that you’re competent and reliable and have a good plan to repay the loan, says Kamoroff. When you meet a banker, come prepared with your resume, business plan, a personal finance statement and a statement projecting income and expenses for the first six months or year. You’ll also probably need collateral, such as a mortgage on equipment or a second mortgage on your home for a secured loan. If you’ve done business with or obtained a loan from a particular bank, start there. Other options include SBA loan programs (800-U-ASK-SBA or www.sba.gov).
Manage your cash flow. Cash flow will determine whether your business succeeds or fails. Making sure you collect what you are owed is like making sure you get your paycheck.
Make sure you get money up-front: take deposits, get retainers and require partial or progress payments. Request payment in cash at the time of sale or delivery of your service. Take bank cards instead of extending credit. Always bill promptly instead of waiting until the end of the month. Also, offer discounts of 2% to 5% if payment is made within 10 days from the date of the invoice. Set up a reliable bookkeeping and accounting system to: keep tabs on how your business is doing from the start; enable you to take advantage of tax deductions; and protect you should you be audited.
n Structure your marketing plan. Formulate a plan that defines exactly who your customers or clients are; identifies who your competition is; clarifies what advantages you have over your competition in terms of price, service, quality, variety and ease of use; determines how big your market is and if there are enough buyers for you to reach the level of income you need, and identifies how you’ll inform clients or customers about what you offer.
Create a business plan. Once you’ve researched your market, estimated your start-up expenses and strategized a plan for managing cash flow, you have the essential elements of a business plan.
It should provide you (and potential investors or creditors) with your business idea; your background; ex
perience; contacts; where you plan to locate; how you’ll obtain or manufacture inventory; how you’ll find and keep customers; financial forecasts of income and expenses; profit or loss and cash flow; the status of your competition; how much money you’ll need to start and what the money will be used for; how much time and money you plan to commit to the business; how much you’ll pay yourself; and how you’ll repay a loan or investment.
After your business plan is complete, it’s time to put it to work. This is your blueprint for operating your business. So, get busy! You are now ready to join the ranks of the self-employed.
Support Sources for the Self-Employed
Minority Business Development Agency
National Association for the Self-Employed
National Association of Home-Based Businesses
National Federation of Independent Business
U.S. Small Business Administration and SBDCs
Working Solo Inc.
American Association of Minority Businesses