BOSS Ladies and Gentlemen: Pack your bags, because this will be the event of the year at the Black Enterprise Entrepreneurs Conference May 2012 in Chicago. We have some special networking events planned for you, so make sure to RSVP here and save $100 using code BSSNTW. Register at Black Enterprise.
Wednesday, February 8, 2012
Tuesday, February 7, 2012
A few weeks ago, my sister posted one of the funniest Facebook status updates I’ve read in a long time. She said: “I followed this rainbow for my pot of gold and it took me to work! Hmmm!”
Do you need capital to startup a business or expand your existing business? Where will you get the money? The days of zero-down loans are pretty much gone, and if you’re thinking of getting a grant to start a business or expand, you’re out of touch with reality. Most grant programs require matching funds and they’re rarely geared to for-profit businesses anyway. So where does this leave you?
First look within. Whatever your capital needs, you should expect to put on the table a minimum 20% of what is needed from your own pocket before asking family and friends for their loot to go into business for yourself.
It should be no surprise to learn that about 60 percent of small business financing comes from commercial banks. It also should be no surprise that today’s lending standards are much tougher than they used to be. The fact is, you will need a credit score in the 700's to qualify for most loan programs. The biggest reason that women business owners don’t get the capital they need is because they simply don’t ask. This can be due to fear of rejection or ignorance—not knowing how much or how to ask for a loan.
Many business owners falsely believe that the SBA is a lender. They are not. They only guarantee a loan that your bank may decide to make. The SBA offers a variety of loan guarantee programs for very specific purposes. There are three that are most popular. The 7(a) Loan Program is typically used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business. SBA’s Microloan Program provides small, short-term loans to small businesses and certain types of not-for-profit child-care centers. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. Pathway Lending (www.PathwayLending.com) is an example. They provide loans to businesses lacking access to traditional financing, with emphasis on low- and moderate-income communities in Tennessee, resulting in new jobs and wealth creation. Other states have similar entities. These intermediaries make loans to eligible borrowers. The average microloan is about $25,000. Lastly, the CDC/504 Loan Program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.
Maybe you want to explore some less traditional sources of capital? Prospective business owners can use their retirement funds to pay for new business start-up costs. While not considered an abusive tax avoidance transaction, this method is questionable by some because it may solely benefit one individual—the individual who rolls over his or her existing retirement funds to the program in a tax-free transaction. The program then uses the rollover assets to purchase stock of the new business. To learn more about this type of financing go to www.BeneTrends.com .
Another unusual place to fund your startup or expansion is via www.Kickstarter.com. Kickstarter enables an entrepreneur to create a project profile online and seek funders who may even be complete strangers, but they believe in what you’re trying to accomplish. I think this is great for a startup idea, but if you’ve been in business for a while you really should have your ‘stuff’ together, and not have to rely on this type of fundraising, which may make your customers wonder what you are doing with the money that you are making. In this scenario, ‘Backers’ will pledge dollars to your project in exchange for gifts or rewards. However, there is one catch: it’s all-or-nothing funding, so your project must be fully-funded or no money changes hands.
Keep in mind, if you do get your hands on the money you need to start or grow your business, there may not be an opportunity for you to go back to the well for more any time soon. If you borrow money for a particular project, commit to completing the project—don’t use the money to go on a spur-of-the-moment personal trip or make a major purchase that has nothing to do with your business. I promise you will just regret it later, and even worse, you will still owe the money back with agreed upon interest.
Carefully compare the different kinds of financing options available to you; choose the best option based on your current circumstances not necessarily the first option.
Learn more about Aundrea Y. Wilcox at StartUpSavy.biz
Monday, February 6, 2012
Sister Duo Give Tips on Running a Business with Family and Friends
By Lenora Houseworth
So, you’re thinking about going into business with your sister or best girlfriend, are you? The idea of spinning your dream into a successful venture with your BFF sounds good, but are you actually prepared for the journey that lies ahead?
One set of Chicago-based sisters Kyra and Kozi Kyles prove you can indeed go into business with your sibling or best friend, and have fun while doing it. As creators, writers, and producers of the comical sci-fi web series “Human Resources” starring puppets, the Kyles sisters are breaking new ground humorously addressing touchy workplace issues in the recession-era with the online project released under their entertainment company Myth Lab Entertainment, Inc.
“It is definitely based on our work experience,” said Kozi, who came up with the idea for the show based off her experience surviving a company layoff earlier in her career. “What stood out to me was the poor way it was handled. It was kind of eerie. Nobody talked about it. You would see your coworkers get up from their desk, go to the conference room and it was almost as if they had vanished and their personal items left with them. It struck me as something I had seen on the X-files.”
The sisters have been a collaborative team their entire lives, writing mock-magazines and play filmmaking as young girls, so it was only natural that they would eventually become business partners.
The talented twosome shares their best tips on how to start and maintain a business with someone you love.
You are not twins.
“Embrace the individual strengths and weaknesses. I think sometimes people mistake a partnership with doing everything in lockstep and that is what leads to problems because you’re different people. Even if you’re best friends, even if you’re sisters, you are different,” says Kyra, who takes the lead on marketing while Kozi takes the lead on the production. “What you need to do is say ‘You do this, I do that.’ You definitely want to be collaborative but you also have to let the individual talent shine and that way you will get more out of working together.”
Honesty is a priority.
“You need honesty and open communications at all points to make sure everything goes smoothly. You are definitely still friends but you also have to work together in a business environment, and the only way that is going to work is if you are honest with each other about what your goals are,” Kozi says.
Agree to disagree, diplomatically.
“I think you definitely have to acknowledge it is not going to be perfect, even when you are working with yourself,” Kyra says.
You just have to deal with it, and we deal with it with a sense of humor. We make fun of a situation and how silly it was and we are back talking within a few hours… Kozi is known in our family as the diplomat. She knows how to talk to people. She might not agree with you but she doesn’t ever make you feel bad about the fact that you two don’t agree, and I appreciate that quality in her. I would advise people that if you are working with someone, someone has to be the diplomat.”
Kozi adds, “We just have a lot respect for one another. Even if we don’t have the same viewpoints, I am very open to listening why she wants to do it a certain way, and I think that helps us get through some of those more difficult situations.”
“We are working evenings, weekends, and mornings; we definitely have to have a system in place. That is the way we orchestrated things,” says Kyra, who works also works full time as a journalist. Kozi, who works in marketing for an entertainment company says delegated tasks keeps everything “streamlined.”
Encourage each other.
“Starting a business can be a really freighting and overwhelming experience so having someone constantly encouraging you is definitely a benefit and helps you persevere over those more difficult times so having someone you can laugh with is definitely a perk,” says Kozi.
“I think unfortunately in this economy people find themselves often times working with people they don’t like,” adds Kyra. “Whenever I work with Kozi on “Human Resources” I always start the day laughing and I end it laughing. I wish it was like that for more people. So I treasure the time we have together.”
Keep up with the Kyles sisters at http://www.hrtheseries.com/ and check their blog http://www.hrtheseries.com/blog for fresh content.
Featured Writer: Lenora Houseworth is a published writer, editor and social media strategist. She can be reached firstname.lastname@example.org. Find her on Twitter: @LenoraTheScribe.
A “Day in Her Life” blog series gives an insider view into the professional lives of successful women from various fields with the intended purpose of educating and inspiring the next generation of BOSS women.