The Ms. CEO Show

Hello Felicia,

I wanted to thank you for your show.  It’s such a blessing to have access to people like you.  I know you are focusing on how to trim costs during this time.  I’ve also heard that during hard times is the best time to start a business.  With the interest rates being generally low, do you recommend new entrepreneurs look for standard loans from the SBA or seek angel investing if the initial investment is less than $200,000?

D. Johnson
USA
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Dear D,

Thanks for the questions!  It’s a blessing to make a difference in the lives of my fellow entrepreneurs so thanks for this opportunity! 

You are correct.  Now is the very best time to start a business.  For a ton of reasons.  Here are three: First: You’ll be more focused.  Everyone is so fearful and cautious these days that this will force you to be crystal clear about your business purpose and communicating that to your potential customers because nobody is spending money these days unless they understand what you are selling and how it benefits them. 

Two: Everything is cheap (or cheaper)!  This includes all the supplies you’ll need, labor, advertising, equipment and money!  Retailers, bankers and businesses are hurting and they are more willing to make a deal with someone with a clear business plan and the willingness to buy. 

Three, and perhaps most important for an entrepreneur with the heart, mind and strategy of a champion: Your competition is running scared.  Fear (the opposite of greed, which is what got us into all of this mess) is paralyzing alot of people.  Be calculated.  Be cautious.  But be bold because the run to the end zone of entrepreneurial success is wide open with so many people running for cover!

With regard to the second part of your question about whether to seek money from the SBA or an angel investor, do both.  In fact, get money from every source that you can (cheap money only—there is no reason to pay ridiculous interest rates right now).  Use the money wisely.  Don’t blow it on all the pretty stuff that people think they need when starting a business, that really are money and time wasters (like a flashy website and brochures).  Use the money to market your business aggressively and sell more of whatever you are selling so that you can bring in more money.  Your goal should be to have every dollar spent bring you 3 or more dollars back.  Sit on as much of the money as you can so that you always have enough to keep moving forward but don’t skimp on marketing.  Once you have your business plan, a basic website, cards and a business phone number, build, build, build your business and never look back! (Caution: If appealing to angel investors becomes a full-time job and you have other money to get started, go ahead and launch your business and drive hard everyday at bringing in revenue. Investors are more impressed if you come to the table with more accomplished than simply a hat in hand and a request for money.)

Check back in if you have more questions and best to you in the New Year!

Successfully Yours,
Felicia Joy

Dear Ms.CEO,

This has been a year of accomplishments for me. In the world of academia I completed my Masters Degree in Human Resources Management—and professionally, I completed my employer’s leadership/management program facilitated by a local university.  Now I am ready for another venture in my life.  I have talked in the past about starting my own company.  I would like to combine my law enforcement expertise with my HR background by starting a niche staffing company.
 
I need insight on how I can get started with a venture such as this.  I know I would probably start at home but what should I do first?  Thanks for any insight you can give.

Lisa
Atlanta, GA
12/23/08
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Dear Lisa,

Woooo! Congratulations on aggressively pursuing your goals, I love it! And you have the energy of the Energizer bunny because after all that you have already accomplished, you are ready to jump right in with a new business. Great! You are creating momentum and that will serve you well as you get your new venture off the ground. This is what it’s all about and this is why Ms.CEO exists!

I’ll share with you the first five things you should do and then you can always email for more insight. I have found this to be a less overwhelming approach than trying to give you a list of 20 things, for example, that you should do (smile)!  (By the way, you are exactly right to operate from home—low overhead!)

So, first five things:

1. Write a business plan and write it yourself.  I once hired a company to write a business plan for me.  That was a distrastous waste of money.  Hiring someone to read and carefully edit your business plan once you’ve put it together is fine but definitely write a business plan and definitely write it yourself.  This will help you get crystal clear about the size of your market (i.e. the number of customers available to you) and how you are going to roll out your company.  And please note the word “how”.  The most important parts of your business plan will be your sales and marketing section (what you are going to do to let potential customers know you exist and how you are going to make money from them once they know about you) and your business finances.  The U.S. Small Business Administration offers great tools to help you get this done. 
2. Form a legal business entity through your Secretary of State’s Office.  In your case, it’s the Georgia Secretary of State and you can file online for $100.
3. Next, get your Employer Identification Number from the IRS, which you can file online at no cost; and then open a business bank account, which you can usually open with $100 or less. 
4. Next, get a website address for less than $10 per year through 1and1.com, godaddy.com, or Register.com.  As far as the design, you can find someone to create a simple and clean design for you at the price you would like to pay on talent marketplaces like Guru, Elance, and ODesk, where you post your project and freelance professionals bid to do the work within the price range that you set.  A word of caution: Keep your website simple.  Avoid flash and all the bells and whistles.  Search engines like Google don’t read flash and usability tests have shown that web surfers actually prefer clean looking sites with crisp simple photos and well written content more than they care about your site looking like a blockbuster movie trailer.  You should also definitely post a profile for your business on LinkedIn, which is an accepted social networking tool for professionals and entrepreneurs.
5. Last but not least, order business cards, start marketing and go make money!  This is an important step but do you know it’s one that many entrepreneurs never take?  Many entrepreneurs spend a lot of time “getting ready to get ready”.  In other words, ordering supplies for their business.  Ordering print materials.  And doing alot of other things that may be helpful but that are not critically important.  To get money rolling into your business all you need is a way for people to contact you (phone and email) and you need as many people as possible in your target market (the people who would buy your service) to know about you. 

Take these five steps and you’ll be well on your way!  Drop us a line if you need more help and let me know how it’s going. 

Oh yeah, here’s a bonus step, go join the Make Mine A Million $ Business RACE where you can get help to build your business to a specific goal (all the way up to $1,000,000) and get a chance to win $100,000 and other great prizes!

Best to you,
Felicia Joy
A Business Woman’s Best Friend

Dear Ms. CEO,

Earlier this year my family and I started a truck driving school in Atlanta and the response has been great. Our prices are lower than all the other schools, the government agency that oversees driving schools has visited ours several times and says it is the best facility in the state, and our school currently has the highest number of graduating students who pass their commercial driving test the first time. We are happy about the success of the business but we’ve got one problem. We need more students! I’m sure some of the slow down in our registrations is due to the holidays and the end of the year but we’re not waiting around for things to pick up—that’s why I’m reaching out to you. Trucking companies desperately need drivers and people desperately need jobs and we can provide the training but we need to get to the students. We have signs, a website, hats, stickers, t-shirts, open houses and job fairs and we’re getting some results but we’d like to see more. Should we break down and hire a marketing firm—which so far looks like it’s going to be very expensive—or is there something else we can do to find students?

-Misty in Atlanta
12/17/08
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Dear Misty,

Congratulations on launching a new business and finding great success right away! Sounds like things are trucking along (pun intended — ha!) but that you want to make sure it stays that way. I like your proactive approach. Well, there are a lot of things I could say but I’ll start with a couple things that may seem super simple but they work like a charm. First, the best way to find new customers is to ask your current ones! Ask students who attend the school now or who have attended the school in the past how they heard about you. This will let you know where and how to reach out to new prospective students. And you may even want to start a referral program. Maybe you can pay $50 for every student referred who completes the program.

The other resource I would suggest using is Craigslist. OMG! Post at your own risk. I mean this in a good way. Every time I have posted jobs on Craigslist I get a flood of applicants. It used to be free but now costs $25. Not a lot of money at all for such a tremendous response.

As an aside: There are many marketing tactics you could use and I’m sure you will think of more. Always find a way to track the various tools and tactics you use so you can put more money and effort into the ones that are working and ditch the ones that are not. To track, use different “reply-to” mechanisms such as unique website addresses, emails, or phone numbers or names of people to ask for—when you get a lot of emails to an address or a lot of people calling asking for “Betty Jo”, well then you know you’ve got a winner. Best of luck to you in business!

-Ms. CEO