Tuesday, June 8, 2010

Bootstrap StartUp Secret #5

Watch Your Cash

If you’ve spoken with me in person, you know how worked up I get about the long-term confusion foisted on New Entrepreneurs through the guise of accounting. So I want to make sure you know this key BootStrap secret.

Just about everyone is going to tell you that you’ve got to set up a complicated accounting system when you start a business. If you’re doing a true BootStrap—small amounts of cash, big amounts of heart, and a chunk of your time, you can waste a lot of time and money chasing your tail on this one. As far as the banking and accounting process what you really need is to closely track your cash. How much is coming in? Where is it coming from? How long can you keep the cash that comes in?

Be as detailed and aggressive with the money you spend. Track in great detail what comes into your business as a result of spending money. If you invest in a marketing campaign, create a specific, detailed way to measure the results (coupon, special offer, etc.). The goal here is to know down to the penny how many customers, how many sales, sales of what size happened because of the money you spent.

Money that you do need to spend on printed materials, hard goods (items purchased to be used in the business but not consumed such as furniture, computers, and such) keep track of how long they last, how much you use them, and if you actually get a result from the usage that grows your business.

Do you believe Internet access at the office is essential? It might be. Then again, for your business, it might not be. Your cell phone might be much more important so a BlackBerry and service might be more valuable than an Internet drop into your office.

It’s important to have an intimate understanding of the money moving into and out of your business. Why and how it moves, what are the cash flow cycles? The more of this information you have the more you can actually control and respond to the rhythms and demands of your business.

My wish for you is that you reach a point with your business that the involved accounting procedures become an asset for your business. You will need the ability to combine accounting information by outbound (Accounts Payable) and inbound (Account Receivable)—and it’s really not more complicated than that at this stage of the game.

Wishing you Success & Heart,

Heidi Sue

Bootstrap StartUp Secret #4

Deal Effectively with Feelings of Desperation

Your ability to notice and respond to desperate feelings while you’re getting your BootStrap Start-Up going are essential. Because you really are the key element of your business at this stage, your feelings, actions and choices are the foundation of success—or failure. My clients find these tools consistently helpful, so you can have a head start by using these simple steps for handling these kinds of feelings.

First thing to do: Quickly notice your desperate, helpless or overwhelmed feelings. You may be tempted to just work or power through your feelings. You get short-term benefit for a long-term, undesirable impact. You may end up working in counter-productive directions.

What are your “tells” when you feel this way? Even if no one sees it, you feel it and can find the small cues for your experience. Extra fidgeting? A sudden urge to multi-task? Unexpected craving for coffee or sugar? Cranky for no reason? Whatever your symptom, develop the ability to recognize them quickly.

Take a look back at times when you’ve felt this way and see what you can learn so you’re better prepared next time.

Second thing to do: Make a physical change for yourself. When you recognize the symptoms, do something physical to create a mini-break. In the training business it’s called a state-change. All you do is change your physical position—other changes follow.

Kandy Love, my yoga teacher when I live in Florida said, “If you have a problem do a headstand or a down-dog. It’s got to look different from upside.” And it works! Just like deep breathing, these two poses increase blood flow to your breath. So when desperation comes up, don’t just stay there! A la Churchill, keep moving!

Third thing to do: You might be tempted to just jump straight to this one. Sure, you could do that, but I strongly suggest using the first two steps—you’ll get better results when you use them in order.

Ask yourself, “Is this actually true?” For example, you may feel desperate about taking the step to start your business. Maybe you hear things such as you never could do it before, why don’t you just get a job like regular people, you’re too old, you’ll waste the retirement, you won’t have enough energy to do a business now, and many other internal arguments for moving forward.

One way to find out what’s true is to write down all the reasons the next step is a bad idea. Now, ask yourself if each one is true. What could make each panic point true? What makes them less likely to be true?

You’re going to run into a lot of myths on what it takes to be an entrepreneur and what you have to do to have a successful business. That’s one of the reasons I teach which rules to break when during the BootStrap Your Start-Up Program.

Many of those rules simply aren’t true—I’ve been “breaking” most of them for 20 years now. What matters is looking at whatever fears/rules come up and figuring out if a desperate feeling is a warning you should heed or an assumption that just doesn’t apply.

Your goal is be aware that feelings of desperation are normal for new entrepreneurs. And they don’t have to define if you succeed or not. You have choices when you find yourself in this situation. It’s fast and effective to change your physical orientation such as standing up, moving from your desk to a table, or even taking a quick walk get you out of the loop and stimulate nature abilities to be clear and intelligent.

With so much mythology and long-standing tradition, being able to tell the difference between what’s true for you, true now, or just not useful is key.

Wishing you Success & Heart,

Heidi Sue

Bootstrap StartUp Secret #3

Don’t be Surprised When You Feel Desperate

You might wish or believe that all your feelings about your start-up will be positive. Better to accept they won’t and be prepared when things get bumpy.

I cannot predict when a sense of desperation will strike you. However, I can assure it’s normal and doesn’t mean anything your success or failure. Some feel this way from the beginning. Others find a new contract, raising your rates, or hiring out services trigger the feeling. And some entrepreneurs reach a point of feeling desperate when they are away from the business.

No matter when this strikes you, responding effective is important. Failing to do so has serious consequences ranging from becoming an unhealthy workaholic to giving up on the venture.

Desperate Time #1: During the initial phase of launching the business is a common time to feel this way and be tempted to panic. It might be triggered by the process of preparing to publicly declare the business or shortly after. Either way, you want to be aware this is completely normal for a new BootStrap Entrepreneur to have these feelings.

Desperate Time #2: You might be surprised by this one—many people are. Another time a new entrepreneur may feel desperate is the first wave (and any additional waves) of success. Although this may seem counter-intuitive, waves of success run into whatever you learned about business: can’t be trusted, not for people of quality, etc. So success waves can also trigger feelings of desperation.

Desperate Time #3: Another critical situation may trigger feelings of desperation: the business growing to the point where you need to stop doing everything solo. But the thought of handing off any responsibility to someone new is terrifying. What if they don’t do it properly, just like you? You won’t be as in control and that is scary. How can someone else possibly care about the business as much as you do?

You may find other times or situations that bring up feelings of desperation—these are the common ones I’ve experienced personally and coached my clients through. The good news is you’re human and can use your unique qualities (thank goodness!) that come to ahead.

Entrepreneurs have rites of passage, too. Fortunately, you don’t have to walk the road blind. Tomorrow I’ll share some techniques for handling these feelings when they come up.

Wishing you Success & Heart,

Heidi Sue

Bootstrap StartUp Secret #2

Make Cheap-Cuts Not Short Cuts

You read during Secret #1 that I suggest you find ways to NOT spend money over all the methods of spending a ton of money on your start-up. I call these techniques Cheap-Cuts™. Short-cut implies not doing it well—cutting corners that won’t show but bring down quality. This is not good for your business. Neither does just completely believing all the advice you hear.

I’m going to share with you today five of the 50 Cheap-Cuts I teach in the The StartUp Genius Online Bootcamp. These are some of the key places you can make Cheap-Cuts and not hurt your business.

Cheap-Cut #1 Do not create the standard, expensive involved website: While everyone expects you to have a website, the majority of those out there do not get you any business. You see, people rarely buy because they stop by your website and read the “About Us” tab, the “Services” tab and since the “Contact” tab is usually the last one, it’s a very rare Internet surfer who makes it that far to actually contact you. Face it, if they don’t contact you in some way, there is no business—just an expensive, typically useless website.

Cheap-Cut #2 Use pre-designed, inexpensive graphics for your initial logo: You can tap lots of resources for this type of solution. On some sites you pay as little as a couple bucks for a download. Use the graphic in a way that matches what you paid for, and I promise you they are not that hard to find or get, as revealed in the BootStrap Start-up Program. The average business that spends a lot on graphic design in the first 2 years wastes all that money. In 24-36 months re-design is needed and you don’t want to spend on this stuff twice at this stage.

Sadly, many first time entrepreneurs get hung up on this one and then don’t spent the money when it’s time. So skip paying twice. Make do with the highest level you can at the start. When the business has created the money, get an expensive art director and design.

Cheap-Cut #3: Do not buy more stuff :At the beginning you are likely to have more tax deductions than income to count against those deductions. There is no point to wracking up a ton of loss over what is allowed for your level of income. Just don’t do it! Use your existing computer. Use as much furniture from home for your office (at home or not) as you can.

Until that income level goes up to offset expenses and write-offs from these purchases, spending on this stuff means it takes longer to make a profit—which is how YOU get paid.

Cheap-Cut #4 Do not buy new stuff: Like using the furniture, computer and other equipment you already have, if you do need to buy more things for the business, buy used. Every town I’ve lived in has had used furniture dealers. Nice ones, not just Goodwill or Salvation Army. I have a solid oak legal filing cabinet in my office today that doubles a printer stand. It was a steal since it was used. Only $125. There’s no way I could get one new for that price. The unit is going to last a long time and I didn’t have to go into debt having an organized work space.

Cheap-Cut #5: Look into leasing equipment you have to get new: While this isn’t my favorite way to handle problems, you may have a situation where this is absolutely the smartest way to go. For example, a business that truly needs a high-volume copy machine or other higher-end office equipment, look into a full-service lease and compare it to purchasing. Often the monthly price will be a little bit higher with the advantage that you don’t have to pay extra for service calls and parts.

If you are used to taking care of everything yourself at home, don’t let that mindset trip you up for your BootStrap Start-Up. When a high-ticket item is unavoidable for your new business, ask for lease options. Upgrading is often easier and changing your mind can be a lot less painful.

As you can see, you can spend less in many ways. Learning from others experience will make or break your first start-up. Just be sure to ask questions about all that advice you’re going to get. I encourage you to keep reading, studying and checking your options for the most effective ways to BootStrap Your Start-Up.

Wishing you Success & Heart,

Heidi Sue

Bootstrap StartUp Secret #1

Do you want to start a business of your own? Many people do. The most common reason I hear for this not working out is a person’s financial status. Fortunately, you don’t have to be limited by this in most cases. I have personal, repeat experience starting businesses on a Bootstrap Budget™ with success and income as a result..

You see, a lot of the advice out there is all about telling you how to spend your money. I believe it’s more important to find ways to avoid spending money—you want a thriving business not a money monster eating up your cash and savings.

So how do you create a BootStrap Start-Up? A BootStrap Start-Up uses your existing resources and abilities as the pivot point for a powerful beginning. Instead of requiring lots of new equipment and skills, your best bet for your first business is to start with the thing you already know best.

I’d like to share a person example to illustrate. A number of years ago I started my goofiest business so far. I wanted a business that didn’t involve spending hours at my computer and on the phone.

This new business had to get me out of the house and outdoors. After considering some options, I realized there was no professional pooper scooper business in the county where I lived. So I went for it. Most of my friends thought I was a crazy. I already had a successful consulting practice.

The business was crazy in some ways: how many people will actually volunteer to pick up puppy poo for money? For me, however, specific factors existed to make in perfect and not crazy:

· I had real-world experience as the daughter of a breeder and cleaning up after the dogs was one of my jobs at home until I left for college.

· I needed very little specialized equipment: $25 for the little box shovel and rake, a $2 plastic bucket for bleach water, and a couple bucks for bleach.

· I spent $50 for an introductory membership to an international associate of pooper scoopers

· I knew that I needed and how to get the individual regulations on my own

· I already owned a small pickup truck

· I knew people on the HOA of very expensive neighborhoods who were likely clients

Happily, this kind of slightly off-the-wall business is just the kind of thing you can easily bootstrap into surprising success. The risk is pretty low and the potential is often surprising.

What happened--Are you curious what can be accomplished scooping puppy poo? In three months I had enough clients to make $3,000 extra a month and was interviewing high school kids to help out during the busy summer months.

Best of all in less than a year my only competitor who worked in a couple other counties decided to expand her business and bought out my client list for over 300% of the cost to start the business.

This is a great BootStrap Start-Up Success. I highly recommend this type of business for your maiden voyage into professional independence. Many people find there is a lot to learn along the way. Why not start with something possible, accessible, and with as little risk as possible?

The key to a success BootStrap Start-Up is looking at your existing resources and experience with a different perspective.

What have you done in your life that you’re really good at that might never have been a profession or business for you before?

What physical resources or equipment do you already own that could also serve you in a business capacity?

Do you have unique connections (like mine with the HOAs) that can open doors for you ahead of others?

Most of the people I’ve met have at least two of the three factors. Don’t let your BootStrap Success Factors go unrecognized. Tap them for a business that’s well designed for you and success.

Wishing you Success & Heart,

Heidi Sue