F-1 students are allowed to work in the United States, but only under certain conditions issued by the United States Citizenship and Immigration Service (USCIS).  An F-1 student who has approval to work during their academic program must maintain a full course load at all times.  The student may work up to 20 hours per week for the university during the academic year or work full-time for the university during campus breaks and vacation if enrolling for the upcoming semester.  The International Student and Scholars Office may have additional requirements that could restrict employment and what types of jobs that student can hold.

An F-1 student may be eligible for Curricular Practical Training (CPT), which is an internship or practicum that is directly related to the student’s major course of study.  CPT must be an integral part of the student’s established curriculum.  CPT cannot be used for self-employment.  CPT must be recommended by the student’s academic advisor and authorized in writing by a Designated School Official.  Generally, students are only eligible for CPT after completing one full academic year of full time enrollment and only students who are maintaining status are eligible for CPT.

An F-1 student wanting to start a business that is directly related to his/her major area of study may be eligible for Optional Practical Training (OPT).   An F-1 student may be authorized for up to 12 months of full-time OPT after the completion of their academic program, and becomes eligible for another 12 months of OPT when he or she seeks another post-secondary degree at a higher degree level.  An F-1 student with a qualifying Science, Technology, Engineering or Mathematics (STEM) degree may apply for a 17-month extension of their post-completion OPT, maximum one STEM extension per lifetime.

U.S. Citizenship and Immigration Services (USCIS) is the government agency that oversees immigration to the United States.  USCIS seeks to secure America’s promise as a nation of immigrants by providing accurate and useful information to our customers, granting immigration and citizenship benefits, and ensuring the integrity of our immigration system.

The H-1B visa may be an option for the individual planning to work for the business s/he starts in an occupation that normally requires a bachelor’s degree or higher in a related field of study (e.g., engineers, scientists or mathematicians), and that individual has at least a bachelor’s degree or equivalent in a field related to the position.  Initial period of stay in the United States can be up to 3 years. Extensions are possible in up to 3 year increments. Maximum period of stay generally is 6 years (extensions beyond 6 years may be possible).

The O-1A visa is for individuals who have extraordinary ability in the sciences, arts, education, business or athletics, which can be demonstrated by sustained acclaim and recognition, and that person will be coming to the United States to start a business in that specific field. Extraordinary ability means a level of expertise indicating that the individual is one of the small percentage of people who have risen to the very top of that field.  Initial period of stay in the United States can be up to 3 years. This may be extended or renewed in 1 year increments as necessary to complete or further the event or activity.

According to the US Department of State, Bureau of Consular Affairs, the Treaty Trader (E-1) or Treaty Investor (E-2) visa is for a national of a country with which the United States (U.S.) maintains a treaty of commerce and navigation who is coming to the U.S. to carry on substantial trade, including trade in services or technology, principally between the U.S. and the treaty country, or to develop and direct the operations of an enterprise in which the national has invested, or is in the process of investing a substantial amount of capital, under the provisions of the Immigration and Nationality Act.  [Treaty countries include:  Argentina, Armenia, Australia, Austria, Bangladesh, Belgium, Bulgaria, Cameroon, Canada, Colombia, Costa Rica, Czech Republic, Democratic Republic of the Congo, Ecuador, Egypt, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Ireland, Italy, Jamaica, Japan, Kazakhstan, Korea, Kyrgyzstan, Liberia, Luxembourg, Mexico, Moldova, Mongolia, Morocco, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Republic of Congo, Romania, Senegal, Slovak Republic, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Ukraine, United Kingdom, and Yugoslavia.]

Treaty trader applicants must meet specific requirements to qualify for a treaty trader (E-1) visa under immigration law. The consular officer will determine whether a treaty trader applicant qualifies for a visa.

• The applicant must be a national of a treaty country.
• The trading firm for which the applicant is coming to the U. S. must have the nationality of the treaty country.
• The international trade must be “substantial” in the sense that there is a sizable and continuing volume of trade.
• The trade must be principally between the U.S. and the treaty country, which is defined to mean that more than 50 percent of the international trade involved must be between the U.S. and the country of the applicant’s nationality.
• Trade means the international exchange of goods, services, and technology. Title of the trade items must pass from one party to the other.
• The applicant must be employed in a supervisory or executive capacity, or possess highly specialized skills essential to the efficient operation of the firm. Ordinary skilled or unskilled workers do not qualify.

Treaty investor applicants must meet specific requirements to qualify for a treaty investor (E-2) visa under immigration law. The consular officer will determine whether a treaty investor applicant qualifies for a visa.

• The investor, either a real or corporate person, must be a national of a treaty country.
• The investment must be substantial. It must be sufficient to ensure the successful operation of the enterprise. The percentage of investment for a low-cost business enterprise must be higher than the percentage of investment in a high-cost enterprise.
• The investment must be a real operating enterprise. Speculative or idle investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment.
• The investment may not be marginal. It must generate significantly more income than just to provide a living to the investor and family, or it must have a significant economic impact in the U.S.
• The investor must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise are not allowed.
• The investor must be coming to the U.S. to develop and direct the enterprise. If the applicant is not the principal investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.
• The initial period of stay in the United States can be up to 2 years.  This may be extended or renewed in 2 year increments.

As with any information, immigration law should be left to the experts.  For any questions about visas and remaining in the United States, it is highly recommended that you consult an attorney who specializes in immigration law.

Susan Davis is the Director of the Hoosier Heartland ISBDC. Susan can be reached at sdavis@isbdc.org.

Mary Popovich

During our feasibility discussion in the ISBDC’s “Launching Your Own Business” workshop, we stress the importance of having buy-in from a spouse or “significant other” when an individual is considering embarking on an entrepreneurial journey. We share with entrepreneurs the reality that if the spouse is not supportive of your idea, there’s a possibility that one big part of your life may fail—either your marriage or your business. Only you can decide if it’s worth taking the risk.

Risk-taking and the resulting consequences involve change, one of the contributing factors of marital stress. Starting a business can drain the family’s bank account, require working long hours away from home, and change your lifestyle when vacations and health insurance are temporarily lost to a start-up business.  Stress can lead to disagreements that can lead to separation and divorce. While there are no statistics tracking business start-ups as a direct cause of divorce, we all know that it can and does happen. Articles have been written about “Why So Many Entrepreneurs Get Divorced” and about “The Link Between Entrepreneurship and Divorce,” making the possibility seem even more real.

COMMUNICATION IS KEY

To better assess the situation and obtain practical suggestions for alleviating potential marital problems related to entrepreneurship, we asked some of our successful ISBDC clients to share memories and lessons learned from their pre-venture and early business days. One client, who prefers to remain anonymous, intimated that he invested most of his family’s retirement savings to become co-owner of a business while his wife was out of state on vacation and without consulting her first. Needless to say, his wife’s initial reaction was not pleasant; but luckily for him, she grew to accept the idea and even helped him out with the business once she got past the initial shock. In looking back, he believes communication is the key to resolving conflicts related to starting or growing a business, pointing out that “Growing a start-up business is a high risk requiring 24/7 attention and time away from the family.” But, he believes you can get through it as long as you, “Keep partners, spouses and others close and involved.” In other words, he recommends that you “Don’t do as I did, but do as I say.”

Other Hoosier entrepreneurs interviewed for this blog say that, unlike some of their friends, they were fortunate to have their spouses’ support when starting their businesses. “My husband was always onboard and positive about starting this business. When I would feel stressed about things or question if this was the right decision, he would motivate me to move forward. A lot of the times we would look at the big picture and the potential (for success) to see us through some difficult questions or situations,” said one entrepreneur whose husband got behind her and even partnered with her on the business after she shared her vision with him. She goes on to say that, “It’s almost impossible for me to imagine having this business on my own. My husband and I are a team and almost always on the same page, when it comes to business decisions.  We complement each other and are equally ready to take risks. We have worked hard and are starting to see the light at the end of the tunnel.”

COMMON PROBLEMS

Even with a supportive spouse or partner, most of the clients interviewed agreed that there are still problems to deal with. Some of the business owners mentioned the lack of health insurance or the high cost of purchasing their own health insurance as causes of distress. “Our health has been shaky due to no health insurance, but that’s not the worst of it,” stated a now-successful businesswoman who confided that she and her husband actually lost their house and their good credit standing due to putting all their personal resources into the business. But in looking back, she now believes it was all worth it, and that if you persevere, things can be made good again.  As her business grows, she said “It’s all turning around.” She noted that her company can now afford health insurance for her family and her employees and that she is working on re-building their credit score—something that will just take time, combined with continued business success—to restore.

In addition to problems related to health insurance (or the lack thereof), other stressors include time management and the great amount of energy required to run a business. One of the business owners mentioned the long hours involved and “sometimes not even taking time to sleep!” A couple of individuals talked about the sacrifices their families made for the good of the business, including skipping  vacations, scaling back on gifts, putting off making major purchases and even “making do” without the essential items from time to time. These sacrifices can create animosity with an unsympathetic spouse, and “the stress definitely trickles down to everyone,” one of the entrepreneurs observed.

SOUND ADVICE

To get down to the heart of the matter, we presented all the interviewed business owners with a hypothetical situation: “If a close friend confided he or she wanted to open a business, but that his or her spouse was not supportive of the idea, what would you recommend?” Not surprisingly, this question produced mixed responses. One businessman said he would advise his friend to go ahead and start the business, but be willing to compromise with the spouse. Another suggested the friend “take the risk (because) it’s worth it if you believe in yourself and your product and have done the research.” And a third entrepreneur advised proceeding with caution: “Starting a business is such a roller coaster—I think it would really doom a relationship without support. I wouldn’t say hang it up, but negotiate the idea and lay out your case.”

A couple of other entrepreneurs, however, were not so encouraging. “I would tell the person not to start the business. . . . My hunch is that if one spouse discourages the other from starting a business, desired support is supplanted by indifference at best and antagonism and sabotage at worst.  When that occurs, the business and the relationship suffer,” said one.  Another pointed out that “Starting a business requires dedication, drive, determination, planning, sacrifice, and money,” and warned that “If you are serious about your marriage and you don’t have both parties on board and supportive, the marriage and/or the business will fail.”

IMPACT ON FAMILY

So, now that you’ve heard both sides of the discussion— the pluses and minuses of starting a business with or without the support of your spouse, how will you make your decision? If you are still confused, you are not alone.  In 2003, Howard E. Aldrich from the Department of Sociology at the University of North Carolina, and Jennifer E. Clift, a member of the business faculty for the University of Alberta in Edmonton, wrote an abstract about The Pervasive Effects of Family on Entrepreneurship. Their contention is that whereas “Families and businesses have often been treated as naturally separate institutions . . . we argue that they are inextricably intertwined,” and they suggest that “entrepreneurship scholars would benefit from a family embeddedness perspective on new venture creation.” They raise some pertinent questions not only about the family’s influence on a start-up business, but also about the impact of new ventures on the family unit.  One of the questions they raise is whether or not “new venture failure or success play(s) a role in family system transitions such as divorce.” They recommend that rigorous studies be undertaken to address these questions; but until then, there are no scholarly answers that we are aware of.

THE DECISION IS YOURS

Which way to go, which way to turn— should you pursue that business dream or hang it up?  We recommend that before you take the plunge to start your business, it may be worth reading a few online articles that offer suggestions on improving the dynamics between the spouse, the family and the entrepreneur:

• Fresh Ideas: 10 Ways to Win Over an Unsupportive Family as a Young Entrepreneur
• Family Support is Paramount
• Your Marriage IS Your Business
• Help! I’m an Entrepreneur and My Family Doesn’t Support Me

Making a decision to start a business is never easy, but it helps to have all the information in front of you so you can make an educated decision. Visit the Indiana Small Business Development Center in your region and enroll in a workshop on “Launching Your Own Business.” Take a look at your available resources and your qualifications to operate the business, and do a lot of soul searching. Evaluate the pluses and minuses of having your own company, write a business plan, and then reach out to your spouse to get his or her feedback and buy-in. Your spouse’s support can mean the difference between success and failure . . . not only in your business, but also in your life.

Mary Popovich is a Business Advisor and Marketing Coordinator for the Northeast ISBDC. Mary can be reached at mpopovich@isbdc.org.

Risk It: Indiana will be in Madison, Indiana on August 28, 2013 at the Venture Out Business Center. We have an open call for submissions of ideas or inventions for a chance to win $4,000 in prizes and donations.  Seven to ten brave competitors will be given 5 minutes to pitch their idea to 4 judges and an audience of close to 100 people.

Last year, we had seven competitors from inventions to cartoon characters for school age children and we hope to have the same variety this year. The audience was made up of lenders, angel investors, elected officials and the general public. You can submit your pitch online at http://www.riskitindiana.org/enter-your-idea/.

Kathy Davis

Most of the time, the owner in question says something along the lines of “No, its just me. I don’t need that.”

The other common scenario I hear, over and over again, is “I just downloaded my contracts from the internet when I started. Do you think it covers __________?”

With the availability of many online legal services, prepaid legal plans and a number of self-help sites, it’s easy to think that you can do it all yourself. But what if you need a more customized approach? How do you know?

Here are five things a lawyer can tell you, that you might or might not find the right answer to on the Internet:

1. If your corporation or LLC has all of the paperwork and agreements in place to protect you from personal liability for actions of the business
2. If your corporation or LLC is the recommended structure for your business
3. Are your contracts binding in your state?
4. Do your contracts protect or even enhance your cash flow?
5. Are your ideas properly protected?  Or can a competitor sweep in a steal your catchy slogan, graphics, process or technology?

Finding the right person to help you can be daunting. Ask for referrals – from the ISBDC, from your banker, from your real estate agent or leasing agent, from your professional association, from a trusted colleague or mentor.

Decide if you want to work with the lawyer. These are some good questions to ask:

1. How are you going to take care of my case?  

You aren’t looking for a guarantee of an outcome. What you are looking for is a definitive understanding of what your questions and needs are and what the attorney’s plan is to address it.

2. What is the best way to reach you?

Phone? Cell Phone? Email?

3.  Who returns your calls?  How long does it usually take?

This lets you know if you will mainly be talking to an assistant, junior associate or paralegal, or the attorney personally. The time question lets you know if you should expect a call the same business day, or the next, or just within the same week.

4. How do you charge?

You need to know up front on this one: hourly? flat fee? contingency? Is there a retainer? The attorney needs to address the details of payment with you in the first meeting. The last thing you want is to form a relationship with a $500/hour attorney — and then realize there is no way on this earth you will ever be able to afford him.

5. Why did you decide to become a lawyer?

This one will tell you a lot about the person you are hiring to help you in your business. The lawyer’s reasons don’t need to resonate with you as the client. But they do give you insight in to the motivations of your attorney, why they do what they do, and possibly even some of the best ways to communicate with them.

Kathy Davis is an attorney, and owner of KJD Legal LLC in Brownsburg.  Kathy focuses her practice in the areas of business and real estate.  She operates a virtual law office, which is accessible through her website, kjdlegal.com.  Kathy can be reached at 317-721-5290 or at kathy@kjdlegal.com.

Wes Shie

There are risks associated with any type of financing. Whether a potential business owner finances the startup of a new business with a conventional business loan or with a personal loan, that business owner needs to understand the risk of the situation. Once these risk factors are taken into account, there are several reasons why an entrepreneur may want to fund startup costs with personal debt versus a conventional business loan. A personal loan may benefit the entrepreneur from the standpoint of availability, cost, and timing.

Availability:  Many banks are reluctant to lend to startup companies. Even potential business owners with a thorough business plan might have difficulty receiving startup cash. Many times, a small unsecured personal loan can be easier for an entrepreneur to secure than a conventional business loan. A quality credit score can lead to better lending terms and potentially give a person enough money to buy basic equipment for small business.

Cost:  A personal loan can many times be less expensive than a conventional business loan. We all currently live in a world of historically low interest rates. An individual with a good credit score can probably get a lower rate on a home equity loan, for example, than any type of business financing. Personal credit cards bring a whole different amount of risk to what is described above. While personal credit cards still provide the availability that a conventional business loan might not, credit cards might not provide cost savings as detailed above as some credit card rates may be higher than personal loan rates (likewise, loans against 401(k) dollars and retirement funds also can provide a different set of risk).

Timing:  Most of the time a personal loan is not only the cheapest but also the quickest way for an entrepreneur to access cash. Whereas some conventional business loan decisions can include a lengthy approval process or a tedious underwriting process, many personal loan decisions are made the same day and sometimes within hours. An individual can get an answer on a home equity loan or line of credit, for example, in afternoon. Additionally, there are times when a financial institution will require personal assets (such as a home) as additional collateral to back up a conventional business loan. If a conventional business loan (or an enhancement like utilizing a SBA program) requires a personal residence as collateral, why not just use the equity in the residence to take out a personal loan (which as stated be above will probably be at a lower cost and completed in a shorter amount of time)?

If you are starting a business with any kind of financing, you need to be aware of the risks involved.  Once you weigh the risks and have completed your proper due diligence, you may realize that personal availability to credit is your best option in gaining the funds to start that business.

Wes Shie is a Business Advisor who works with the Northeast ISBDC. Wes can be reached at wshie@isbdc.org.

Tom Steiner – Thousands of articles have been written on this subject, seminars held everywhere, the internet wants you to purchase online books about it, consultants want you to spend a lot of money for their expertise about it, and they all tell you the same thing differently. There are as many ways to learn about your customers as there are recipes for chocolate chip cookies. However, in the end, it is your business that is more like chocolate chip cookies. Your customers have choices and if they don’t like your cookies, they will find a recipe they like.

As a side note, Google found 5,190,000 results in .17 seconds for chocolate chip cookie recipes.

So, if your cookies are not what the customer is looking for, how do you find the customers that do want your cookies?

As a Business Advisor, I have talked with many clients about their customers. The conversation usually goes like this:

BA: What kind of business are you starting?

Client: I am going to sell a UFO detector. For $94.95, you can have this UFO Detector on your desk. It monitors the area for any “magnetic and electromagnetic anomalies” and, if it does detect said anomalies, it goes off like crazy. Because that means aliens are approaching.

BA: And who are your customers?

Client: Everybody.

BA: Everybody? What about those that do not believe in UFOs or those that think the product is a hoax? My wife would not let me buy one.

Client: Ah, I was thinking of producing an infomercial…

The question is, “How do you begin to understand and find your clients?”

Customers are defined in many different ways. Most people define their customer profile at the top levels. They are gender, age, geographical location, income, education, race, and marital status. All of this information can be found on the US census website. It is always a good place to start. It is a bad place to stop. This top level information is only the beginning. You need more.

A good example where this information falls short is the income category. Ask yourself, “Where does the income come from?” Income can come from a variety of sources. Two people may make $35,000 a year but one may have a college education and work in an office while the other never went to college and is a plumber. Both make the same amount but may have entirely different spending habits. Now ask yourself, “is my customer a plumber or an office worker?”

Drill down.

If you understand your product and the needs it fills, you may have a pretty good idea as to who your customers are. You just need more information about them. The ISBDC has resources that will help you develop a definition of your customers beyond what the census can provide for you. With regards to knowing and finding your customers, here is a small list of the information that is available to you:

• Household Budget Expenditures
• Medical Expenditures
• Recreation Expenditures
• Pets and Products Market Potential
• Disposable Income Profile
• Retail Goods and Services Expenditures
• And lots more

In addition the ISBDC can also help determine the geographical area your customers live in as well as give you an accurate personality of the potential customer.

By drilling down you can start to see a more complete picture of the customer and this will help bring them to your business and sell to them. By understanding their background, you learn several things. You learn if your customer lives in your geographical area. If they do, how many actually purchase from you as well as how many could be purchasing from you. Knowing this helps you develop strong financial projections, marketing analysis and strategy.

By learning as much as you can, you will know what to say to your potential customers, where they are and how to reach them. This is called target marketing and it takes less time, money and effort to reach your customers. Every marketing expert agrees that you need to do target marketing and not take the shotgun approach.

So, you have taken my sage advice, done your homework and have determined who your customer is, how to reach them, and what to say to them. Are you done? Of course not. Once they are in the door, customer service, product quality, environment all help to enhance the customer experience. But are they buying? Here is where you need to do more detective work and it can only be done while the customer is in your store.

What can you learn about your customer once they are in the store? Here are some customer personalities that you can only experience firsthand:

The Child believes everything you tell them. They are trusting and open because they are looking for someone to tell them what they need and want.

The Judge walks in suspicious of everyone. He believes that all salespeople are evil and will say anything to make a sale. They judge you by their value system. They prefer you listen while they talk.

The Negotiator will try to beat you down on price no matter what. However, one thing in your favor is that they will ask a lot of questions and listen to your answers before ever discussing the price.

The Bargain Hunter is very much like the Negotiator in that they are motivated by price. The difference between the two is that the Bargain Hunter is more likely to make impulsive decisions.

Is that it? Nope.

After being in business awhile you will discover trends or types of customers that visit you. After a while you will be able to recognize these types of customer and develop sales strategies to increase your chances of them making a purchase.

Loyal Customers are about 20% of you customer base. They may make up more than 50% of your sales. Let them know how much they are valued. Get to know them personally and make them feel that you appreciate their business.

Discount Customers shop a lot but are only looking for mark downs, sales, or the cheapest price. They can contribute to your bottom line because it usually means product turnover.

Need Based Customers are looking for a specific thing. They look for what they want, purchase it and leave. Sometimes they are looking for the lowest price. Needs Based Customers can be converted to Loyal Customers with customer service that respects their purchasing style.

Wandering Customers are just looking for a place to visit. They may or may not have a purchase in mind. In fact, they may be there just to browse. Be aware, even though they may not purchase anything, Wandering Customers are more likely to talk about their experience in your business.  There is such a thing as minimal great customer service.

Is that it? Nope. Learning about your customers is an ongoing process. Keep in touch with the customers. Look for changes in spending behaviors, and be interactive with your customers. People change and you need to keep up with what is going on with your customers. After all, it is your job to make sure you meet your customers’ needs, wants and desires.

Tom Steiner is a Business Advisor for the East Central ISBDC. Tom can be reached at tsteiner@isbdc.org.

In order to buy a successful business and keep it successful after the transition, here are a few things to consider:

• Plan Before You Purchase – I understand that one of the appeals of an existing business is that it is already structured, however, your skill set and experience needs to be taken into account. You still need to think through the business extensively. Some planning pieces to consider:
  • Tentative Buy-Sell Agreement – You cannot effectively plan for the business unless you have this information. I would suggest paying particular attention to the purchase price and assets included.
  • Appraisal – You will need an appraisal done on all land/property, but you may be required to have a full business appraisal done in order to justify the purchase price to a bank.
  • Analyze Existing Financials – You need to see the current business performance financial statements. This would include the last three years tax returns, year-end balance statements and monthly profit and loss statements for the last three years. You also need to see a detailed list of the existing assets including inventory, equipment and land/property.
  • Business Plan – You need to write a business plan so that you have gone through all of the pertinent information and fully understand the business, industry and market you are purchasing. There is no easier way of doing that analysis than by writing a business plan.
  • Three Year Financial Projections – This is important so that you have a long-term budget and know that the business can be successful under your direction. You can use the existing financials to make these projections to see if you can make enough money with the business to pay for the debt you need to take out in order to meet the purchase price in the Buy-Sell.
  • Find Financing – There are many different ways to structure financing to purchase an existing business.
    • Traditional Bank Loan – Consider this option first. If the business is not “bankable”, you will need to look at other options, but this would be the option most businesses take.
    • Owner Financing – The owner holds the note or a portion of the note and structures the payments. This helps the owner with some tax issues and can be attractive to both parties.
    • Tiered Stock Purchase – This allows you to keep the current management/owner involved because they have a vested interest in seeing the business successful after transfer of ownership.
    • Protect Your Position – You don’t want to purchase an existing business with both good and bad aspects to have one of the following happen:
      • Sign a Non-Compete – Have the owner sign a non-compete. It would be detrimental for the owner to open a similar business right down the road. Take into consideration a length of time for protection, similar industries/competitive environments and a distance or geographic stake.
      • Lock in Key Management – If you are purchasing a business with a key management team, get commitment letters from those employees that they will stay with you after the ownership transfer.
      • Intellectual Property – If your purchase includes any intellectual property, make sure it can be transferred and how long the protection exists.

Through this whole process make sure you test your assumptions. After you complete each step, ask yourself if it makes sense to purchase the business and if it is worth what is being asked.

Lastly, most Buy-Sells who run into a problem is when the existing owners will not relinquish the tax returns and financial information. This is why I put this step so far up in the list. If the existing business will not provide you with financial information, RUN, don’t walk, from the deal. It usually means they are lying to someone – either you or the IRS, but either way, they are lying and you don’t want to pay the price later.

 Kelly Will is a Business Advisor for the Southeast ISBDC. Kelly can be reached at kwill@isbdc.org.

*Image courtesy iStockphoto.com

“It’s my business.  I should know how to do everything and fix my own problems.”

I once read that only 12% of the adult population has the complete skill set required to own and operate an independent business. For those who have started their own business, you know that there is no test or exam required to start a business. Consequently, people can often get in over their head quickly. There is no shame in acknowledging that there are areas outside of an owner’s strengths. In our business advisor training, we are counseled to capitalize on our strengths, improve (where we can) on our weaknesses, and find work-arounds in the areas where we have too much ground to make up. While it’s reasonable to think that an owner should have some aptitude in many areas, it is unreasonable to think that he/she would be good at everything.

“My business (and therefore, my problem) is unique.”

Many companies tell us that their business, company or industry is unique – too unique to be understood by outsiders. While there are variations in companies, most have very similar challenges – understanding financials, managing people, managing cash flow. Whether you are a manufacturer, restaurant, service provider, high-tech company or small, one-person shop, we consistently help owners find the same problems in the same areas. The potential bad news is that you are not unique. The good news is that you are not alone.

“Who am I going to ask for help?  No one around here has experience in my industry.” 

In a couple of books I have been reading recently – one being Frank Partnoy’s Wait: The Art and Science of Delay – the authors have discussed the benefits of bringing diverse groups together to solve problems. Because the outsiders are not steeped in the problem, the culture and the history of the company, they can take a fresh look at the problem. They aren’t emotionally tied to the company (like most owners are); they can look at the situation through an unbiased, objective lens. Because they may have a diverse or, at least, a different, background, they can often bring lessons learned in other industries to the problems at hand. Sometimes squeezing the problem too hard by yourself just leaves you frustrated, worn out, and at a loss for a new solution. A fresh perspective can often come from the most unlikely of sources.

“What if someone finds out we are struggling?  I may lose my standing in . . .”

I can’t really help you with this one, except to say that admitting a problem early and fixing it is usually preferable to prolonging it to its sometimes inevitable end. It’s easier to bail out a boat while it’s still floating than it is to raise it from the bottom. If you don’t want people to know that you are struggling, think about how you will feel when you are closed, bankrupt, or in far worse shape.

Let us help.

At the ISBDC, I believe that one of our most under-utilized resources is our consulting. Whether we act as a sounding board, an idea generator, a subject matter expert, a connector to another mentor/expert, or just a support mechanism, our consulting services can be invaluable to a struggling owner who doesn’t have anyone to talk to about his/her business. Without being cliché, there is nothing new under the sun. We have seen it all before and can usually suggest possible solutions to turn your business in a new direction. Whether you use our services and implement the solutions we might discover together is up to you.

 Scott Underwood is a Business Advisor for the East Central ISBDC. Scott can be reached at sunderwood@isbdc.org.

*Image via iStockphoto.com

Everyone who wants to start their own business has a list of reasons why they want to do it. According to Inc. Magazine, these are the top ten reasons to run your own business:

1. You Control Your Own Destiny
2. You Can Find Your Own Work/Life Balance
3. You Choose the People You Work With
4. You Take on the Risk – And Reap the Rewards
5. You Can Challenge Yourself
6. You Can Follow Your Passion
7. You Can Get Things Done – Faster
8. You Can Connect With Your Clients
9. You Can Give Back to Your Community
10. You Feel Pride in Building Something of Your Own

Though these are great and noble reasons to start a business, this list and just about every other list on the internet does not mention the number one reason why anybody should start a business. In fact most of the articles about starting a business never mention the biggest reason to go into business.

Tom’s Secret Number 1

The first reason anybody should go into business is to make money.

It is OK to make money. A noble heart can have all the good intentions in the world. However, they cannot go very far if they don’t have the resources to keep their business going. Without money, you cannot make your own schedule, give back to the community, connect with your clients, etc. All the good intentions in the world will not replace money when it comes to running your business.

Job one is to make your business sustainable. Once you are sustainable, that is have a positive cash flow and a strong net income, then you can think about the altruistic reasons you started your business. Simply put, you need to make money and enough of it.

Tom’s Secret Number 2

85% of running a business is common sense. The rest should be in your business plan.

From the moment you decide to start a business to the grand opening to the hiring and firing of employees and beyond, you will be faced with having to make decisions. Making the right decision is often hard to do. You are often faced with having to make decisions on the fly or at the most inopportune time. Under the best of circumstances, some decisions about your business are hard to make. Making a rash decision can have an impact that could affect your business for a long time, especially if it damages your reputation, image, or your credit.

When it comes to making decisions about your business you should stop and think about the following questions:

• Is this good for my business?
• What impact will this decision have on my overall business?
• What are the short and long term effects?
• How much will it cost?
• If it costs money, where will it come from?
• If there is not money in the budget, what will I give up that is in the budget and how will that affect my business?
• Does this decision fit in with my plans?
• Why am I doing this?

There are a lot more questions you might want to ask yourself about the decision you have to make. Making choices under pressure can lead to disaster. Not following your plan or being pressured to make a decision can also lead to disaster.

As a business person, you will meet people everyday that will want you to make one decision or another. Some of these people will try to pressure you into making an immediate decision with out time to think things through. If this is the case, just ask yourself, do I want to do business with a person like this? Anyone that does not respect your need for time to make a decision about the well being of your business really doesn’t deserve your business.

Common sense may even dictate that you seek outside help in the way of your accountant, lawyer, or other trusted person, like your regional ISBDC counselor, to make the proper decision. Take advantage of the experts in your corner. That is why you hired them. I have always felt that a good lawyer and accountant that are well versed in the needs of a small business are worth their fees in gold.

Tom’s Secret Number 3

Think of money is a tool. Take care of it.

Every industry has its set of tools. Every business has one tool in common, money. Taking care of your tools is an important part of running your business. A good example of this would be a carpenter. They use and rely on their tools being sharp, square, straight and properly set up. If their tools are not in good working order, it makes their job harder if not impossible. Using tools that are not in good working order, or using them improperly can cause damage, injury, and unprofessional results.

Neglecting the tools of the trade is probably one of the worse things that anyone can do. Imagine if the carpenter left his tools out in the rain and they rusted. How would he be able to effectively do his job with rusty tools? In your business you need to take care of one of your most important tools, money. If you don’t take care of it, no one else will.

So there you have it.

You need to make money to do the things you want to do and that is OK.

Common sense says that you should not rush into a decision and that you need to understand the ramifications of your decisions. Remember secret number 1 as one of the reasons for a decision.

Use your money wisely. Use secret number 2 to help you keep your tools in good shape and ready to work for you when you need it.

To bring it around full circle, common sense and using your money wisely will make the money you need so you can do the things you want to do.

Tom Steiner is a Business Advisor for the East Central ISBDC, an organization with the mission to create a positive and measurable impact on the formation, growth, and sustainability of Indiana’s small businesses by providing entrepreneurs expert guidance and a comprehensive network of resources. Tom can be reached at tsteiner@isbdc.org.

*Photo via iStockphoto.com

Scot Goskowicz

However, we often forget that our national economic picture is not the same as the regional Indiana picture. I am privileged, because of my position with the Indiana Small Business Development Center (ISBDC), to hear both the good and the bad news about our economy on a regular basis. This leads me to one thought, here at home in Indiana there are some extremely bright spots in the Indiana Economy. I wonder how many people know this good news. To give you some examples, below are two facts recently released by the Indiana Economic Development Corporation (IEDC).

• Since the beginning of the year (2012), Indiana has added 37,500 total private sector jobs led by 15,100 in manufacturing, according to the Indiana Economic Development Corporation (IEDC).
• Hoosier job growth was recorded as six times the U.S. average and accounted for roughly 12 percent of the nation’s increase (IEDC).

Although these are only two examples, my point is this:  finding the positive/good news about our Indiana Economy is not hard to do if you look for it. But as we all know, positive news doesn’t sell as many newspapers or make for good TV.

With this said, my above thoughts lead me to another question. I wonder how many people don’t start a business because they were persuaded against it because of what they have heard in the news? In my role as an advisor with the ISBDC it’s easy for me to say that I believe people don’t let bad news persuade them. However, I generally only deal with people who have looked beyond the news and are ready to learn more about whether or not their idea will work.

If you are considering starting a business, how differently would you feel about the potential success of your idea if you heard as much positive news as you do negative news?  In answering this question, I realized quickly that my initial view could be wrong. If you think about it, it’s not a hard stretch to imagine that someone might lose interest in an idea or dream due to hearing negative information all of the time.

I will end with this final thought. If you are on the fence about whether or not you think you might have a business idea that will work, don’t let any pundit or negative news sway you from looking further into your idea, especially if it’s your dream. The real indication on whether or not your dream has the potential to be a self sustaining business can be done using feasibility methods that are tested, and I or any other business advisor with the ISBDC would love to help you through that process.

Scot Goskowicz is a Business Advisor for the Northeast ISBDC, an organization with the mission to create a positive and measurable impact on the formation, growth, and sustainability of Indiana’s small businesses by providing entrepreneurs expert guidance and a comprehensive network of resources. Scot can be reached at sgoskowicz@isbdc.org.

*Image via iStockphoto.com