Tuesday, September 29, 2009

Am I too old to start a business?

As America’s 77 million baby boomers begin contemplating retirement, many are finding that slowing down is the last thing they want to do. Indeed, they’re seeking outlets for their experience, energy, and drive that will be personally and financially rewarding, while also providing the flexibility and direction they might not have enjoyed during their previous careers.

Sound a lot like owning a small business? It should.

Statistics show that of the nation’s 10.9 million self-employed workers, the largest category, 25 percent, is boomers aged 45 to 54. In 2006, the number of self-employed persons aged 65 and older totaled 781,000—a 19-percent increase in just six years.

As with entrepreneurship at any other age, a boomer’s entrepreneurial direction has many influences, such as interests, knowledge, location, financial resources, and personality. Some may relish the challenge of building a new business, even to the point of working as many hours as they did before retiring. Others may prefer pursuing an enterprise with more limited hours, allowing them to make the most of that long-awaited leisure time.

Fortunately, there’s a growing range of resources designed to help boomers pursue second careers as entrepreneurs. For example, the self-employed section of AARP’s Web site, www.aarp.org, helps those approaching retirement weigh second career opportunities as consulting and franchise ownership. Mature Resources at www.matureresources.org, an online magazine that covers a wide range of issues related to aging, contains a business section with articles related to over-50 entrepreneurs, as well as a business directory.

Marketing consultant Andrea J. Stenberg has created the baby boomer entrepreneur blog at thebabyboomerentrepreneur.com, which provides small business marketing strategies and motivation aimed at aspiring 40-plus entrepreneurs build new businesses.

Another multifaceted information resource is All Business at www.allbusiness.com, an online service that helps address real-world business questions and presents practical solutions. All Business provides articles and directories for aspiring small business owners, as well as a section dedicated to analyzing boomer marketing and demographic trends. Similarly, the Learning Center page of My New Venture at www.mynewventure.com/learning_center has a section specifically for retirement-bound boomers.

For women eyeing a post-retirement career in small business, the TIP$, or Turning Ideas into Profits, Mid-Life Women’s Business Community offers free information, tools, support and networking opportunities. Their website is www.tipscommunity.com.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, September 22, 2009

Do I need a Disaster Recovery Plan?

Stop for a moment and think about all the time and resources you’ve invested in your small business. Now, imagine that it’s all gone—facilities, equipment, everything. What do you do?

Every year, this hypothetical question becomes very real to thousands of small business owners who suffer losses due to fires, natural disasters, and other events.

Although many potential disasters are unpredictable, a thoughtful, proactive disaster management plan can mitigate their effects on your business, and help speed your return to normal operations. True, disaster planning may not be pleasant to think about, but the consequences of not doing it are far worse.

Here are some tips for developing a disaster management strategy for your small business:

- Identify potential hazards. Consider both natural events (e.g., hurricanes, floods, earthquakes, and ice storms) as well as man-made disasters such as fires, toxic material spills, civil unrest, and terrorism. While your business may not be directly affected, such events could disrupt your utilities, logistics, and supply chains.
- Develop operational contingency plans. Assess the feasibility of operating out of rented office space, a nearby storefront, or even your home, and what equipment/resources will be needed (e.g., computers, data files, inventory). Important documents, back-up copies of computer records and software, and other vital information should be stored in a fireproof container, or at a secure off-site location.
- Ensure the safety of employees and customers. Develop an evacuation plan that includes access to shelters, hospitals, and other emergency services. Keep emergency telephone numbers clearly posted, and maintain up-to-date emergency contact and essential medical information for all employees.
- Perform a safety inventory. Regularly clean and test smoke detectors, and change the batteries at least once a year. Make sure you have well-stocked first-aid kits, fully charged fire extinguishers, and a fresh supply of all types of batteries used in your business. If you have portable generators for emergency power, make sure that the fuel is fresh and safely stored.
- Review your business insurance coverage. At a minimum, your coverage should be enough to get your business back in operation, and cover the replacement cost of essential facilities. Note that most general casualty policies do not cover flood damage, nor may they apply to special tools or equipment. Also consider purchasing business interruption insurance, which can assist with ongoing expenses during a forced shutdown.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, September 15, 2009

Should I use contractors, or hire employees?

Independent contractors are an attractive option for small businesses that don’t have the resources or need for full-time employees. In fact, your small business may be built entirely on serving as an independent contractor to other enterprises.

But before you hire one or more independents, make sure that relationship fits entirely within the IRS’s definition of contract labor, and that both you and your contractors understand the rights and responsibilities of everyone involved.

Deciding who can legitimately work as an independent contractor and who must be given employee status has become a difficult matter for small business owners. You can’t simply choose what’s best for you. The IRS and equivalent state agencies are strict on worker classification issues.

Remember that independent contractors work for themselves. They operate their own business. You are their client, not their employer. You don’t dictate their hours or control how they perform their work. In the eyes of most government agencies, a worker is an employee unless you can prove otherwise.

Contractors control when and where they work. Avoid setting a pattern of daily or weekly work hours dictated by your business. Also, independent contractors do not usually have a permanent or continuing relationship with the business and have time to pursue other clients. Plan to compensate contractors on a per-job basis, not weekly or monthly.

And since contractors are paid to complete a set task, they may bring in others to help, at their discretion and on their payroll. They also should use their own tools and technology and be responsible for their incremental expenses.

Contractors can’t be fired as long as they produce results that meet their contract specifications. Do not include them under any insurance or benefits coverage you have for employees. Independent contractors are subject to making a profit—or suffering a loss—based on their own skills and expertise. Always require an invoice before making payment.

Understanding the requirements of using independent contractors will help you better determine whether such relationships are right for your current business needs, or if you need to hire them as employees. Also make sure your contractors understand the rights and responsibilities involved as well. This will help prevent misunderstandings and potentially costly disputes over benefits and compensation.

Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Wednesday, September 9, 2009

Is it time to buy a new computer?

Computer technology changes so quickly, it almost seems like today’s state-of-the-art today might well be obsolete. Though few small business owners can afford to be on the “bleeding edge” of PC technology, they also don’t want to compromise their employees’ productivity with seemingly outmoded machines. As a result, they find themselves making periodic purchases of new hardware while the old machines pile up in a closet or corner.

Don’t consign those old PCs to the scrap heap just yet. There may be several some ways you to coax more productivity out of what you already own, saving your business some money and easing the burden on the local landfill.

PCs you own may have plenty of life left in them. But to get them in top shape can require a little attention. The longer a computer is used, the messier its hard drive can get. Viruses, outdated software, fragmented storage space and general clutter can turn a good piece of equipment into a real slowpoke.

To get your slightly worn PCs and laptops back in action, follow these tune-up tips.

Remove old programs, temporary files and the Web browser’s cache, cookies and history. Empty the trash folder, and while you’re at it, clean the keyboard. Use your disk utilities to scan the hard drive for errors, fix any corrupt sectors and remove invalid registry entries or broken shortcuts.

Also defragment the hard drive. A hard drive is composed of many sections, known as sectors. As files are saved, they are often divided into parts that are scattered across the drive. This slows down the system because the file must be retrieved from different locations. Defragmenting brings the pieces back together again.

Scan the computer for viruses and update virus definitions. There are several excellent companies that offer a full range of antivirus, anti-spam and problem solving PC solutions.

Even with your best efforts, long-used computers may still suffer breakdowns—often when you need them the most. That’s why it’s also important to routinely back-up data on to a separate storage medium (e.g., CD, Zip drives, etc.) and keep it in a secure area. That will prevent your business from being crippled from a crashed PC.


Richard Strug
Greater Princeton Area SCORE (Chapter 631)
Serving Mercer and Middlesex Counties

Tuesday, September 1, 2009

Is there a market for my new business idea?

If you’re thinking about starting a business, most likely you have dreamed of one that revolves around your interests. But what does the market need or want? Are you noticing trends in what people are buying, or how and where they are buying those goods?

Determining the marketability of your start-up business is typically done in the context of creating a business plan and performing an analysis of your competition. It is a multifaceted exercise, requiring research you may not have done so far. Here are some areas of inquiry to help you explore marketability.

Consider whether the business offers a new solution to an old problem or complements an emerging trend. The untapped markets that are profitable to tap into are few and far between. They’re also riskier.

Have a clear picture of your target market. These are the people and other companies that are likely to want or need what your business has to offer. “All restaurants” is a broader market than “fast food joints.” “All restaurant patrons” is a broader market than “senior citizens who eat out.”

Understand the benefits that your product or service offers. Can you quantify them? (In other words, how much money might a customer save by buying from your company instead of someone else?) Knowing these benefits will help you generate ideas for future promotions.

Examine industry data that can confirm whether there is a sustained, preferably growing demand for your product or service. (Keep in mind this data is sales driven, not marketing driven.) Have you tapped all likely sources of industry data, such as trade associations and government agencies?

Identify the percentage of market share that it is realistic for you to capture. The more competition you have, the lower the margins will be.

Consider how realistic your pricing is. How can you present your product or service to potential customers so that it appears to be a good value, while still affording you a healthy profit?

You may find that you don’t like the answers you’re getting to your market research. But if you’re committed to creating a viable business that can provide you with a good income, the sooner you know the answers to these questions the faster you can make a course correction to succeed.


Richard Strug
Greater Princeton Area SCORE
Serving Mercer and Middlesex Counties