner one-on-one, which usually doesn’t happen at major banks. These microlending institutions often take bigger risks on unproven startups, but because they take the time to learn a lot about the person seeking the loan, they form a more personal connection. With those closer ties having been forged, entrepreneurs will go the extra mile to avoid disappointing the person who approved their loan.
2. Support groups. Most microloans are made in a group setting. The business owners in a lending circle support one another and, in some cases, are financially responsible for each other’s loans. This web of interconnected responsibility helps keep them on track and provides moral support.
3. Smaller loans. When entrepreneurs only have a small sum with which to start their businesses, they watch every dime carefully. Too often, landing a big loan can lead to profligate spending rather than growth and productivity. Small borrowers also don’t get delusions of global domination — they take it one careful step at a time, so they don’t stumble into overexpansion.
Inside PayPal’s microlending program
As the owner of Crisloid, a maker of high-end backgammon, checkers and cribbage sets, Jeff Caruso knows that if he buys more raw materials in late summer, he can make more money during the holidays. The problem is coming up with the extra cash. That’s why he borrows from PayPal, which began issuing single, fixed-fee loans of $1,000 to $20,000 to qualifying customers in 2013 through its Working Capital program. (The cap was raised to $60,000 in 2014 and was $97,000 as of this writing.)
Caruso has taken out three business loans through PayPal’s microlending program, borrowing $10,000 to $15,000 a pop — $35,000 in all. He uses the money to meet his Providence, Rhode Island-based company’s fourth-quarter spike in demand, which helped revenue exceed $500,000 in 2014 for the first time.
“Come August, if I can take $12,000 and turn that into finished goods, it’s all going to sell,” Caruso says. “It helps us finish the year that much stronger.”
Since launching the Working Capital program, PayPal has paid out more than $1 billion, granting loans to over 60,000 U.S. small businesses. In 2014, PayPal expanded the program to the U.K. and Australia.
More than half the borrowers use PayPal loans to buy inventory, says Darrell Esch, the company’s vice president and general manager of PayPal’s SMB lending. Other popular uses for the money include temporary hires, warehouse expansion and website overhauls. Esch adds, “It really helps merchants grow.”
How it works
PayPal lends approved borrowers up to 18 percent of their annual sales made through the platform (with a $97,000 limit), the equivalent of one month’s processing volume, according to Esch. There’s no due date on the loan; instead, PayPal automatically draws payments from a borrower’s account when a sale is made, until the loan is repaid. (Borrowers get a reprieve on days with no sales.)
Borrowers can elect to designate from 10 to 30 percent of their daily sales as repayment; Caruso, for example, chose to repay 15 percent of daily sales and has paid off each of his loans in three to five months. Borrowers can make extra payments or pay a loan off early at no additional charge.
“Once the loan is paid in full, you can come back and apply again,” Esch says, noting that about 80 percent of people who close loans take out another one.
PayPal loans run from 2 to 11 percent APR of the money borrowed. The higher the percentage of each day’s sales that goes to repayment, the lower the loan cost. If PayPal tries to retrieve a payment after a sale but the account balance is insufficient (presumably because you moved the money elsewhere), the platform will withdraw the necessary funds the next day, Esch says. There’s no charge for these “catch-up” payments.
Loan applicants must have at least $20,000 in sales through PayPal during the previous 12 months and at least 90 days of processing history on the platform. “It doesn’t take long to build it up,” Caruso says. (Esch points out that PayPal doesn’t prohibit borrowers from using other transaction platforms.) PayPal also checks applicants’ identity and credit history.
Just be sure you don’t get in over your head. Caruso suggests initially borrowing less than you’re approved for and repaying at a lower percentage. “Start small,” he advises. “Make sure you know your margins. Plan what you can handle for a repayment so you don’t choke yourself.”
Startups offer microloan options for entrepreneurs
Microloans actually started as a solution for impoverished borrowers in underdeveloped countries. These borrowers typically lacked collateral, steady employment and a verifiable credit history, making them difficult candidates for traditional financing options. Microloans have been successful in helping to support entrepreneurship and encourage economic growth in these developing nations.
In more recent years, microlenders have been establishing themselves all across the United States. Some microlenders are finding creative ways to improve and streamline this already simple process by offering unique services.
For instance, TrustLeaf.com extends microloans through crowdsourcing. What makes TrustLeaf.com unique is that business owners only borrow from friends and family. Their campaigns aren’t publicly available, protecting the borrower’s privacy.
Borrowers simply set up a campaign on TrustLeaf’s site, providing all the necessary information about their business and select the loan terms. Potential borrowers can pick from a few lending options with different interest rates, minimum amount due and various repayment terms. The borrower and the lender come to an agreement about which loan terms make the most sense for both parties.
Once the borrowers have set up their campaign, they can invite friends and family to view it. “Friends and family don’t like to haggle because it makes them uncomfortable,” says Daniel Lieser, co-founder and head of business development for TrustLeaf. “Having this system in place prevents those awkward conversations of attempting to collect money when it’s due because it’s all laid out on our platform. Funding comes straight from the lender, a peer-to-peer system.”
Want to keep your audience’s attention beyond the first few minutes of your speech or presentation? These three suggestions can help you keep them engaged all the way to the end.
Business leaders often ask me this: “How can I sustain the audience’s attention throughout my speech?”
They go on to say: “Most audiences will be courteous enough to give the speaker a fair chance by listening closely for the first few minutes. Yet after that, I see their attention weakening. One person might be ignoring the host’s instructions about texting. Another is looking out the window. A third one is writing something, and I don’t think she is taking notes on my speech.”
With exasperation, they ask: “Do you have any strategies that will increase the attention span of my audiences?”
Fortunately, I do have recommendations that have worked for me and many presenters. Here are three of them.
FIRST: Move and keep on moving
Our eyes and our attention do not remain with still objects very long, yet we will stay focused on objects in motion. For example, suppose you and I are standing at the dock where cruise ships come in. We are watching a ship gliding across the horizon. Are we going to stop doing that, and begin looking at a docked ship? That’s not likely. Movement grabs us, not inactivity.
When you speak, get bold enough to walk away from the lectern, podium, table or wherever you have your notes and materials. Sure, this takes considerable courage at first. As happens with most changes, you will feel awkward initially. Before long though, going out into your audience will become easier.
Note how the eyes of your listeners follow you. Their minds will stay attuned as well.
TWO: Tell a compelling story
True, statistics can be impressive. When I read recently that 5.6 million Americans endure paralysis and that this number represents 1 out of every 50 citizens, that startled me.
Shortly afterward I read a heartwarming story about Devon Gales, a Southern University football player who was injured a season ago in a football game against the University of Georgia. Ever since that impact, he has been going through intense physical therapy, in hopes of regaining use of his limbs. Members of the Georgia football team have forgotten he was an opponent. They have visited him, comforted him, and encouraged fans to contribute toward purchasing a home for Devon.
Note how the statistic about paralysis could alert my audience for a couple of minutes, while the story about Devon will keep them enthralled and inspired for as long as I describe his quest for recovery.
Remember how children gave parents full attention when the parents said “Once upon a time”? That response does not disappear when we become adults.
THREE: Involve your audience
The era when audiences would sit passively for extended periods while a speaker remained the whole show has ended. As beloved comedian Jimmy Durante said frequently, “Everybody wants to get into the act.”
So find relevant, interesting, and tasteful activities that foster interaction. For example, if you are talking about customer service, give these instructions: “I’m sure that many of you have experienced great customer service. For the next five minutes, at each of your tables take turns identifying the companies that have given you the best customer service, and tell what made the service so impressive and memorable. So five minutes from now, we will have a leader you appoint at each table report the highlights of your discussion.”
During a half-hour presentation, design two or three interactive exercises, spacing them at intervals that provide a refreshing change.
If you have an inquiring mind and speak clearly, chances are, you would excel at podcasting. A podcast is like a radio show that you produce, but people can listen to it any time they like and you can record it any time you prefer. There’s no set schedule, and the equipment you need to get started is inexpensive. All you need is a theme for your show and some good ideas.
Have you ever listened to the radio and thought, “I wish I didn’t have to listen to all these ads”? If you’re like me, 99 percent of the time the ads on the radio are for things that don’t even apply to you, your interests or your needs. I often wonder about the advertisers — are they really taking the time to test and analyze whether their money spent on radio ads is actually converting? Or are radio ads just a strategy some marketing consultant told them to implement and no one is paying attention to see if there’s a return on investment?
Imagine the difference in experience when someone is listening to a high quality, informative, interesting podcast that’s ad-free. At the end of the podcast, perhaps the host (you) says, “If you’ve just heard this podcast, you earn a promotional code! Enter the code ‘WINNER’ on our website and get 10 percent off all our new…” Or “Get our free ebook on this topic at…” If you just gave 15 to 30 minutes of quality content, you’ve earned the right to pitch. And your audience is much more likely to trust you and follow your direction because you’ve earned the right to pitch to them respectfully and fairly.
According to an article, “The Rising Popularity of Podcasts,” there are six reasons a business owner should consider podcasting:
It doesn’t take much to get started.
Podcasts are perfect for storytelling.
They’re extremely convenient to consume (most are only 15 to 30 minutes long).
You can become known as an industry expert.
Your listeners are in it for the long haul (because they subscribe).
You can reach a new, targeted audience.
How to set up your podcast
There are three phases to setting up a podcast.
Phase One: Show format
Before you decide on your show’s format, answer the following questions:
1. Do you want to produce your show every week? Every other week? Monthly? Don’t do a daily show unless you have a clear strategy in place. Start weekly or twice a month. That’ll be plenty.
2. Will you have guests? (Most do!) Who are the top 100 people you’d like to interview? (Hint: Choose people who have big lists to promote your interview of them to, or who are exceptionally interesting, or whose friendship could really grow your business.)
3. What’s your one specific statement? My literary agency’s statement is “We sell good books to good publishers.” If I were doing a podcast for that company, that is the last thing I’d say at the end of every podcast, so people remember it. If you have a USP (Unique Selling Proposition — something your company does to make you unique or rare in your category), put it on an index card so you can use it at the end of your podcasts.
Phase Two: Set up your studio
You don’t have to start out with anything expensive. To start out, you’ll need the following items:
A quality microphone
A pop shield that goes over the top of the microphone (about $20)
An extender arm to move the microphone closer or further from your mouth
Headphones that don’t “leak” sound (in-ear or cupping your ears)
Phase Three: Launch like a linebacker
First you need to arrange a time to talk with your first guest. Then do some research about your guest and prepare a list of good questions that you want to ask him or her. (Decide if you want to share the list with your guest in advance — it’s not mandatory!)
Prepare yourself and your space. Put the dog outside. Shut your office door. Unplug the phone and turn off your cell. Get rid of ambient noise (air conditioning, forced-air heating, a fan etc.). You don’t need a swanky sound-proofed studio to do this. Take a few breaths and remember that this is your first podcast, and it’s normal to make a few mistakes.
When the time comes, thank your guest, tell them how excited you are and promise them that you will give them time to pitch their book, song, product, website or whatever it may be at the end of the interview.
Hit record when the conversation begins. Relax during the interview. Pay 100 percent attention to your guest. Talk naturally, but get your questions in, unless something more interesting happens, and you find yourselves walking down a different but fascinating conversational path.
At the end of the interview, ask your guest if there’s anything else you should have asked; prompt them to talk about their product or service and repeat the URL after they mention it.
Stick in your call to action — “Come to the website to get your discount code” or “Free ebook” or whatever it is that you want to pitch — and remind your audience when the next episode will be released. Tell them where, and how to get your podcasts. Finally, end with your USP, give the audience the hyperlink one more time, and thank them for listening. You did it! Podcast one is complete!
Publishing and promoting
Where do you put your finished podcast? How do people find out about it? When your audio file is ready to go, you can upload it to a site like www.LibSyn.com, which hosts podcasts in the same way that Vimeo or YouTube host videos and the same way your website host sponsors your website. From there, you promote it and make it available in various distribution arenas. The website www.LibSyn.com creates the RSS feed (Rich Site Summary) that you can use to connect to sites like iTunes, www.Stitcher.com and Google Play.
Podcast expert Stephen Woessner advises, “Just because somebody doesn’t have a network or a platform or a [mailing] list already doesn’t mean you shouldn’t start one. Go spend a couple hundred bucks on a Facebook campaign, create a website, link your website to your podcast, which you’ve uploaded to iTunes, and use Pat Flynn’s Smart Podcast Player. Drive people to your website, give them a great gift to open the podcast link.”
Making money from your podcast
Once you have a lot of regular listeners, you can:
Have people pay to be interviewed by you
Sell advertising (like a radio station does)
Sell from the podcast (an ad at the end, a pitch during)
Convert listeners by giving them something on your website and then having your reps sell to them directly.
There are pros and cons to each option. Think it through before you determine your strategy.
All the podcasters I know consistently describe it as the single most important thing that exploded their lead generation. Of course, we know that once upon a time in the history of American business, the cotton gin and the telegraph did similarly amazing things. But heck, you’re here now. May as well take advantage of the technology that’s working at this moment in history.
The story you are about to read is true except for some exaggerations which were made up. The names have been changed to protect those involved or because no one can remember them.
Earl was a run of the mill, middle aged guy that blended naturally in a crowd. But there was one element that made him stand out. He knew tricks. Lots of them. And he knew just how to put them to use.
Florida nights were hopping with ball games, movies, clubs, you name it. People were out having a great time and that’s probably what gave him the idea.
How could it not work? Who would not pay a reasonable price to come to a magic show? Can’t you see it? Families will come from everywhere, there will be music and popcorn, laughter and applause. And amazement. Lots of that. And so, it was on. The building was rented, the chairs delivered, the sound system tested and three weeks of non-stop advertising on the radio. When you hear “non-stop,” you’re likely thinking “frequent,” but almost literally it was, “89.9FM All Earl, All the Time.”
The place was bound to be packed out. Fifteen hundred seats lined the auditorium. Let’s roll.
It was the big night and at five minutes before show time, Earl waited nervously back stage. A timid peek from behind the curtain revealed only thirty people in the audience. Seventeen from the local magic club, eight who were hired to run the concession stand and a guy named Charlie with his wife and two kids. Also, Earls mama. A disappointing turn out but on a brighter note, everyone got a front row seat.
What went wrong? In a town of over 61,000 people and round the clock ads, only a few people show up?
Isn’t a family magic show a great idea? Absolutely. Could the problem perhaps be in the marketing? Let’s examine. He could have had the best show since Houdin Thurstonfield but without the right approach, the attendance was destined to fall flat.
And so it goes with business. Enterprises begin every day and fight for each dollar. They scream and yell for attention but alas the time gives out before the money rolls in and, like Earl’s great show, it’s “Curtains.”
Markets are conversations.
The easiest method for growing a business is to throw money at marketing but if that were all it took, most of us would be sunning ourselves by the seashore sporting tiny umbrella in a fruity drink with pineapple. Of course, advertising works but only as part of a much larger effort to capture and build lasting business relationships.
Interesting that the reason so many businesses fail is not due to a faulty product but a faulty communication. An effective marketing campaign should stir a response, it should begin a conversation. It should give a compelling reason for the client to reach out and receive a benefit.
Monologues that merely bellow, “Buy my product,” mainly serve to reduce the resources of the business that is already struggling. Like a game of chess, the entrepreneur should make a move, then ask his listener to make a move. This creates a dialog that leads to problem solving benefits and thereby income for the well deserving concern.
Through ads, emails, mailings, calls, bonuses, campaigns and even personal visits, we are able to create a viable relationship out of which commerce can emerge. As a wise mentor once said, “Business is still done, person to person.” This is true even of the largest companies as the customer gets the sense that a real person is involved somewhere in the process.
Had Earl begun his quest with a smaller group and built interest, had he tested his market, built a fan base, offered exciting previews and given them a chance to feel a part of the effort, he could have seen great results. Had he communicated in various ways and developed creative options through which they could respond, he might have packed the house.
As it is, he saw the result of a single effort, one-way business conversation. Success is an exchange. It is never a note but always a symphony.
If you’re like millions of Americans, you dream of starting your own business. But of course, there are dozens of obstacles that may keep you from actually doing that. You might not have enough motivation, for example, or time to actually see the work through; or you might not even have a solid idea to begin with — yet.
But where most people get stopped cold is their realization that it takes money to start a business — money they don’t have.
Still, consider: There are loans, grants, and other fundraising options, like crowdfunding, available to get you what you need; so money is not a good excuse not to start a business. And, beyond that, there are certain types of businesses you can start with almost no cash.
What it takes to start a business
Your first step is to explore what it takes to formally “start” a business, and which of those items cost money.
Planning. You’ll need to come up with a business plan and financial model, of course, but you can do this on your own, for free.
Business license. If you’re planning on creating a partnership, LLC or corporation, you’ll need to file some paperwork — but it probably won’t cost you more than a few hundred dollars, depending on what licensing you need. The Small Business Administration has plenty of resources to help you figure out what you need, how to obtain it and how much it will cost.
A domain name. You’ll need to invest in your online brand early on; while I suggest going as professional as possible, you could also use a bare-bones approach to launch, if yours is a minimum viable product. Often, a catchy domain name is all you need to define your brand at the start, and one can be bought for as little as $10 (if you can find one that isn’t taken!). I use GoDaddy to buy domains.
A website. Website builders these days are free and intuitive to use. You won’t expend anything but time to build your first site. I recommend starting simple with a widely-used website platform, like WordPress.
Marketing. While marketing has a reputation for being very expensive, there are actually a ton of really effective tactics that can be performed with only an investment of your time. Social media marketing, SEO and content marketing all fit within this category — and, honestly, those are really all you need. For help, see The Definitive Guide to Marketing Your Business Online.
Equipment. Equipment, offices and other tangible assets are cash killers, but not all businesses need them. Some businesses don’t require any of these things, as I’ll explain shortly.
Products. Finally, all businesses need to sell something, which usually means some up-front investing. However, many services can be performed with an investment of time rather than money.
Types of businesses to start
So, which types of businesses can be started without a heavy financial burden in any of the above areas?
1. Personal creations
First off, there are personal creations, like arts and crafts. For example, if you’re a painter, you could sell your works of art with an investment of nothing more than art supplies and your own time. Platforms like Etsy, eBay and Amazon cater to creators and make it easy to turn a profit from your work.
2. In-home services
Services don’t cost you any money up-front because they’re intangible goods. And if you’re working in people’s own homes or neighborhoods, you won’t need a physical headquarters for your business. For example, you could start a babysitting service, a dog-walking or pet-sitting service or something like landscaping or snow-plowing.
3. Repair or skill-based services
If you have a specific skill, you could use your skilled labor as the main revenue driver for your business. For example, if you’re a handyman, you could cater to homeowners who don’t know much about home repairs.
Just like in-home services, these types of gigs don’t require you to have a physical establishment and don’t require you to invest in anything up-front, except perhaps the tools or equipment you’re going to need for the job, which will vary in cost.
Many workers think about becoming entrepreneurs only after getting several years of professional experience under their belt. Think about the industry you’re in, and how much you’ve been able to learn in that time. Up-and-coming professionals, or startup business owners will likely be glad to pay you for your expertise. Consulting is a service that costs only time to produce, but can be highly valuable as a career opportunity.
The idea behind resale is simple: You acquire products and sell them to other people. You can use dropshipping or wholesaling to acquire these goods. With dropshipping, you’ll ship directly from the manufacturer (and turn a lower profit), but you’ll need almost no startup cash. With wholesaling, you’ll need more money and space up-front, but you’ll end up with more control and more money.
Of course, you could also piece together your own miniature business through micropreneurship and shared-economy opportunities. For example, you could drive for a service like Uber, or rent your home out through AirBnB or find similar services that make use of what you’ve already got.
After you get your business started and start earning revenue, your lack of startup capital will become less of a problem. You can reap the profits from your venture and reinvest them, or use them to start an even bigger business.
Hopefully, you now realize that you don’t need a lot of up-front money to start a business. In fact, you can start one for almost nothing. You just need to know what types of businesses work best in that model.
Do you have a life skill that you’re currently only using in your free time? Though you may assume it’s only suitable as a hobby, there’s a chance you can monetize it and turn your talent into a money-making business venture. That’s if you know what you’re doing, of course.
How to monetize your hobby
Hobbies that could potentially be monetized and turned into businesses include painting, woodworking, baking, web design, dog training — literally anything that provides value to others.
The problem is that many of us are afraid to take action, even when we know we have a marketable skill, because we are afraid of failure. We fear that if we attempt to monetize a hobby and fail, we’ll no longer feel joy or satisfaction from the activity at all… or others will regard us differently.
This can be a scary proposition that may prevent many talented individuals from pursuing their dream. If this sounds familiar to you, then listen up.
Trying to monetize a hobby isn’t easy, but on the other hand, it certainly isn’t rocket science. With a little preparation and strategic execution, you can enjoy a positive result. Here are a few tips:
1. Create a plan
In order to begin monetizing your hobby, you have to devise a game plan. This plan will obviously have to be tweaked along the way, but it’s worthwhile to have a strategy in place from the start.
This is something Tom Hess, a successful guitar teacher, regularly tells his students if they express an interest in someday becoming music instructors as well. He advises them to start part-time and gradually shift into full-time work.
“Fill up all your available time on nights and weekends with students and save all the money you make (do not spend a penny!),” Hess says. “Once you have saved enough money to cover four to six months of expenses, quit your job and go all-in to build your guitar teaching business even further.”
This may not be your particular game plan, but you need one of some kind. There’s nothing smart about diving in blindly and hoping things work out.
2. Get your first sale
You don’t need to go from hobby to million-dollar business in a matter of days. Your number one goal in the beginning stages is to get your first sale. Whether that means making a $5 sale or signing a $5,000 retainer, your first sale is the hardest and most important sale you’ll ever make.
There are plenty of strategies for actually getting your first sale, but it all depends on the product you’re selling. If you’re selling a service, you may want to start by offering a free trial and generating some word of mouth. If it’s a product, good product placement and advertising in the right places can lead to a sale. (Social media is especially powerful if you’re trying to reach the masses with minimal resources on hand.)
While you may believe in your product, it’s important to remember that other people have no reason to believe in it. You haven’t proven yourself yet. Hustle hard for that first sale and then turn one sale into two, two sales into four and so forth.
3. Maximize your time
For many people, working a full-time job and then spending extra hours pursuing a hobby isn’t practical. Between kids, significant other, friends and social requirements, you simply don’t have enough hours in the day.
In the initial stages, you’ll have to get creative about how you use your time. Perhaps you need to wake up an hour earlier than you’re used to and get some stuff done before your regular job.
Alternatively, it could mean involving your kids in your hobby so you can spend time with them while still accomplishing new things.
4. Build an online presence
In business today, everybody needs an online presence to generate activity. This means creating and maintaining a website, social media profiles, and everything else that goes into branding yourself as a professional.
Related: How This Army Veteran Turned His Hobby Into a $20 Million Business
“Keeping consistency in the way you present yourself will give you a more established image, which in turn will result in more fans,” graphic designer Christopher Young says. “If you are unsure of how to start, look for established musicians that produce similar music and borrow from their ideas. Art is not created in a vacuum; it’s okay to draw inspiration from other people’s work.”
A few people will stumble across you online, but a lot of business success happens via word of mouth and networking. You have to be prepared to be active on this side of self-promotion, as well.
Find clubs, conferences and groups in your specialty that cater to other professionals in the niche. You’ll learn a lot at these events and get the chance to mingle with people who are at the same stage as you, and preferably a little further. Just be sure you have an elevator speech prepared for moments like those.
“People are bound to ask ‘So, what do you do?’ Have an ‘elevator speech’ ready so you know exactly what to say,” artist Quinn Dombrowski advises. “It only needs to be a few sentences — a minute or less — about who you are and what you do. If they’re interested, they will follow up with additional questions.”
6. Treat it like a job
The final piece of advice is to treat your hobby like a job. If you want it to become your main source of revenue someday — or at least a sustainable second stream of income — then you have to give it the attention it deserves.
Carve out time to work on your hobby, read about the industry, learn about sales and marketing and dedicate yourself to steady improvement. This is how to achieve positive results.
The longer you wait to take action, the more you’re likely to talk yourself out of pursuing your hobby. Though it wouldn’t be wise to dive in prematurely and present a low-quality product or service, you don’t want to overthink the challenge either.
If you’re looking for more information on how to turn a hobby into a revenue-producing job or side gig, you can learn a lot from listening to what others have done. Two really wonderful websites are Side Hustle Nation and I Will Teach You to Be Rich. Each offers exceptional business advice that sort of bridges the gap between hobby and business.
There’s also something to be said for learning through trial and error. If you’re good at what you do and there’s a market for your hobby, then there’s no reason why you can’t monetize it and earn a second stream of revenue. Dive in and see what happens.
Most people get really anxious when it’s time to start developing ideas for their business.
Lots of people love the idea of brainstorming ideas…but can never actually find an idea that they like enough to execute. I’m not sure if there’s some weird internal test that gets run in our heads that makes us believe an idea isn’t “good enough” — but for whatever reason, it seems like there are two huge problems when it comes to developing an idea:
1. We don’t think we have any good ideas, so there’s nothing we can possibly see succeeding. This is the guy who’s always telling you about a new project he wants to start, then you find out two weeks later he’s already abandoned it.
2. We think we have too many good ideas, and we are completely confused as to which one we should run with long term. This is the guy who always has 12 projects brewing at the same time, all in various stages of progress, none really doing well.
While these seem to be opposing concepts, they often ensnare us in the same dilemma: half-starting and eventually quitting. So where should you be focusing your time and energy? How do you know if your idea is good enough to “make it.”
First, remember something crucial: All businesses — services or products, online or offline — are a direct response to a problem. The purpose of a business….the only reason it exists, in fact, is to solve a problem. You should be actively thinking of how you can solve other people’s problems. On a day-to-day basis, you should be thinking about thing you and others around you struggle with…then find ways to solve those headaches through an idea, device, service or piece of software.
Better yet, start pretending you’re Olivia Pope and become relentless in your approach to problem solving and “fixing” things.
Coming up with fresh business ideas shouldn’t be something that you just do once a year when you need some money. If you want to be an entrepreneur, you must fundamentally change the way you look at the world, always seeking out opportunities to serve other people and get paid in return. With this in mind, your well of creative inspiration will never run dry. There are four places I look when I want to come up with a new business idea quickly:
1. Hobbies and skills you’re already good at.
Everybody has SOMETHING that they’re good at. The problem is, most of us take our skills for granted. We don’t appreciate the fact that the knowledge and abilities we have at our disposal could be very valuable to someone else.
Maybe you’re bilingual, or you can play an instrument.
Perhaps you know how to organize the HELL out of a closet.
Maybe you’re really good at cooking…or building websites.
You might have even successfully completed a few triathlons.
All of those are things that other people want to be able do for themselves, but in many cases, can’t. If you’ve spent considerable time learning to do something — either in school, as an apprentice, as a hobby or even as a recreational activity — that time has immense value. Rather than learning to do what you’ve done or putting in months (or years) of work grinding away, many people will be more than happy to pay you in order to get what they want much more quickly.
You can teach someone else how to do that. Or if you don’t want to teach it, you can simply use that skill to provide a service and do the work for them.
2. Things you’ve done for work.
SPOILER ALERT: “Learned at work” skills are a great place to look when fishing for your first profitable business idea. If you’ve ever held a job, that’s proof you have at least one skill or idea that somebody is willing to pay money for!
Like most people, you may be under the assumption that your hourly wage/salary reflects the actual value of your skills — but here’s the thing: there is no “actual” or innate value of a skill, service or idea.
Washing dishes could be a $7/hour skill…or a $15/hour skill depending on whose plates you’re cleaning.
Building a mobile app for your employer could be one of the hundreds of other things you do every year as part of your $60,000 salary.
Your salary doesn’t reflect true value, it just reflects your employer’s estimation of how much they can afford to pay you after they’ve accounted for all their expenses + made a healthy profit.
If you have a boss, you’re not making as much money as you could be for your time. Period.
Here’s a partial list of all the things taking money out of your paycheck before you even see it:
Recruiting costs — the employer has to find you and get your attention. This happens online, at career events or by putting a sign in the window. Every position needs to be filled — all the way to high level recruitment for senior positions. Costly, to say the least.
Training — it costs money for the materials you’ll need to get started. Things like computers, software, uniforms, desks, stupid potted plants, and that ergonomic mouse pad that you didn’t ask for with the weird hump by the wrist hump. All that’s coming out of your salary. You’re welcome!
Health insurance — If you’re full time (40 hrs), insurance is costing you, and it’s probably more expensive from your employer than it would be to purchase your own.
Financial programs — some companies offer 401K matching programs, stock options and other financial incentives, which are great. But will also cut into your salary in many cases.
Overhead — this includes any physical office space and all the utilities and other recurring costs that come with the building the employer occupies.
Management and executive salaries — yeah…often quite disproportionate.
By the time your salary is up for discussion, it’s less about what you’re worth and more what they can afford. In some cases, someone working a job that deserves $100,000 is getting $50,000 or less!
The skills you acquire along your journey are yours to use as you wish, at a price that you command.
Now, your job is just to identify which of your on-the-job skills is ripe for the picking, start developing your idea and then find your customers.
Ready to start your business but don’t know where to begin? I created this free guide for you to realize your future isn’t far off.
Related: This Founder’s Best Advice for Entrepreneurs: To Succeed, Entrepreneurs Need to Get Comfortable with Being Uncomfortable
3. Things people ask you for.
Besides the seemingly interminable amount of time spent in school, I think one of the biggest turn offs about a career in medicine would be the relentless questions from well-intentioned civilians looking to “pick my brain” about a medical problem they were having.
“Do you have a quick second…I wanted to get your opinion on something.
[DOESN’T WAIT FOR PERMISSION]
I’ve been having this weird pain in my chest. It’s a bit like indigestion…but it’s a little bit sharper. I usually always get it after I eat spicy foods. Any idea what that could be?
[DOESN’T WAIT FOR RESPONSE]
Yeah, because I checked on WebMD and they said I should get checked for polyps on my spleen if it doesn’t subside in about a week or so. What should I do for polyps?”
On and on these questions would go. But I guess that’s how it goes with many professions, right? If you have a friend who is an attorney, you might find yourself shooting him a text that says something like, “Can you go to jail for unpaid parking tickets…hypothetically?”
Point here is that whether you realize it or not, we lean on experts to help us figure things out, and if people keep asking you for help, advice or insight in a particular area, there’s a good chance that others look at you as the expert or “go-to” in their circle of influence.
You have to start paying more attention to things that people ask you for. If someone asks you to help them with something, your mind should immediately begin assessing whether this is something that could become profitable.
Do you have friends who are always asking you for diet advice? What about people who are constantly asking your your insight about their relationships? Maybe friends and family call you to watch their dogs when they go out of town.
Start paying attention to the things that people require of you, then eventually, you’ll get paid to do things that you used to do for free.
4. Things you want to learn.
After teaching college test prep for a while, my second successful freelance business that I quickly scaled to over $100k was a web design company called Primal Digital. Guess what? I barely knew anything about web design in the beginning!
The idea started on a whim. I’d already had a bit of success with my first business as an SAT tutor, and I was looking for something that I could do from my house. I was not an expert by any means. I knew just enough to get a basic one-page site up on WordPress and that was about it. It’s almost embarrassing to think about as I type it now.
I set up my web design company’s one-page website with a very fancy theme to give the appearance that I was much more established than I actually was…and proceeded to start posting on popular freelance job boards like Upwork (Elance/oDesk at the time) and a few others.
Within a few hours, I started getting bites for $1,000, $2,000, even $5,000 jobs!
How was I able to get away with this?
My first few clients were happy to pay me because even though I wasn’t a world class expert, I still knew more than they did about building a website. Remember, for someone who doesn’t use computers much outside of Google and Facebook, even setting up a basic WordPress blog is a damn near mystical process. I worked my way up doing simple work, and as my skill set improved, I was able to charge more and more for my services. I essentially paid myself to learn how to build websites.
You could do the same thing easily.
Find a skill or idea that you’re a beginner in…but that you want to become really good at. Then gradually improve that skill set and find customers who are willing to pay you as you learn. It’s like paying yourself to go to school for something that you actually care about.
You don’t have to start as an expert. It’s ok if you haven’t done this before. You’ll get better with time — and you can get paid in the process.