From One Business Person to Another
Inside Your Money
July, 2007 - Issue #33
Anyone who has ever tried it will tell you that starting your own business is a scary proposition. Most waged their own private war with doubt.

Am I doing the right thing? I know I have a valuable service, but how do I let the community know about it? Is there a niche for my business here in Santa Clarita?

Those are fair questions - questions every local budding entrepreneur and businesses owner should ask, must ask, really. And they do.

The real challenge in launching a successful business in this or any other town, however, lies in answering the questions you didn't even think to ask in the first place - questions only an experienced business professional would know are important.

If you're considering a business startup of you own, the best advice I can offer is to go get some good advice. Talk to business owners who have earned their stripes. They carry a wealth of knowledge and experience and (this may surprise you) most are willing to share what they've learned.

Wendy Collins, an insurance agent for State Farm, developed a successful model for building her business. One key, she says, is establishing and maintaining a high community profile. That takes work, but it's a powerful way to build a client base, a worthwhile investment for any business.

"I found being a participant in community activities introduced me to a diversity of local business owners," Collins says. "These contacts were integral to introducing me to local resources. I also found volunteering my time and being involved in service groups introduced me to local businesses members who could offer expertise and wisdom with growing a business in Santa Clarita."

Budding business owners would do well to consider the proper structure for business, as well. Will you need employees? Will you offer benefits? What about insuring your company?

"If you're considering a business startup of you own, the best advice I can offer is to go GET SOME GOOD ADVICE."
Kenny Rice of Total Financial Solutions offers the following five steps:

1. Consider pre-taxing some portions of your employee benefits package. It can provide significant payroll tax savings and help offset medical insurance costs.

2. Incorporate to provide for tax advantages, privacy and protection.

3. Buy an inexpensive umbrella liability insurance policy to protect your business against lawsuit predators and on-site accidents.

4. Work with a marketing professional who can help you brand your business in a way that makes it unique.

5. Take a small business workshop; the learning process is never done!

Something else you should consider is cash flow. It's obvious, I know. But you'd be surprised how many businesses fail because they ran out of money. Actually, that's the reason all businesses fail.

The idea is to stay afloat by leveraging your busy months against the slow months. Expect more slow months in the beginning, and plan accordingly. And even as your business matures and your slow periods shrink, never forget the importance of cash flow.

Plan for a feast but prepare for a famine. That's the best way to make sure you never go hungry.

Vlad Victorio, senior vice-president of specialized lending at Mission Valley Bank, sums up his plan for budding business owners this way. "First, have a plan and set your goals," he says. "Next, make sure that you are properly capitalized, then get a good banker, a good CPA and a good attorney - this is your financial team and the good ones act as partners to your success. Finally, network, network, network!"

William Sloan, the Santa Clarita Valley regional president for California United Bank, believes that new business owners should ask themselves a basic question. "Before determining what products or services to provide, the question is not, 'What do I want to sell?' but 'What will others want to buy?'"

Sloan continues, "The smart businessperson chooses not just a bank, but also a banker. Look for a banker you're comfortable talking with, one with whom you can have open dialogue, one whose background and experience allows him or her to understand your business. A banker who "gets it" - from your perspective - is usually the one who is going to be of the most assistance."

At the end of the day, business people are still people. "Always maintain a balance between business and personal life. Entrepreneurs and small business owners are more likely to face burnout than are those within larger corporations with support systems and a cadre of people to assume smaller tasks. Time to think, to vacation and to be with family and friends are irreplaceable commodities," says Sloan.
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