Welcome to the Summer 2005
My Own Business, Inc. (MOBI) newsletter!
My Own Business, Inc. is a 501(c)(3) nonprofit organization providing free educational coursework on our website www.myownbusiness.org to foster successful entrepreneurs.
Each issue will give you information and ideas to help achieve your entrepreneurial goals. Highlights of this issue include:
- Feature Article "Is E-Commerce Right for Your Business?" by David Lohr, Manager of Web Programming, WeddingChannel.com and Trustee, My Own Business, Inc.
- Having trouble figuring out business licenses and permits? Here are 5 useful websites to help you, by Thomas Mix, Executive Director for My Own Business, Inc.
- "Ten Reasons To Be In Business and Ten Ways To Get There," by Phil Holland, Founder of My Own Business, Inc.
Is E-Commerce Right for Your Business?
By David Lohr, Manager of Web Programming, WeddingChannel.com
E-Commerce, the sale of products and services over the Internet, is the fastest growing segment of economy. It allows even the smallest business to reach a global audience with its product or message with minimal cost. Currently there are more than 300 million people using the Internet internationally. Sixty-nine percent of the online population has made a least one purchase in the last 90 days and analysts project online sales of $3.2 trillion by the end of this year. The Internet user's average household income is $59,000, making this a very attractive demographic for most businesses to target.
So is e-commerce right for you? The answer is: probably, depending on the nature of your business. If you own a small bookstore is there a good chance you can sell your books online? Probably not. Amazon and Barnes & Noble have established their hold over this market and their sheer size, name recognition and the relationship of trust they have with their customers allows them to dominate this market with good pricing (due to economies of scale) and remarkable customer loyalty. However, there are several ways a website will enable a local bookstore to reach new customers, get them to know the store better and keep them coming back. You might offer notices of special promotions or reading by authors. So a website doesn't need to exist solely to sell your product online.
A website can also supplement sales of your already established retail store. If you sell a unique product such as gourmet chocolates, you can reach customers around the country or the world who do not have access to your product. Also, your local customers will have information about your business 24 hours a day. How many times have you wanted information about a store, looked them up in the Yellow Pages, and found they were closed? It is much better to not only have information about your store hours available 24 hours a day, 7 days a week, but also about your entire product line. You can add pictures and maybe even a video. So your website should be promoted everywhere including your stationery, sales forms and advertisements.
Trust will become the cornerstone of building money transactions online. As Warren Buffett has said: "If you don't know jewelry, know your jeweler." Many electronic payment companies can be found on the popular search engine Google. Issues such as taxes, security, cost and reliability will need to be considered. A basic tutorial of the alternative methods for online payments can be found at the free website for entrepreneurs, www.myownbusiness.org.
David Lohr is Manager of Web Programming at www.weddingchannel.com and a trustee of My Own Business, Inc.
Permits, Licenses and Business Names
Figuring out what business licenses and permits you will need to get can be a difficult task especially if you have never gone through the process before. Fortunately there are some great resources out there that will help you through the process. Please refer to the following website links:
- www.business.gov - A great resource of information on both State & Federal requirements for business licenses.
- www.sba.gov - A directory on the Small Business Administrations website for finding out where to obtain business licenses in each state.
- www.irs.gov - Find out what a Employer Identification Number is and if you need to get one for your business.
- www.entrepreneur.com - What is in a business name and how to choose a name that will best suit your business.
- www.entrepreneur.com - Multiple articles on how to legally establish your very own home based business.
Ten Reasons To Be In Your Own Business and Ten Ways To Get There
By Phil Holland, Founder, www.myownbusiness.org
TOP TEN REASONS TO BE YOUR OWN BOSS:
- To gain the exhilaration of being President.
- To become free of a job you do not enjoy.
- To escape the thread of impending or possible layoff.
- If you find something you love to do, why not? Why not now?
- Control your destiny or someone else will.
- What have you got to lose gain?
- To achieve true financial independence.
- To strengthen family ties: now it's "we against the world!"
- To escape the threat of your job being outsourced.
- It's time to start living the life you imagined-whose life is it anyway?
TOP TEN WAYS TO GET STARTED IN YOUR OWN BUSINESS:
- Buy out your boss who may be ready to retire.
- Prepare a business plan for business you'd love: see www.myownbusiness.org.
- Take the free entrepreneur's course at www.myownbusiness.org.
- Learn how to run a business you love by going to work for someone in that business.
- Carefully research profitable franchises and businesses for sale.
- Begin saving money by living frugally.
- Start a moonlight business with your family, without quitting your job.
- Practice the due diligence process by making practice offers on business for sale.
- Ask the seller of a business to let you pay for the business over time.
- Quit talking and begin doing.
Share Your Success Story
Sharing your Success Story in the FYI Newsletter offers a double benefit: You can gain widespread recognition by promoting your business to the more than 160,000 visitors who view the My Own Business site over 770,000 times each month. Also, your success story will provide lessons and inspiration to the many others who are striving to achieve success. We really want to hear from you.
Visit our Success Stories page and share your good news at myownbusiness.org/success_story.html.
New Updates to My Own Business
We have been hard at work and are proud to introduce the following course enhancements:
- New Sessions – We are creating additional sessions filled with useful and current information on the following topics:
- International Trade
- Permits, Licenses and Business Names
- Hiring and Training
- Video Clips - Three new video clips have been implemented into our Certificate course with several more planned over the next few months. These clips will greatly enhance the certificate course experience.
- New Enhancements - Enhancements are continually being made to all sessions to keep each session up to date and full of valuable information.
Dear MOBI Column
We welcome your questions to be answered in this Newsletter feature! Here is our Q and A for this edition:
Question: Hi. I want to buy a laundromat business but it will cost $500,000. I know that sounds expensive but it already has a solid customer base and makes on average $20,000 - $23,000/month. I know that sometimes the owner will finance but he's going to probably want $90,000 down or more. So my question is will I have to raise $90,000 on my own, or can I get some help from the SBA such as a loan or something to cover the down payment or maybe all $500,000!? I remember reading that most people use there own money/nest egg to start a business and only get a loan after there business is already in place and they just need more money to run it. Somebody help me out.
Answer: When you say "makes $20,000 per month" I assume you mean sales and would suggest you spend a week in the store and count how much money is going into the machines over that time. Compare this with the sales shown on the income statement you have been furnished.
Are adequate provisions made on the income statement for debt service, utilities, labor, maintenance, depreciation, rent, etc? Would the net earnings give a satisfactory return on your purchase price? Have your accountant go over the financial statements furnished by the seller.
What are the terms of the lease? For a $500,000 investment you would want to have at least 10 years left on the primary term with perhaps another 10 years in options. Has your lawyer looked over the lease and purchase agreement?
The SBA has loan guarantee programs that are funded by banks. You need to find a local bank that is handling SBA loans, or visit the nearest SBA field office.
Finally, I'd suggest you review Session 9, Buying a Business or Franchise.
Phil Holland, Founder of My Own Business, Inc.
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