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The Ins and Outs of Alternative Financing

By bridgetwpollack, Guest Blogger
Published: June 4, 2015 Updated: June 4, 2015

After the recent financial crisis, traditional banks are more reluctant than ever to fund small businesses. Entrepreneurs need not be discouraged though, as a new trend has emerged in the world of finance: “alternative lending.” What exactly is alternative lending and is it right for your business? Here are some resources to help demystify the latest options in small business financing.

“Alternative Lending” Defined

You may walk through open doors of your local bank only to hit a brick wall. According to this Alternative Lending e-guide, traditional banks decline up to 80% of small business loan applications.

Enter the “alternative lenders,” aka non-bank lenders. With faster underwriting and shorter decision processes, alternative funders have grown increasingly popular. They lent approximately $3 billion in 2013, double the amount from 2012. Banks tend not to loan amounts less than $200,000, so alternative financing appeals to small business owners in need of smaller loans.

Types of alternative funding include term loans, merchant cash advances, factoring and equipment loans, and you can apply for alternative financing online.

Beyond Brick-and-Mortar Banks

It seems like you can find everything online, even money for your small business. In the SCORE online workshop, “An Insider's View: Securing Capital to Grow Your Business,” Ty Kiisel, Contributing Editor at OnDeck, explores these new financial options in depth.

Applying for online business loans requires less paperwork with a shorter wait period. You can often learn your fate in five minutes and receive funding in 24 to 48 hours. However, interest rates are often higher than those of traditional bank loans.

Sources of online financing include:

  • Non-profit lenders
  • Invoice financing
  • Online business loans
  • Loan matching sites or aggregators
  • Crowdfunding

Get the Crowd Behind You

Another buzzword has hit the world of financing: “crowdfunding.” This is the funding of a business or project by raising money from a large number of people. Individuals can commit as little as $5 and receive a reward for their donation. Kickstarter and IndieGoGo are popular options, but the list of crowdfunding websites grows every day.

In the SCORE Small Business Success podcast on Crowdfunding, Maryann O’Neil and John Montelione, co-founders of a crowdfunding website called MsGenuity, detail the process. They explain the two types:

  • Reward based crowdfunding: A person contributes money and receives a reward in exchange
  • Equity based crowdfunding: A person contributes to become an investor of the business

Why is crowdfunding so popular now? The great recession and high unemployment rates inspired the Jobs Act of 2012. The new law encourages small business financing by relaxing securities regulation so entrepreneurs can raise money from the public.

Alternative financing may seem like the perfect answer for a small business owner, but every loan comes with risks. A SCORE mentor can help weed through your financing options, so you can decide what’s best for your small business; get connected today.

 

About the Author:

bridgetwpollack
Bridget Weston Pollack

Guest Blogger

Bridget Weston Pollack is the Vice President of Marketing and Communications at the SCORE Association. She is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies to facilitate the growth of SCORE’s mentoring and trainings services. She collaborates with SCORE volunteers and develops SCORE’s online marketing strategy.

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#DreamSmallBiz: National Small Business Week Recap – Part Two

By sfield
Published: May 27, 2015 Updated: May 27, 2015

Last week, we gave you a recap of some of the events that took place during the first half of National Small Business Week, which took place May 4-8.  Throughout the week, we held events focused on trade, lending for small businesses, veteran support, how to target millennial entrepreneurs, and an InnovateHER competition in which entrepreneurs live-pitched their products and services for a chance to win prize money provided by Microsoft. 

In last week’s post, we noted that while many participants physically attended our events, we also gave participants the option to watch our events via live-stream and join in on the conversation.  If you weren’t able to join us for live-streaming, here’s a second recap of some of the events that took place later in the week during National Small Business Week 2015:

Day Three:  Financial Programs in San Antonio

On Wednesday, May 6, we landed in San Antonio, Texas for a town hall-style meeting focused on how businesses can benefit from SBA’s financial programs including LINC, a new SBA program that connects small businesses with SBA approved small business lenders.  Participants also had an opportunity to engage in a discussion with the SBA Administrator, Maria Contreras-Sweet, on the opportunities and challenges facing the small business community. 

Members from President Barack Obama's cabinet were also present as Sweet focused on what makes San Antonio unique for small business owners, noting the way its citizens embrace immigration, something she flagged as important to the growth of small businesses.  “40 percent of the Fortune 500 were started by immigrants (or) are children of immigrants,” she said.  “There’s just a lot of good stuff happening with immigrants today.”

Day Four:  Entrepreneurship in New York

On Thursday we came together in New York City for a town hall conversation focused on entrepreneurship.  Mike Muse, CEO of record label, Muse Recordings, and a successful music executive and radio personality who has been able to sustain his success throughout his career, hosted the event, which highlighted the individual journeys of a diverse set of entrepreneurs, giving attendees an opportunity to hear from successful millennial entrepreneurs across various industries across New York City.  According to recent data from the Kauffman Foundation, 54 percent of millennials want to start a business or have already started one.  The SBA continues to foster the growth of millennial startups through many outreach efforts including a Millennial Road Show that is a part of SBA’s “My Brother’s Keeper Initiative,” a Presidential priority to ensure that all young people have opportunities to improve their life outcomes and overcome barriers to success.  If you missed the live-stream of Thursday’s event, you can watch the full session on YouTube here

Day Five:  Awards and More in Washington D.C.

As we closed out National Small Business Week on Friday, May 8, in Washington D.C., we wrapped up the inaugural InnovateHER final competition, a live pitch competition which featured 15 entrepreneurs whose products and services best met the SBA’s competition criteria and presented the greatest potential for success in supporting the lives of women and families.  Each of the top finalists gave a two-minute pitch on their product or service in front of a team of expert judges and answered judges’ questions.  The first place winner, Bethany Edwards of Lia Diagnostics, received $15,000 in prize money provided by Microsoft for her flushable pregnancy test.  The second place $10,000 prize went to Lisa Crites, creator of The Shower Shirt, a garment for breast cancer mastectomy patients to wear in the shower and keep surgery sites dry and clean.  The $5,000 third place prize went to Sophia Berman of Trusst Lingerie, which provides a better bra for larger busted women.  The full video of the final InnovateHER pitches, the Administrator’s commentary, commentary from Microsoft’s Cindy Bates, and an all-female panel on small business investment tips is available here

The SBA also distributed National Small Business Week awards, including its Exporter of the Year Award and the award for the National Small Business Person of the Year.  Check out this video clip for live video highlighting this year’s winners from a portion of that awards ceremony.   

If you missed any of the excitement from National Small Business Week 2015, be sure to check out the full list of webinars, training materials, and event videos on the National Small Business Week YouTube page.  We look forward to celebrating with you again in 2016!  

 

 

About the Author:

sfield
Sarah Field
I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

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Three Dangerous Myths in Entrepreneurship

By Tim Berry, Guest Blogger
Published: May 26, 2015

One thing that bugs me about the world of entrepreneurship is how often people who ought to know better propagate these three very common and potentially dangerous myths. They come up constantly as I talk to entrepreneurs at meet-ups, business plan competitions, and in classrooms. And I see them every day in blogs and other online content. I sometimes worry that there are people who claim to be startup experts whose experience seems to be mainly reading what other people say and repeating.

Myth 1: Be your own boss

Be your own boss? With due respect to Melinda Emerson’s excellent book with that title, that’s only half true.

When you build a business, you have lots of bosses. Customers, just to name a few. Then there are people to whom you owe money, people who owe you money, people with whom you form partnerships or strategic alliances, and your employees. All of them, at one time or another, call the shots.

And if you have investors, you definitely have bosses. That money buys them a "say" in how you run things. Get used to it.

Want ultimate freedom and independence? Look elsewhere. Wealthy parents are nice. Winning the lottery is nice. Learning to live without money and without any relationships or dependents may not be all that nice, but it's another route to having "no one to answer to."  Starting a business, however, isn't.

The half of “be your own boss” that is true is that when you have your own business, you do have the freedom, much of the time, to decide what risks to take and what hours to work … as long as your customers and investors are happy.  

Myth 2: Getting Investors is Always a Win

Business schools, entrepreneurship classes, and all those blog posts that repeat worn clichés must take most of the blame for this one. After all, it's what we teach: you develop a business plan, get financed, and start. And there is some truth to it. Often, this is a win, and it's good.

But it’s also a myth. Investment is not always a win — and not in all ways.

Finding investors is a conditional win. It's a plus IF…

  1. You need investors and can use the money to grow the business; and
  2. You find compatible investors

We've talked a lot about finding compatible investors, but it bears repeating: getting the wrong investor is like getting in the wrong marriage. It not only implodes your business but can wreck your entire life.

That's why I recommend that if you can build your company without investment, take the chance to do it. It'll be worth the experience of no one looking over your shoulder — at least no one with the clout of an investor. Being the sole owner is a great thing, if you can make it happen.

But, yes, it's also a fact that that's not possible for every business. Some businesses need investment and, in fact, won't survive without it. But if you have options — if it's a choice between growing slowly without investors versus growing faster with them — choose carefully. Slow growth is still growth, and survival is what counts.

Myth 3: The more money, the better

Do a little digging and you can actually find a curious thing: a 1997 Dun & Bradstreet research report on reasons for business failure that lists "too much money" as one of the causes. And no – they weren't kidding.

I think for most startups, there's a "sweet spot" – a point at which the resources match the opportunity. Money gets spent the right way: building the business without overspending. But with a surplus in the coffers, guess what can happen?

I saw this firsthand with my company, Palo Alto Software. If we'd have had more money in 1999, we might not have survived the dot.com crash in 2001. Instead, we didn’t have enough monetary rope to hang ourselves … and it's been a lesson I've remembered ever since.

So if you're thinking you'll be an entrepreneur because:

  • You don't want to answer to anyone,
  • You think having someone else foot the bills for your business would be fun,
  • Or you've got a pile of money stacked up, just begging to be put into a new venture ...

… you may be asking to become a victim of these alluring, but dangerous half-truths.

Think it through. 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

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So You’d Like to Start a Home-based Baking Business: Now What?

By sfield
Published: May 18, 2015 Updated: June 30, 2015

Martha Stewart famously entered the food service business with her basement-based catering company in the 1970s – but it takes hard work and lots of homework to make it that far.  While a home-based baking business comes with many perks, like the flexibility of working from home and a lower-risk entry into the competitive food service space at your own pace, it’s important to understand the rules and regulations around the production of food for public consumption in an in-home environment before you get started. 

While food production from your home is heavily regulated, it’s far from impossible.  If your passion involves turning your baking skills into a home-based business, here’s what you need to know to succeed.

Laws, Permits, and Licenses

While there are several steps you need to take to ensure that your home-based baking business is considered legal, laws can vary from state to state, so be sure to do your homework regarding what is legal in your area. 

First, what do you want to call your business?  Will you go for something unique, or for a more generic name like “Sarah’s Bakery” or “Corner Café?”  The later are generic enough that they aren’t protected, but that can be a double-edged sword – while another business with a generic name like yours cannot take legal action against you, it also means that your business isn’t protected if someone wants to use the same name.  If you want to find out if a name is already registered, you can check the Trademark Electronic Search System.  There is also information available on sba.gov about registering your DBA (doing business as) name and other helpful steps like obtaining a tax ID number and securing your permits and licenses.

Second, keep in mind that even if you’re starting your business from home, your business is still subject to license and permit laws.  To get started, you can select your state from this list to find out which licenses and/or permits you will need, as well as the information to guide you through the application process.  You’ll also want to visit your city or county government website to secure a general business license, which legally entitles you to operate your business and typically includes a small fee.  Some city and county zoning and planning agencies also require home-based businesses to secure a home occupation permit.  If a permit is not required in your city, the zoning office can tell you whether or not your neighborhood is zoned for a home-based baking business.  (Click here for more helpful information on sba.gov about zoning laws for your home-based business.)  You may also need to check with your homeowners association, as it may have rules that restrict the type of business activities you can conduct within your home.

Third, let’s talk taxes.  If you sell your baked goods in a state that charges a sales tax, you may need to apply for a tax permit or otherwise register with the state revenue agency.  If you need more info on sales taxes for small business owners, check out this blog post.

Health, Safety, and a Fully-equipped Kitchen

In addition to business licenses and permits, you may also need a permit or an inspection from a local fire department since your business will likely require the use of flammable materials.  Some communities also monitor air and water pollution by businesses, so check with your state EPA to see if these rules apply to you. 

Your county government is typically responsible for issuing your health department permit, especially because your baking business involves selling food to the public or to other businesses.  Your state may require additional permits for food service or food preparation. 

Once you’ve locked down the business side of things, there are health codes and regulations to consider regarding your kitchen space.

While this isn't necessarily your first step as a home-based baker, your kitchen is something you need to consider before you move forward with your new venture.  If you already know what product(s) you intend to produce, check to ensure that you have the right equipment with which to adequately prepare, cook, store, and transport your baked goods.  

If your kitchen/equipment situation isn’t what you need it to be, you may want to consider investing in a separate kitchen and/or additional equipment to scale your business.  Also keep in mind that commercial kitchens and local restaurants may be available to help, especially if those businesses don’t hold extended hours, as you might be able to rent kitchen space during odd hours.  It may seem like a larger investment, but baking in a kitchen that is already health department-approved will also save you time and money, and it gives you the flexibility to bake when your orders come in and stay home when there aren’t orders to fulfill. 

Some states do forbid the use of residential kitchens for commercial food production, and some local governments also restrict at-home commercial food production, so be sure to check out local zoning laws and contact your local Public Health Department before getting started.

If you do your homework, you can absolutely succeed in what can be a very rewarding segment of the home-based business market.  Happy baking! 

 

 

About the Author:

sfield
Sarah Field
I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

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Streamline Your Small Business’s Sales Strategy

By bridgetwpollack, Guest Blogger
Published: May 7, 2015 Updated: May 7, 2015

Developing strong sales and customer loyalty can be a difficult, time-consuming endeavor. Without an effective strategy, even a promising company can fail. The task need not be overwhelming though; practice and most importantly, passion, will help you close more deals. Here are some resources to make your sales process as smooth as possible.

Embrace your inner salesperson

Most of us are not born sales people, but once you become familiar with the techniques, selling will become a natural part of owning a business. In “Expert Tips for Sales and Customer Loyalty,” an interview with SCORE mentor Steve Engelhardt, he explains how small business owners should treat each sale as an opportunity to gain the next sale and earn a loyal customer.

If you believe in your product and respect people, customers will appreciate your sincerity, and they might reward you with more business. Keeping customers satisfied leads to more sales.

Find your customer

Before you can create loyal customers, you must first find them. Did you know 39% of sales still originate from outbound marketing, such as telemarketing? Keep in mind that sales calls demand time, and not all leads become sales:

  • Every 30 dials leads to 1 conversation
  • Every 3 conversations lead to 1 appointment
  • Every 3 appointments lead to 1 opportunity

The key to success is consistency and persistence. See this month’s SCORE infographic “B2B Sales Calls” to learn more about reliable sales techniques.

Update your sales methods

A growing trend of nontraditional sales techniques are hitting the streets. In the online workshop “Pavement-Pounding Strategies to Generate More Sales,” entrepreneur and SCORE Mentor P. Simon Mahler recommends going outside and meeting customers face to face. He offers unique ideas to stand out in today’s advertising-saturated world.

One approach uses the entire small business team not just a sales person. Employees wear shirts with the company logo and interact with neighbors. The shirts encourage brand recognition and team spirit.  He suggests even handing out decals; you want to show how your small business is unique.

Mahler says no matter the method, your sales strategy should not revolve around closing the next deal but about nurturing and caring for those around you. Being helpful builds customer loyalty. Develop personal relationships, engage with the community, and sales will follow.

Each small business must determine the best sales plan based on their product or service and the size of their sales team. A SCORE mentor well-versed in your industry can help you strategize and ultimately gain more customers.

 

About the Author:

bridgetwpollack
Bridget Weston Pollack

Guest Blogger

Bridget Weston Pollack is the Vice President of Marketing and Communications at the SCORE Association. She is responsible for all branding, marketing, PR, and communication efforts. She focuses on implementing marketing plans and strategies to facilitate the growth of SCORE’s mentoring and trainings services. She collaborates with SCORE volunteers and develops SCORE’s online marketing strategy.

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Celebrate National Small Business Week with Us; Live-stream, In-Person and Online Using #DreamSmallBiz

By sfield
Published: May 4, 2015 Updated: May 4, 2015

There is no denying the positive influence small businesses have on our nation’s economy. During National Small Business Week we honor their hard work and contributions to our communities. We are kicking off the festivities with live events with SBA Administrator Maria Contreras-Sweet in five cities throughout the week. Can’t make it to an in-person event?  You can watch the events live-streamed online at www.sba.gov/nsbw. While you watch, join the conversation and tweet in real-time using #DreamSmallBiz directly from the NSBW home page!

Additionally, we’re providing educational webinars to help your small business thrive. Webinars start this afternoon and run throughout the week.  We’re kicking it off with our webinar on understanding the Fair Labor Standards Act (FLSA), which will not only help you learn to correctly classify employees as exempt, non-exempt, or as an independent contractor, but will also teach you how to know when and how you are required to pay employees – you can register for the webinar here.  We also have a great webinar planned for this evening with Join Steve Strauss, USA Today Small Business columnist, and Jeff Biesman from YP, discussing the secrets to crafting a digital footprint.

There’s a lot going on this week, so we want to make sure you have all the key details! Visit www.sba.gov/nsbw today to explore the events taking place near you throughout the week.  While you’re there, sign up with your email address and zip code to receive conference information and reminders. 

We’ve also put together a handy social media guide to help your small business promote this week’s events and to join in on the ongoing conversation about National Small Business Week.

Small business owners and entrepreneurs are working every day to grow small businesses, create 21st century jobs, drive innovation, and increase America’s global competitiveness.  We hope this week’s events and resources help your small business celebrate the contributions of America’s entrepreneurs and small businesses, and we hope you’ll help us spread the word about National Small Business Week!

To learn more about the United States Small Business Administration, please visit www.sba.gov

About the Author:

sfield
Sarah Field
I am an author and moderator for the the SBA.gov Community. I'll share useful information for your entrepreneurial endeavors and help point you in the right direction to find other resources for your small business needs. Thanks for joining our online community here at SBA.gov!

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Whoever Said ‘Stick to the Plan’ Was Wrong

By Tim Berry, Guest Blogger
Published: April 28, 2015 Updated: April 29, 2015

Making Plans and Sticking To Them — Or Not!

Come the start of the year, whether that's the traditional New Year's Day of January 1 or the anniversary of your business startup date, most of us want to make better plans — and stick to them. So what holds us back? Is it the plan itself? Do we lack the tools? Are we weak in discipline?

Or is NOT sticking to a plan, sometimes, the better answer?

Here's my take.

There is no value in sticking with a plan "just because."

There's great value in a careful business planning process that keeps your business alive, thriving, refreshing itself, and growing regularly. But not every plan meets those criteria. You can outgrow plans, whether they're for improving your life or enhancing your business.

If your plan doesn't take into account the volatile nature of the markets, finances, or other exterior factors, it may cause you to stagnate, or worse. You should be learning constantly; if you are, you'll be tweaking things constantly, too. Just remember a couple of keys to good planning as you go:

1. Good planning is measurable, concrete, and specific.

The old saying is, "The difference between a goal and a dream is a date." Specific, finite, measurable goals you can easily track make your progress easy to see, so don't hesitate to "drill down" when you need to. Big concepts are great, but they work better when they're reduced to solid numbers. You can't track a concept, but you CAN track pluses and minuses!

Make your plan big on trackable milestones: sales numbers, cash flow, appointments, prospects, products, patents … whatever you deal in, make sure you're dealing in reality.  

And keep your plan lean. A lean business plan is just bullet points for strategy and tactics, plus concrete specific milestones and performance measurements, a list of assumptions, plus sales forecast, expense budget, and cash flow.

2. Good planning means frequent review and revise.

I worked for years with a plan-vs.-actual-reviews meeting on the third Thursday of every month, so we could close the books on the previous month. At every meeting, then, review your plan versus your actual results. Don't forget to challenge any assumptions that may be holding you back: when assumptions change, your plans need to change with them. If results are good, stay the course with minor tweaking. If results are bad, this is the time to analyze why and change your plan to correct problems.

3. What you do stick to is the planning process

Former president and military strategist Dwight Eisenhower had it right: “The plan is useless; but planning is essential.”

There's a difference between fluidity and a plan that seems to "slip through your fingers." Numbers, dates, deadlines, and real black-and-white data will help you avoid that slippage. Don’t stick to the plan, but do stick to a lean plan with regular review and revision as part of the process. 

About the Author:

Tim Berry
Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

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4 Tips for Coming Up With New Product and Service Ideas

By smallbiztrends, Guest Blogger
Published: April 24, 2015 Updated: April 24, 2015

Innovation is what keeps our businesses refreshing and growing.  By thinking up new products and/or services to offer, we can:

  • Stay in step with evolving market demands and trends
  • Keep pace with or get ahead of the competition
  • Acquire new customers
  • Sell more to existing customers by offering them new products they may need

Business ideas don’t necessarily just come to you like magic.  However, there are things you can do to make the process more focused and deliberate.

On the other hand, if you are too rigid or too structured when it comes to developing new products, it may suppress your creative juices. 

Instead, think of the process as “harnessing” your creativity.

Here are four tips for how to harness your creativity to come up with new products and services:

Apply The 15% Rule To An Old Idea

Some entrepreneurs feel that innovation means they must almost literally reinvent the wheel.

You don’t really need a completely new idea, though.

Instead, pick an existing idea and apply the 15% rule to it. The 15% rule simply means to set out to improve on something by 15%.  Make an existing technology 15% smarter.  Make your service 15% more customer friendly.  Make a product 15% more efficient, or 15% less expensive with 15% more value.  You get the idea.

And you don’t necessarily need to make it a thousand times better right out of the gate.  Just strive to improve a modest amount on an existing idea, and then you can build on it over time.  It just has to be different enough to seem like an improvement to buyers.

Amazon.com, for example, isn’t a grand idea; it’s an ecommerce store. However, the speed and efficiency with which it operates makes it a top retail outlet in the world.  The breadth of selection and the intelligence that its technology brings to offering product selections are impressive.  Amazon improved upon the retail model.  It didn’t offer all of innovation in the beginning that it offers today -- it started out modestly.  But it continued to improve over the course of years.  Can you do the same?

Travel to Gain Ideas

Travel is one of the biggest self-teaching endeavors you can ever take.  Leaving places you know well for completely different ones opens up your senses.  It gets you paying attention to things around you.  It makes you be more mindful because you are seeing, smelling, and hearing new things.

By experiencing new things and new places, you may come up with ideas you wouldn’t have thought of. 

Now take those ideas and build on them.  If you experience new foods and new tastes, does it give you ideas for new offerings in your restaurant or food business?  If you see buildings of different styles or colors, could it trigger ideas for new clothing styles in your fashion or interior design business? 

Whether you are a once-a-year tourist or a veteran traveler, chances are you’ll come back home with your head brimming with ideas.

Solve Your Own Needs

I can’t tell you how many entrepreneurs I’ve interviewed who said that they came up with the idea for their business because “we solved a need we had in our own business (or in my own life).”

As you go about your day, think about how to solve a nagging problem in your life or business.  Then solve it. 

That solution just might become your next product.

Use Group Brainstorming

Brainstorming is a technique whereby a group gets together and quickly comes up with many new ideas -- no matter how impractical or wacky they may seem.  The goal is to encourage quantity -- not quality -- of ideas at first.

It’s important not to criticize an idea or point out all the flaws at first -- just get the ideas out there.  The idea is to give free reign to your creativity for a period of time, long enough to develop a pool of ideas. 

Then once you have some ideas on the table, you and your team can evaluate them and sort them out.  The vast majority of ideas you come up with will be discarded.  But you only need one for a successful new product.

Sometimes the mot amazing product breakthroughs come from the wackiest, most impractical ideas.

Of course, it takes more than ideas alone for a successful business or new product.  But ideas are the starting point.

Ideas sometimes happen when you aren’t looking. Hopeful and ambitious entrepreneurs are always looking, though. 

What new product or service idea will you think of now?

About the Author:

smallbiztrends
Anita Campbell

Guest Blogger

My name is Anita Campbell. I run online communities and information websites reaching over 6 million small business owners, stakeholders and entrepreneurs annually, including Small Business Trends, a daily publication about small business issues, and BizSugar.com, a small business social media site.

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Why You Should Hit The Pause Button Before You Buy That Franchise

By FranchiseKing, Guest Blogger
Published: March 17, 2015

If you’re seriously contemplating the purchase of a franchise, there may come a time in the process when you’ll need to consider stepping back for a bit.

I’ve found that sometimes (especially when making major life decisions) it’s wise to put things on pause.

That’s because you are too close to whatever it is you may be about to do. Being too close to a situation involving something big (like the purchase of a franchise business) may cause your decision-making skills to be affected in a negative way.

You are too close

Of course you’re “too close.” You’re probably so hyper focused on the franchise opportunity you’re investigating that you may be missing a few things that could be pretty obvious to an outsider, but not that obvious to you.

That’s why (at some point) it’s important to bounce your ideas off of people that you know and trust.

Tip: Don’t share your ideas – like on what franchise or franchises you’re looking at too early in the process because you don’t know enough about the franchises you’re interested in to ask for opinions or advice. It’s too easy to be deterred by wellmeaning friends, family members and “advisors” to begin with. Wait for the right time, like when you have a lot of facts and figures in front of you.

One more thing: Don’t ask for opinions and/or advice too late in the process. Because, if you’re at the point of no return-which is when you’ve convinced yourself without the shadow of a doubt that whatever opportunity you’re looking at is perfect for you, no one will be able to convince you otherwise.

Hitting the pause button

It’s when you hit the pause button…when you step back and take a little breather, that good things can happen. Things like possibly getting a better perspective about what you may be about to do from people who will give you honest feedback. 

Now, you don’t have to try to find people that will shoot your ideas down. That’s not what I mean by finding people who will give you honest feedback. Feedback doesn’t automatically have to be negative. But, you do need to find people who may not tell you what you want to hear. It’s honest feedback you want.

Business experts

Besides talking with friends and family members about your idea, I encourage you to find others, like people in the small business community who can give you valuable feedback. There may even be a few in your backyard.

Small Business Development Centers (SBDCs) have business counselors on staff who assist would-be small business owners with things like business planning, financial packaging and lending assistance. These centers are funded in part by the U.S. Small Business Administration. Go here to see the list of SBDC’s and contact one today. Their services are free.

Do you know any small business owners? If so, ask a couple of them to look at your idea.

Do you have any old college friends that are in financial services or the legal profession? They could end up becoming great resources for you to share your plans with.

Taking a step back – hitting the pause button before you buy that franchise you’ve been investigating could turn out to be one of the wisest business decisions you ever make.

About the Author:

FranchiseKing
Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and is a franchise ownership advisor. He shows people how to carefully choose and properly research franchises.   

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