The American Dream is, and always will be, to come up with an idea, start a

business and become rich from your own efforts. Based upon this motivation, thousands

of businesses fail each year, due primarily to not being familiar with the basics involved

in running a business.

This report will enlighten you, and give you a number of suggestions you can use to better

guarantee your chances for success. This report is written with the warning that any and

every business venture contains certain inherent risks, and any number of alternatives. We

do not espouse that any one way is the right way or that our suggestions are the only way.

On the contrary, we advise that before investing any money in a business venture, you

seek counseling and help from a qualified accountant and/or attorney.

Just about the first thing you should consider before deciding to start or purchase a

business is the legal form you'll be operating under. There are basically four choices: sole

proprietorship, partnership, limited partnership, and/or corporation.

Each has a number of advantages and disadvantages. We'll try to enumerate some of them

for you.

As much as anything else, for many people, starting a business is a form of ego gratification,

and they form a corporation for some sort of prestige gain -just to say, "I

own a corporation."

With just a little bit of observation, you'll find that one of the major causes of

business failures is due to the founder wasting start-up capital on frills, such as an

impressive store-front office, expensive furnishings, and corporate legal costs.

One of the basic traits you must develop if you're going to be successful in business, is a

tight hold on your expenditures. In fact, a good rule of thumb is that anything that does

not make money for you or protect your investment, should not be purchased at this time.

Very definitely, this applies to the expense of setting up your own corporation.

Unless you have a partnership and start your business as such, the only real

advantage to forming a corporation would appear to be that a corporate structure will

semi-protect the property you personally own.

As an example, you own a home and car. You form a corporation to protect these

possessions from business losses. Yet, if you can be found guilty of misusing corporate

funds, your business creditors can pierce the corporate shield and come after your

possessions.

Basically, if you invest everything you have in your business, as most newcomers

do, you don't usually need a corporation because you have nothing to protect. Your

household possessions, personal belongings, generally your car, and even a portion of the

equity in your home is protected by the homestead provision of the Federal Bankruptcy

Act, and cannot be taken away from you.

As a sole proprietor or partner of a business you'll be paying taxes on your overall

earnings, much the same as if you were holding down a salaried or hourly paid job.

Whether you do or don't take out money as a salary will have no bearing on the earnings

of your business and tax return.

The often advertised advantage of incorporating, that you can manipulate your

salary in order to save on tax dollars, is real because of corporation laws. However, the

IRS frowns on this practice. When your business is successful and making a lot of money,

definitely check with your accountant on the advantages of incorporating.

As a corporation, you'll be subject to a number of other drawbacks as well:

generally higher state taxes, stricter laws concerning the operation of your business, more

elaborate accounting procedures, and legal papers that are required just about every time

you make a major move or sign almost any contract. Thus, your legal and accounting fees

will be much higher as a corporation than will those required for a sole proprietorship

type of business.

As a sole proprietor or partnership, you'll find many areas require the registration

of your business name. The cost however, is minimal, ranging from $5 to $100. About the

best way to find out what laws apply in your area, is to call your bank and ask if they need

a fictitious name registration card or certificate in order for you to open a business

account.

Selecting a name for your business is quite important to you and particularly

relative to advertising.

Your business name should describe the product or services you offer. Fancy

names such as, Linda's Clipping Service will lose potential "walk-in and passing"

customers to the beauty shop across the street that calls itself, Patti's Beauty Salon or

Jane's Hair Styling shop.

The advantage of using your full name in the title of your business, such as

Johnny Jones' Meat Lockers, has the advantage of making credit somewhat easier to come

by - provided you pay your bills on time - but it also includes the disadvantage of

confining your services to a local or at most, a regional area.

Should you buy, lease, or rent space for your business? Think twice before you

make any decision along these lines. Most businesses tend to grow quickly or they never

get off the ground. There are a few exceptions, but only a very few, that tend to grow at a

modified rate.

So, buying a piece of property and setting up your business on or within that

property, obligates you to ownership regardless of what happens to your business.

Leases are almost always very strong contracts written by attorneys to the

advantage of the property-owner. When you sign an agreement to pay someone for the

use of their space over any length of time, you're "nailed in" to paying for that space

regardless of what happens to your business.

In the beginning, it's wise to either get the shortest-term lease possible, or arrange

to rent with an option to lease at a later date. This does not apply to a retail business,

unless your particular business happens to be an untried one.

Definitely, you should open a business bank account. In selecting a bank for your

business, scout around and look for one that can, and will help you. Determine what your

banking needs will be, and then via telephone, interview the managers of the banks in

your area. The important thing is to be discretionary and not select just the most

convenient bank to your business location.

A point to remember: the closer you can make the relationship between you and the bank

manager, the better your chances are going to be for approval on loans and/or special

favors you may need at a later date.

Try to become acquainted with as many of the bank employees as possible. The

better you know them, the more courtesies they'll be extending especially to you in the

course of your association.

Just as a doctor is a specialist in his field, and you go to him for medical problems, your

banker is a specialist in his field and you should go to him for your money problems. In

business, you'll have to learn that everyone is an expert in his own line of work, and in

your associations with other business people, refrain from acting like a "sharpie" and/or

pretending that you know exactly how everything works in someone else's specialty.

You'll find that very often, different banks specialize in different types of

businesses. As an example, you're sure to find banks that specialize in real estate

transactions, export-import businesses, and even manufacturing operations only. What

I'm saying here is that if you're planning to sell a fairly expensive item, your customers

will probably need and/or want financing. It will behoove you to select a bank familiar

with your type of product that will afford your customers, thru you, contract financing.

Some of the questions you should ask of your banker include the following: Is it

necessary to maintain a certain balance in your account before the bank will approve a

loan for you?

What qualifications must you have in order to obtain a line of credit with the

bank?

Does the bank limit the number of loans, or types of loans it will approve for

small businesses?

What is the bank's policy regarding the size of a check you might deposit that

requires holding for collection?

And what about checks less than that amount - will they be immediately credited

to your account?

In almost all types of businesses, it will be to your benefit to set up with your bank a

method of handling VISA, Master Charge, and regional credit cards. The important thing

here is to ultimately set up your account in the bank that will service all of these credit

transactions for you - one stop for all your banking needs. In most instances, you'll find

that having the capability to fill orders/make sales via credit card transactions, will

increase your volume of sales appreciatively.

Once you've made the decision as to which bank is going to handle your account,

you'll need your Social Security Number or your Federal Employer's Identification

Number, your driver's license, the fictitious name certificate, and if you're requesting a

VISA or Master Charge franchise, you'll also need a financial statement. For corporations,

you'll also need a corporate resolution approving of the opening of your business account.

There are different policies exercised in just about every state regarding

installation/hook-up charges by the telephone and utility companies. Some require a

deposit, and some don't.

You'll find that a great number of city business license departments are there solely for

the purpose of collecting another tax. Depending on the type of business you're asking a

license for, the building and zoning people may inspect your premises for soundness of

structure and safety. Generally, you won't encounter any difficulties - you simply pay your

fee to operate your business in that city, and the clerk types your name onto a city license

certificate.

Relative to sales tax permits and licenses, each state's rules and regulations vary

widely. The best thing to do is call your state offices and ask for information concerning

registry and collection procedures. Many states require an advance deposit or bond, and

you'll find that some wholesalers or manufacturers will not sell to you at wholesale prices

until you can show them your sales tax permit or number.

Should your business entail selling your products or services across state lines, in

another state, you're not required to collect taxes except in those where you have offices

or stores.

You may find also that your particular business requires the collection of Federal

Excise Taxes. For information along these lines, check in with your local office of the

Internal Revenue Service.

Some states also require certain businesses to hold state licenses, such as those

required in many states for TV Repairmen. These are known as "occupational permits"

and are most often required of barbers, hair stylists, real estate people and a number of

other consumer oriented businesses. If you have any doubts, check with your state offices

for a list of those occupations that require licensing.

Any business doing business in any type of interstate commerce is subject to

federal regulations, usually thru the Federal Trade Commission. This means that any

business that shops, sells or advertises in more than one state is subject to such regulation,

and this includes even the smallest of mail order operations.

Normally, very few business people ever have any contact with the federal

regulatory agencies. The only exceptions being when there is a question of your operating

your business unethically or illegally.

Any business that sells or distributes food in any manner almost always requires a

county health department permit. If your business falls into this category, simply call the

county health department and invite them out to your place of business for an inspection.

The fees generally range from about $25, depending on the size of your business when

they first inspect it for permit approval.

There are also a number of businesses that require inspection by a fire marshal,

and fire department approval. Generally, these are those that handle flammable materials

or attract large numbers of people, such as a theater. Overall, the local fire department has

to be allowed to inspect your premises whenever they desire to do so. .

You may also run into a requirement for an air and/or water pollution control

permit. These specifically apply to any business that burns anything, discharges anything

into the sewers or waterways, or use any gas-producing product, such as a paint sprayer.

Without a doubt, you'll need to check on

local regulations relating to advertising display signs. Each city or township makes its

own rules and then enforces those rules according to its own thinking - check before you

contract to have a sign made for your business .

The design and placement of your sign is very important to your business -

specifically to retail establishments - but let me remind you that your business sign is

usually the first thing a potential customer sees and as such, it should catch his eye and

leave an impression that lasts. It would be a good idea to ride around your town and take

a look at the signs that catch your eye, and try to determine the impression of the business

that sign leaves on you. This is a basic learning formula for determining the design, size

and placement of your business sign.

Some of the other things to consider before opening for business - If you intend to

employ one or more employees, you'll be required to deduct Federal Income Taxes, and

Social Security payments from their checks. This will involve your filing for a Federal

Tax Number and necessitates contact with your local IRS Office.

Most states have "unemployment taxes" which will have to be deducted from the

paychecks of any employees you hire. And there are a number of states that have income

taxes - disability insurance - and any number of other taxes. Again, the best thing to do is

check with your local office of the IRS. And above all else, don't forget to ask for the

rules of the minimum wage law, and comply.

When your business grows to the point of needing additional help, don't be afraid

to look for and hire the help you need. When you're ready to hire someone, simply run an

ad in your local paper and/or register your needs with the local office of your state's

employment service. Businesses either grow or die, and those that grow eventually need

more people in order to continue growing. When that time comes, hire the additional

people you need, and your business will continue growing. If you don't, for whatever

reason, you'll find yourself married to your business and your business growth stymied.

Regardless of how small your business is when you begin, never walk in with the

thought in mind that it's something to keep you busy. Anyone with an attitude of that kind

, is a fool. You begin and make a business successful in order to realize financial

freedom. Establish your business. Put it on its feet, and then hire other people to do the

work for you. And those businesses that require an operations manager, or someone to

run a phase of the business you're too busy to handle, hire the person needed or the

business will surely suffer.

To protect the investment of your business, you need business insurance. If you've

never had any experience with business insurance, simply look under the heading of

"business insurance" in your phone directory. Ask for bids from several different

companies or agents... Primarily, you should have a policy that gives you general liability,

fire, workmen's compensation, business interruption, and vehicle coverage. You may also

want coverage against possible losses related to burglary, robbery, Life & Accident, Key

Man, and Fidelity Bonds.

As the sole proprietor of a business, you won't be paid as an employee, so there'll

be no income tax deducted from whatever you withdraw from the company's earnings.

What you'll have to do is again check with the IRS Office for a Tax Guide For Small

Businesses Handbook, and probably end up filing an estimated tax return on a quarterly

basis.

The minute you open your doors for business, you'll have to spend some time

engaged in the work of bookkeeping. Exactly how, and using what forms, you keep

books, should be on the recommendations of a good tax counselor... The same holds true

for your overall business and/or payroll accounting system. Look for an experienced CPA

that knows the accounting problems to your particular kind of business, and solicit his

advise/counseling.

If your business is going to involve the possible purchase or lease of operating

equipment, again seek the help of your tax counselor for the most advantageous method

of obtaining the needed equipment.

Basically, arranging for your suppliers to give you materials on credit will depend

upon your honesty and personal financial statement. The best way is usually a personal

visit to the person with the power to approve or disapprove of credit at the company

where you want to set up a credit account. Show him your financial statement, and explain

your prospects for success. Then assure him that you've always honored all of your

obligations, and that if ever there's a question or problem, you'd like for him to call you at

home. And of course, give him your home phone number.

We won't go into the exigencies of advertising your products, services or business

here, but there is something along these lines you should always keep in mind. The best

kind of advertising your business can receive is that that you don't really pay for -

publicity. When something unusual happens to you, your business, or your employees -

that's news, so be sure you tell the news media in your area about it.

In closing, let me say that the most important ingredient of your eventual success

will be the soundness of the planning you did before you started your business. Any

number of bad things can really throw your business into a tailspin, but if you've done

your homework well - really set up a detailed business plan before starting - your losses

or setbacks will be minimal. Success takes planning, and within this report, you've got a

basic checklist... The rest is up to you... Good luck, and may your life overflow with

success in all that you undertake from this moment forward.

Success in business comes as a result of planning. You have to have a detailed,

written plan that shows you what the ultimate goal is, the reason for the goal, and each

milestone that must be passed in order to reach your goal.

A business plan is a written definition of, and an operational plan for achieving

your goal. You need a complete business tool in order to define your basic product,

income objectives and specific operating procedures. YOU HAVE TO HAVE A

BUSINESS PLAN to attract investors, obtain financing and hold onto the confidence of

your creditors, particularly in times of cash flow shortages - in this instance, the amount

of money you have on hand compared with the expenses that must be met. . .

Aside from an overall directional policy for the production, sales efforts and profit

goals of your product - your basic "travel guide" to business success - the most important

purpose your business plan will serve, will be the basis or foundation of any financial

proposals you submit. Many entrepreneurs are under the mistaken impression that a

business plan is the same as a financial proposal, or that a financial proposal constitutes a

business plan. This is just a misunderstanding of the uses of these two separate and

different business success aids.

The business plan is a long range "map" to guide your

business to the goal you've set for it. This plan details the what, why, where, how and

when, of your business - the success planning of your company.

Your financial proposal is a request for money based upon your business plan -

your business history and objectives.

Understand the differences. They are closely related, but they are not

interchangeable.

Writing and putting together a "winning" business plan takes study, research and

time, so don't try to do it all in just one or two days.

The easiest way is to start with a loose leaf notebook, plenty of paper, pencils,

pencil sharpener, and several erasers. Once you get you mind "in gear" and begin thinking

about your business plan, "10,000 thoughts and ideas per minute" will begin racing thru

your mind. . . So, it's a good idea when you aren't actually working on your business plan,

to carry a pocket notebook and jot down those business ideas as they come to you - ideas

for sales promotion, recruiting distributors, and any other thoughts on how to operate

and/or build your business.

Later, when you're actually working on your business

plan, you can take out this "idea notebook" - evaluate your ideas, rework them, refine

them, and integrate them into the overall "big picture" of your business plan.

The best business plans for even the smallest businesses run 25 to 30 pages or

more, so you'll need to "title" each page and arrange the different aspects of your business

plan into "chapters." The format should pretty much run as follows:

Title Page

Statement of Purpose

Table of Contents

Business Description

Market Analysis

Competition

Business Location

Management

Current Financial Records

Explanation of Plans For Growth

Projected Profit & Loss/Operating Figures

Explanation of Financing for Growth

Documentation Summary of Business & Outlook for The Future

Listing of Business & Personal References

This is a logical organization of the information every business plan should cover.

I'll explain each of these chapter titles in greater detail, but first, let me elaborate upon the

reasons for proper organization of your business plan.

Having a set of "questions to answer" about your business forces you to take an objective

and critical look at your ideas. Putting it all down on paper allows you to change, erase

and refine everything to function in the manner of a smoothly oiled machine. You'll be

able to spot weaknesses and strengthen them before they develop into major problems.

Overall, you'll be developing an operating manual for your business - a valuable tool

which will keep your business on track, and guide you in the profitable management of

your business.

Because it's your idea, and your business, it's very important that YOU do the

planning. This is YOUR business plan, so YOU develop it, and put it all down on paper

just the way YOU want it to read. Seek out the advice of other people; talk with, listen to,

and observe, other people running similar businesses; enlist the advice of your accountant

and attorney - but at the bottom line, don't ever forget that it has to be YOUR BUSINESS

PLAN!

Remember too, that statistics show the greatest causes of business failure to be

poor management and lack of planning - without a plan by which to operate, no one can

manage; and without a direction in which to aim its efforts, no business can attain any

real success.

On the very first page, which is the title page, put down the name of your business

- ABC ACTION - with your business address underneath. Now, skip a couple of lines,

and write in all capital letters: PRINCIPAL OWNER - followed by your name if you're

the principal owner. On your finished report, you would want to center this information

on the page, with the words "principal owner" off-set to the left about five spaces.

Example: ABC ACTION

1234SW5thAve. Anywhere, USA 00000

PRINCIPAL OWNER: Your Name

That's all you'll have on that page, except the page number -1-... -3-

Following your title page is the page for your statement of purpose. This should

be a simple statement of your primary business function, such as: We are a service

business engaged in the business of selling business success manuals and other

information by mail.

The title of the page should be in all capital letters across the top of the page,

centered on your final draft - skip a few lines and write the statement of purpose. This

should be direct, clear and short - never more than two (2) sentences in length.

Then you should skip a few line, and from the left hand margin of the paper, write

out a sub-heading in all capital letters, such as: EXPLANATION OF PURPOSE.

From, and within this sub-heading, you can briefly explain your statement of

purpose, such as: Our surveys have found most entrepreneurs to be "sadly" lacking in

basic information that will enable them to achieve success. This market is estimated at

more than 100 million persons, with at least half of these people actively "searching" for

sources that provide the kind of information they want, and need.

With our business, advertising and publishing experience, it is our goal to capture

at least half of this market of information seekers, with our publication, MONEY

MAKING MAGIC! Our market research indicates we can achieve this goal, and realize a

profit of $1,000,000 per year within the next 5-years. . .

The above example is generally the way you should write your "explanation of

purpose," and in subtle definition, why you need such an explanation. Point to remember:

Keep it short. Very few business purpose explanations are justifiably more than a half

page long.

Next comes your table of contents page. Don't really worry about this one until

you've got the entire plan completed and ready for final typing. It's a good idea though, to

list the subjects (chapter titles) as I have, and then check off each one as you complete

that part of your plan.

By having a list of the points you want to cover, you'll also be able to skip around

and work on each phase of your business plan as the idea or the interest in organizing that

particular phase, stimulates you. In other words, you won't have to make your thinking or

your planning conform to the chronological order of the 'chapters' of your business plan -

another reason for the loose leaf notebook. . .

In describing your business, it's best to begin where your statement of purpose

leaves off. Describe your product, the production process, who has responsibility for

what, and most importantly, what makes you product or service unique - what gives it an

edge in your market. You can briefly summarize your business beginnings, present

position and potential for future success, as well.

Next, describe the buyers you're trying to reach - why they need and want or will

buy your product - and the results of any tests or surveys you may have conducted. Once

you've defined your market, go on to explain how you intend to reach that market - how

you'll alert these prospects to your product or service and induce them to buy. You might

want to break this chapter down into sections such as... publicity and promotions,

advertising plans, direct sales force, and dealer/distributor programs. Each section would

then be an outline of your plans and policies. •

Moving into the chapter on competition, identify who your competitors are - their

weaknesses and strong points - explain how you intend to capitalize on those weaknesses

and match or better the strong points. Talk to as many of your "indirect" competitors as

possible -- those operating in different cities and states.

One of the easies ways of gathering a lot of useful information about your

competitors is by developing a series of survey questions and sending these

out to each of them. Later on, you might want to compile the answers to these

questionnaires into some form of directory or report on this type of business.

It's also advisable to contact the trade associations and publications serving your

proposed type of business. For information on trade associations and specific trade

publications, visit your public library, and after explaining what you want, ask for the

librarian's help.

The chapter on management should be an elaboration

on the people operating the business. Those people that actually run the business • their

job titles, duties, responsibilities and background resume's. It's important that you "paint"

a strong picture of your top management people because the people coming to work for

you or investing in your business, will be "investing in these people" as much as your

product ideas. Individual tenacity, mature judgment under fire, and innovative

have "won over" more people than all the AAA Credit Ratings and astronomical

sales figures put together.

People becoming involved with any new venture want to know that the person in

charge - the guy running the business knows what he's doing, will not lose his cool when

problems arise, and has what it takes to make money for all of them. After showing the

"muscle" of this person, go on to outline the other key positions within your business;

who the persons are you've selected to handle those jobs and the sources as well as

availability of any other help you might need.

If you've been in business on any kind of scale, the next chapter is a picture of your

financial status - a review of your operating costs and income from the business to date.

Generally, this is a listing of your profit & loss statements for the past six months, plus

copies of your business income tax records for each of the previous three years the

business has been an entity.

The chapter on the explanation of your plans for the

future growth of your business is just that - an explanation of how you plan to keep your

business growing - a detailed guide of what you're going to do, and how you're going to

increase your profits. These plans should show your goals for the coming year, two years,

and three years. By breaking your objectives down into annual milestones, your plans will

be accepted as more realistic and, be more understandable a,* a part of your ultimate

success.

Following this explanation, you'll need to itemize the projected cost and income

figures of your three year plan. It'll take a lot of research, and undoubtedly a good deal of

erasing, but it's very important that you list these figures based upon thorough

investigation. You may have to adjust some of your plans downward, but once you've got

these two chapters on paper, your whole business plan will fall into line and begin to

make sense. You'll have a precise "map" of where you're headed, how much it's going to

cost, when you can expect to start making money, and how much.

Now that you know where you're going, how much it's going to cost and how long

it's going to be before you begin to recoup your investment, you're ready to talk about

how and where you're going to get the money to finance your journey. Unless you're

independently wealthy, you'll want to use this chapter to list the possibilities and

alternatives.

Make a list of friends you can approach, and perhaps induce to put up some

money as silent partners. Make a list of those people you might be able to sell as

stockholders in your company - in many cases you can sell up to $300,000 worth of stock

on a "private issue" basis without filing papers with the Securities and Exchange

Commission. Check with a corporate or tax attorney in your area for more details. Make a

list of relatives and friends that might help you with an outright loan to furnish money for

the development of your business.

Then search out and make a list of venture capital organizations. Visit the Small

Business Administration office in your area - pick up the loan application papers they

have - read them, study them, and even fill them out on a preliminary basis - and finally,

check the costs, determine which business publications would be best to advertise in, if

you were to advertise for a partner or investor, and write an ad you'd want to use if you

did decide to advertise for monetary help.

With a listing of all the options available to your needs, all that's left is the

arranging of these options in the order you would want to use them when the time comes

to ask for money. When you're researching these money sources, you'll save time by

noting the "contact" to deal with when you want money, and whenever possible, by

developing a working relationship with these people.

In your documentation section, you should have a credit report on yourself. Use

the yellow pages or check at the credit department in your bank for the nearest credit

reporting office. When you get your credit report, look it over and take whatever steps are

necessary to eliminate any negative comments. Once these have been taken care of, ask

for a revised copy of your report and include a copy of that in your business plan.

If you own any patents or copyrights, include copier of these. Any licenses to use

someone else's patent or copyright should also be included. If you own the distribution,

wholesale or exclusive sales rights to a product, include copies of this documentation.

You should also include copies of any leases, special agreements or other legal papers

that might be pertinent to your business. .

In conclusion, write out a brief, overall summary of your business - when the

business was started, the purpose of the business, what makes your business different,

how you're going to gain a profitable share of the market, and your expected success

during the coming 5-years. . .

The last page of your business plan is a "courtesy page" listing the names,

addresses and phone numbers of personal and business references - persons who've

known you closely for the past five years or longer - and companies or firms you've had

business or credit dealings with during the past five years.

And, that's it - your complete business plan. Before you send it out for formal

typing, read it over once a day for a week or ten days. Take care of any changes or

corrections, and then have it reviewed by an attorney and then, an accountant. It would

also be a good idea to have it reviewed by a business consultant serving the business

community to which your business will be related. After these reviews, and any

changes you want to make, it'll be ready for formal typing.

Hire a professional typist to type the entire plan on ordinary white bond paper.

Make sure you proof-read it against the original. Check for and correct any typographical

errors - then one more time - read it through for clarity and the perfection you want of it.

Now you're ready to have it printed and published for whatever use you have

planned for it - distribution amongst your partners or stockholders, as the business plan

for putting together a winning financial proposal, or as a business operating manual. ,

Take it to a quality printer in your area, and have three copies printed. Don't settle for

photo-copying... Have it printed!

Photo-copying leaves a slight film on the paper, and will detract from the overall

professionalism of your business plan, when presented to someone you're trying to

impress. So, after going to all this work to put it together properly, go all the way and

have it duplicated properly.

Next, stop by a stationery store, variety store or even a dime store, and pick up an

ordinary, inexpensive bind-in theme cover for each copy of your business plan. Have the

holes punched in the pages of your business report to fit these binders and then slip each

copy into a binder of its own.

Now you can relax, take a break and feel good about yourself. . . You have a

complete and detailed business plan with which to operate a successful business of your

own. . . A plan you can use as a basis for any financing proposal you may want to submit.

. . And a precise road-map for the attainment of real success. . .

Congratulations, and my best wishes for the complete fulfillment of all your

dreams of success!!!

In these days, it's becoming increasingly difficult to make ends meet with just one

source of income. Thus, more and more people are investigating the possibilities of

starting their own extra-income business. Many of these part-time endeavors are started

and operated from the comfort and privacy of the home.

Most of these people are making the extra money they need. Some have wisely

and carefully built these extra income efforts into full-time, very profitable businesses.

Others are just keeping busy, having fun, and enjoying life as never before. More

importantly, they are doing something other than waiting for the government to give them

a handout - they are improving their lot in life. You can do it, too!

The fields of mail order selling, multi-level marketing, and in-home party sales

have never been more popular. If any of these kinds of extra income producing ideas

appeal to you, then you owe it to yourself to check them out. But these aren't the only

businesses you can start and operate from home with little or no investment, and in which

you can learn as you go.

If you type, you can start a home-based word processing or secretarial service. If you have

a truck or access to a trailer, you can start a clean-up, hauling, or apartment moving

service. Simply collecting old newspapers from your neighbors can get you started in the

paper recycling business, one of the hottest new businesses in this age of environmental

consciousness. More than a few enterprising folks have found success and fortune by

starting home and apartment cleaning services. If you have a yard full of flowers, you can

make good extra money by supplying fresh cut flowers to restaurants and offices in your

area on a regular basis. Your green thumb could also prompt you to begin an office plant

care service. You might turn a ceramics hobby into a lucrative personalized coffee mug

business. Whatever your ability, there's literally no end to the ways you can start and

operate a profitable extra income business from your home.

The first thing you must do, however, is some basic market research. Find out for

yourself, first-hand, just how many people there are in your area who are interested in

your proposed product or service, and would be "willing to stand in line to pay money for

it." This is known as defining your market and pin-pointing your customers. If after

checking around and talking about your idea with many people over a period of one to

three months, you get the idea that there is a market for your business or service, your

next effort should be directed toward the detailing of your business plan. The more

precise and detailed your plan - covering all the bases relating to how you'll do everything

that needs to be done - the easier it's going to be for you to attain success. Such a plan

should show your start-up investment needs, an advertising plan, production costs and

procedures, a detailed sales program, and exactly how your time will be allocated. Too

often enthusiastic and ambitious entrepreneurs jump in on an extra income project and

suddenly find that the costs are beyond their abilities and the time requirements more than

they can meet. It pays to lay it all out on paper before you get involved, and the clearer

you can visualize everything before you start, the better your chances for success.

Now, assuming you've got your market targeted and you will know who your customers

are going to be, determine exactly how you're going to reach them with your product or

service. Will you advertise in the newspaper? National magazines? On radio? Television?

Itemize all your costs and time requirements. If it all looks good, set your plan in motion

and start making money.

Here is the most important "secret" of starting and building a profitable home-based

business, so read very carefully. Regardless of what kind of business you start, you must

have the capital and the available time to sustain your business through the first six

months of operation. No matter what, do not count on receiving or spending any money

coming in from your business on yourself or for your non-business expenses or bills

during those first six months. All the income from your operation during this initial

period should be reinvested in the business in order for it to grow and reach your planned

first year potential. Once you've passed that first six month milestone, you can set up a

monthly salary for yourself and begin enjoying the fruits of your labor.

If you've got your business plan properly organized and have implemented the

plan, you should at the end of your first year be able to begin thinking about hiring other

people to assume some of your workload. Remember: Starting a successful business is

not a means towards either a job for yourself or a way to keep busy. It should be regarded

as the beginning of an enterprise that will grow and prosper, with you as the top dog.

Eventually, you'll have other people doing all the work for you, even running the entire

operation, while you vacation in the Bahamas or Hawaii and collect regular income from

your initial efforts.

For more details on market research, business planning, advertising, selling, order

fulfillment, and other aspects of home-based businesses, check with the distributor from

whom you received this report. He or she will be able to assist you in finding resources

for your future planning and business success. Best Wishes for Success!

You may be in mail order, direct marketing, or you may be a local merchant with

two hundred employees. Whatever the case, you've got to know how to keep your

business alive during periods of economic recession or anytime the cash flow starts to

tighten up. You have to properly manage your money to keep your business running like a

well-oiled, failure-proof machine. Here are a few tips gathered from a lifetime of

experience.

Always protect yourself from expenditures made on sudden impulse. We've all

bought merchandise or services we really didn't need simply because we were in the

mood, in response to a convincing advertisement, or due to the persuasiveness of a good

salesperson. Later, we wake up and find that we've committed hundreds of dollars of

operating capital to an item or service that is not in the least essential to the success of our

business when other, more important items have been waiting for those dollars.

If your business is incorporated, you can eliminate impulse purchases by including in

your bylaws a clause stating that "All purchasing decisions over (a certain dollar amount)

are contingent upon approval by the board of directors." This will force you to consider

any impulse purchases of considerable cost, and may even cause you to think twice when

considering smaller purchases. If your business is a partnership, develop a policy

declaring that all purchases above a certain level are contingent upon the approval of a

majority of the partners in consultation with one another or an outside third party. You are

more deeply protected if your business is a sole proprietorship. As an individual you have

three days to consider a purchase and to nullify a contract if you should decide otherwise.

While you may think you cannot afford it, be sure that you don't short-change

yourself when considering the professional services of attorneys, accountants, or business

consultants. This especially applies during times of expansion. Anytime you commit

yourself and move ahead without completely investigating all the angles or preparing

yourself for all the possible contingencies, you're skating on thin ice. Regardless of the

costs involved, it always pays off in the long run to seek out the advice of experienced

professionals before taking a major financial risk. For example, an experienced business

consultant can fill you in on the advantages of filing for admission to the 1244 stock

category. While a very simple process, such a move could produce tremendous benefits

for your business. Without qualified advice, you may be missing out on the great

tax' advantages this category affords.

The 1244 status encourages investors to place equity capital into your business. In

the event of a loss, amounts up to the entire sum of the investment can be written off in

the current year. Without the 1244 classification, any losses would have to be spread over

several years, greatly reducing the attractiveness of your company's stock. Any business

owner who does not file for recognition as a 1244 corporation cuts himself off from a

great percentage of prospective investors.

When sales are slow, you must be particularly hard-nosed when people try to sell

you business luxuries. When business is booming, you undoubtedly will allow sales

people to show you new models of equipment or a new line of supplies. However, if your

business is down, skip the frills and concentrate on the basics. Great care must be taken,

however, to remain courteous with your suppliers and allow them to feel free to call back

at another time.

Your company's books should reflect your strict standards, and whoever maintains

them should generate information according to your policies. Thus, you should hire an

outside accountant or accounting firm to calculate the return on your investment, as well

as the turnover on your accounts receivable and inventory. Such an audit or survey should

focus in depth on any or every item within your financial statement that merits special

attention. In this way, you'll uncover any potential financial problems before they become

readily apparent or get out of hand.

Many small companies set up advisory boards composed of outside professionals.

Sometimes known as Power Circles, once in place the business always benefits from the

advice of these boards, especially in times of difficulty. Such an advisory council

typically includes an attorney, a certified public accountant, civic club leaders, owners or

managers of businesses similar to yours, and retired executives. Establishing such an

advisory board of directors is really quite easy because most people you ask will be

honored to serve.

Once your board is set up, you should meet about once a month and present

material for review. Each meeting should be a discussion of your business problems and

include the input from your advisors relative to possible solutions. The members of your

board of advisors should offer you advice as well as alternatives, and provide you with

objectivity. No formal decisions need to be made either at or as a result of your meeting,

but you should be able to gain a great deal from the suggestions you hear.

If you are experiencing a lag in the payment of accounts receivable, take the

necessary steps to insure prompt payment by your customers. You will find that most

customers have the money to immediately pay at least a portion of what they owe you. To

keep them current and to decrease the number of accounts receivable in your files, call

each account on the phone and politely remind them that their account is overdue. If they

are hesitant in responding, or if they continue to fall behind, call and ask for an

explanation of why they're past due. While maintaining a courteous attitude, don't be

hesitant or too gentle when it comes to collecting money. If you develop a polite but no

nonsense approach to the collection of delinquent accounts as part of your operating

procedure, you'll find customers will more quickly pay your invoices rather than risk

having to explain their delay.

Another very good business practice that few business owners pursue is to

methodically build a credit rating with their local banks. During extended periods when

you do experience a positive cash flow, borrow $1000 to $10,000 from your bank every

90 days or so. Simply borrow the money, place it in an interest bearing account, and then

pay it all back at least a month or so before it's due. Such a practice will increase the

borrowing power of your signature and strengthen your ability to obtain needed financing

on short notice. This is the kind of business leverage that will be of great value to you if

or whenever your cash position becomes less favorable.

Definitely join your industry's local and national trade associations. Most of these

organizations have a wealth of information available on everything: details on your

competitors, average industry sales figures, new products, services, and marketing trends.

If you are given a membership certificate or wall plaque, display it conspicuously on your

office wall. Customers like to see such seals of approval and feel additional confidence in

your business when they see them. Also, become a member of one or more civic groups

in your community. Besides the good works that you will be helping perform in your city,

you will be creating a myriad of friendships and business connections that will provide

you an unlimited number of future opportunities.

Another secret that is often overlooked: If at all possible, have your spouse work

in the business with you for at least three or four weeks per year. If for any reason you are

not available to run the business during a period of protracted illness or other emergency,

your spouse will have already become familiar with the people and situations connected

to your business. If your spouse is acquainted with your attorney, accountant, consultants,

creditors, and your major suppliers, he/she will be able to fill-in for you when you most

need it. The long-term advantages of having your spouse work several weeks per year in

your business will greatly outweigh the short-term inconvenience to either one of you.

As often as possible, take advantage of any free business counseling available to

you. The Small Business Administration publishes many excellent booklets, checklists,

and brochures on a large variety of businesses. These publications are available free or for

a minimal charge through the U.S. Government Printing Office. Most local universities

and many private organizations hold seminars at minimal cost or without charge. You

should also take advantage of any services offered by your bank and local library.

The most important aspect of running a small business is to know precisely the direction

in which you're heading. Determine on a day-to-day basis your progress toward your

goals. Always be aware of what your competitors are doing, and practice careful money

management at all times. All this will prepare you to recognize potential problems before

they arise.

Small business survival is based upon knowledge. Knowing in advance any

possible pitfalls along the way will better prepare you to meet the various challenges that

face an entrepreneur. Seeking the advice of knowledgeable counsel, whatever the field,

will help you develop a winning plan and become a success. Seize the opportunity. As the

old saying goes, "A journey of a thousand miles begins with a single step." Take that step

toward your future now!

Almost everyone would like to have additional income so that they might afford

the luxuries their current income cannot provide. Most would like to start some sort of

extra income-producing project. The trouble is, not many of these people seem able to fit

a second job into their time schedules.

While it is true that most people are busy, time for establishing a home-based

extra income project can almost always be found. It may mean giving up or changing a

few of your favorite pastimes - such as spending an evening out with friends or watching

TV - but if you score big with your extra income project, you later will have all the time

you want for doing whatever you gave up to make that business a reality.

First, sit down with pencil and paper and list your daily schedule. What time do

you wake up? Then step-by-step, list the great variety of things you do each day. Most

people will find that they have approximately three hours each day that can be utilized in

a more constructive or efficient manner. As noted above, you may have to give up the

time you spend at the local pub or a few television programs you watch, but it will be

worth it in the long run.

Efficient time management boils down to planning what you're going to do, and

then doing it without backtracking. Each evening before you go to bed, make a list of the

things you must accomplish the next day. Schedule your trips to the store or wherever to

coincide with the other items on the list, making as few separate trips as possible and

taking care of as many things as possible while you're out of the house. Take stock of the

time you spend standing around shooting the breeze - especially the time you spend on

the telephone - and eliminate all that isn't necessary. You may find it helpful to keep a

daily organizer or small notebook handy. In this book, write down all your objectives in

the order you wish to accomplish them. As each is completed, either strike it from the list

or place a mark beside it. Only after your list of imperatives is completed can you begin

devoting yourself to your spare-time job or leisurely pursuits.

Whatever chores you have to do at home, set aside a specific time to do them and

a specific amount of time to be devoted to their completion. For instance, just one hour a

day devoted to yard work would probably make your property the envy of all your

neighbors. Don't try to do a week's work in one big flurry. Whether it's painting your

house, fixing leaky faucets, or mowing your lawn and trimming your shrubs, do a part of

it or one particular job each day, and you'll be amazed at your progress.

Take care of all your mail the day you receive it. Don't let those bills and letters

pile up on you. If you're unable to pay a bill immediately, file it in a special place that's

visible, and note on the envelope the date you intend to pay it. Answer your letters the

same day you get them.

The important thing is to think of time as your most valuable asset, because it is.

So organize! Decide what you have to do, and what you want to do. From there, it's just a

matter of arranging priorities. Once you start listing and planning what you need to

accomplish and then carry out your plans, you'll find plenty of "extra time" for handling

virtually any kind of home-based income-producing project.

People in general may not like routines or schedules, but without a plan to follow

the world would be mired in mass confusion. Laws, ordinances, and regulations are

designed for the purpose of guiding people. We live according to an accepted plan or way

of life, and the better we can organize ourselves, the more productive and happy we

become.

The secret of all financially successful people is organization. A man or woman

who has decided where he or she wants to go and how to get there will not waste

time. Think about it. Review your own activities, and then see if you can find a couple of

extra hours in a day for more constructive accomplishments. When you begin planning,

and when you ultimately become involved in an extra income business, you should work

it exactly as you have organized your regular day-to-day activities - in the most efficient

manner possible. Do what has to be done immediately. Don't try to get done in an hour

something that should realistically take a week. Plan out on paper what you have to do,

what you want to do, and when you are going to do it. Then, get right on each project

without procrastination.

Finally, and above all else, when you're organizing your time and your business,

be sure to set aside some time for relaxation. Schedule a specific time when you and your

spouse can be together. You must not involve yourself in anything to an extent that you

exclude other people - particularly your loved ones - from your life. Reserve time for your

children, both as a family group and as individuals. Time spent in relaxation will mentally

prepare you for the dedication necessary to complete all your objectives in a given day.

Take stock of the time you waste each day. Reorganize your activities to make the

maximum use of your available time and to add an income-producing business to your

schedule. The establishment of a successful spare-time business is a matter of becoming

more efficient in the use of your day. It's relatively easy to do, and you will find that you

not only accomplish a lot more, but you will also discover greater fulfillment in your

business and personal life.

Every year, thousands of people develop an interest in starting their own business.

Many of these have an idea, product, or service they hope to develop into an income

producing business that can be operated from their own homes. If you are one of these

people, here is some practical advice to consider before hanging out your "Open for

Business" sign.

Consider your city's zoning laws. Working from your home in an area zoned "Residential

Only" could place your business contrary to zoning restrictions. Some cities rule out

home businesses involving the coming and going of more than a handful of customers,

clients, or employees. Many businesses that sell or store any item for sale on the premises

also fall into this category. Be sure to check with your local zoning office to find out how

the ordinances in your area may affect your business plans. You may need a special

permit to operate your business from your home. You could find that making small

changes in your plan will help you meet zoning standards.

Obtaining zoning approval for your business can be as simple as filling out an

application, or it could involve a public hearing. Zoning officials will primarily consider

how your business will affect the neighborhood. Will it noticeably increase the traffic on

your street? Will there be a substantial increase in noise? How will your neighbors feel

with your business opening near their homes? Will property values be affected, thereby

decreasing tax revenue?

Many communities grant home occupation permits for businesses that involve

typing, sewing, and teaching, but deny exemptions to photographers, interior decorators,

and home-improvement operations seeking a zoning abatement to run their businesses

from home. Often, even if you are permitted to use your home for a given business, there

will be restrictions that you may need to take into consideration. You must work closely

with your city or county zoning commission in order to save yourself time, trouble, and

dollars.

Occasionally permission will be granted for a home business to operate providing

specific conditions are met. Such requirements might include the providing of off-street

parking for your customers, or a prohibition against posting signs in your residential area.

If you plan to begin a child care, home school, or tutoring service, there is generally a

limit on the number of students you may have at any one time. Child care services,

catering, or operations involving food handling or preparation often require health

permits from the city or county Health Department.

If you are selling something from your home, you may need a vendor's license.

You will also be required to collect sales tax on sales made within your state. Collection

of taxes will require careful record keeping on your part. Check with your state

comptroller's office for more information.

If your business requires any licenses, you will have to file one or more forms

with the agencies under whose jurisdiction you fall. Licensing can be a simple process, or

depending upon the type of business, it may involve the inspection of your home to

determine if it meets local health, building, and fire codes. Should this be the case, you

will need to insure that your facilities meet the local standards. This could involve some

simple repairs or adjustments that you can either do personally or hire out to a handyman

at a nominal cost.

Insurance costs must be figured into the operating expenses of your business. Will

your homeowner's insurance cover the property and liability involved in your new

business? If a customer injures himself while on your property, will you have enough

insurance to cover any claims against you? This must be determined before you begin

operation, so be sure to talk it over with your insurance agent.

Tax deductions, once one of the advantages of engaging in a home business, are

not as attractive as they once were. To be eligible for business related deductions today,

the Internal Revenue Service requires that you use the part of your home claimed as a

deduction "exclusively and regularly" as either the principal location of your business or

the place reserved to meet patients, clients, or customers. Thus, if you work out of the

corner of the den, but the family also uses the room for watching television, you cannot

deduct the space as a business expense. Your personal telephone, if used for anything

other than business calls, is not a legitimate deduction. Carefully review the tax laws

before filing for any home business deductions.

There are a couple of exceptions to note within the "exclusive use" tax rule. One is the

storage of inventory in your home. If you use your home as headquarters for a trade or

business in which you sell retail or wholesale products, the IRS declares that storage

space can be deducted if the storage space is used on a regular basis and is a separately

identifiable space. If this condition is met, you may legitimately deduct use of the area.

The deductible use of your home as a daycare facility providing care for children,

the elderly, or the physically or mentally disabled must also meet several requirements.

While not restricted by "exclusive use" regulations, use of the home can only be

considered deductible if you comply with all state laws and regulations for the licensing

of such institutions. Because these standards are numerous, strict, and often difficult to

meet in a typical residential home, you probably will not be able to claim this deduction.

In general, to be eligible for business deductions you must be engaged in an

activity with the intent of making a profit. It's presumed you meet this requirement if your

business shows a profit in any two years of a five-year period. Once you are this far along,

you can deduct business expenses such as supplies, subscriptions to professional journals,

and an allowance for the business use of your car or truck. You can also claim deductions

for related business expenses such as utilities, and in some cases, even a new paint job for

your home.

The IRS is going to treat the part of your home you use for business as though it

were a separate piece of property. This means that you'll have to keep good records and

take care not to mix business and personal matters. No specific method of record keeping

is required, but your records must clearly justify any deductions you claim. You can begin

by calculating what percentage of the house is used for business, either by number of

rooms or by square footage. Thus, if you use one of five rooms for your business, the

business portion is 20 percent. If you run your business out of a room that's 10 by 12 feet

and the total area of your home is 1,200 square feet, the business-space factor is 10

percent. An extra computation is required if your business is a home daycare facility.

Check with your tax preparer and the IRS for an exact determination. If you're a renter,

you can deduct the portion of your rent which is attributable to the business share of your

house or apartment. Homeowners can take a deduction based on the depreciation of the

business portion of their house.

There is a limit to the amount of business expense you can deduct from your

federal income tax. This is equal to the amount of gross income generated by the business

minus those home expenses you could deduct even if you weren't operating a business.

For example, real estate taxes and mortgage interest are deductible regardless of any

business activity in your home, so you must subtract from your business' gross income the

percentage that's allowable to the business portion of your home. You thus arrive at the

maximum amount for home-related business deductions.

If you are self-employed, you will claim your business deductions on Schedule C,

Profit (or Loss) for Business or Profession in your annual income tax return. The IRS

emphasizes that claiming home business deductions does not automatically trigger an

audit of your tax return. Even so, it is always wise to keep meticulously within the proper

guidelines and maintain detailed records if you claim business related expense. You

should discuss this aspect of your operation with your tax preparer or with a person

qualified in the field of small business taxes.

If your business earnings aren't subject to withholding tax and your estimated

federal taxes are $100 or more, you'll probably be filing a Declaration of Estimated Tax,

Form 1040- ES. To complete this form, you will have to estimate your income for the

coming year and also make a computation of the income tax and self-employment tax you

will owe. Self-employment taxes pay for Social Security coverage. If you have a salaried

job covered by Social Security, the self-employment tax applies only to the amount of

your home business income that when added to your salary reaches the current ceiling.

When filing this form, you must make the first of four equal installment payments on

your estimated tax bill.

The total amount of your taxes due can also be decreased if you contribute to a

Keogh or an Individual Retirement Account (IRA ). A husband and wife can deduct up to

$2000 each from their total gross income if the amount is deposited into such a retirement

account. The money will continue to accrue with interest tax deferred until it is

withdrawn. Check with your bank, accountant, or broker for further details.

One of the most important but least understood and appreciated aspects of any

business is its bookkeeping or accounting system. Because very few people know much

about the reasons for a bookkeeping system, many are frightened by the thought of the

work involved in setting up such a system and the drudgery of daily maintenance.

There's really nothing complicated about bookkeeping. It's as simple as keeping a

daily diary and maintaining your personal checkbook. It is basically a matter of recording

all of your incoming money (deposits) and keeping a record of the money you spend

(expenses). There are numerous simple bookkeeping programs available for small

computer users. If you have a home computer that you will be using for your business, try

out some of the shareware or public domain programs that can be used by small

businesses free of charge or for a small fee. If you do not have a computer, don't worry.

This report will show you how to set up a bookkeeping system that is simple and easy to

use.

First, open a business checking account for your extra-income business with the

local bank where you usually do business. Generally, this is simply a matter of asking the

new accounts teller for a business account registration card. The bank will have you fill

out the registration and signature card, make an initial deposit, order your checks to be

imprinted with your company name, and you're ready to go. Into this account you will

deposit all your incoming monies, and from this account write checks to pay for your

expenses.

At a local stationery store pick up a loose-leaf notebook and a supply of paper.

You'll also want to pick up a supply of index tabs at the same time, either to separate the

months or the accountability sections for each item sold. Assuming that you want to make

your bookkeeping system as simple as possible, while at the same time keeping it as

efficient as is necessary, here's a method that will meet all of your needs.

On the first page of your notebook, write on the top line and in the middle of the

page: the day, month and year that you officially start your business. As your orders come

in by mail and as you open each envelope, begin at the left hand side of the page and jot

down the amount you received, what item was ordered, from whom, and their zip code.

The page might look like this:

Monday - January 1,1993

$ 14 Book #1405 Listen 91108

$100 Dealership Fee Barton 39204

$ 10 Book #261 Marks 06978

TOTAL INCOME $124 EXPENSES $0

That's all there is to it. It simply boils down to recording what you receive and

what you spend. Any expenses you incur can be placed in the same column or in a second

column just to the right of the column for incoming amounts. The next entry, immediately

under that first day's entry, might look like this:

Tuesday - January 2, 1993

$100 Dealership Fee Johnson 92100

$ 20 Printing Expenses Don's Copy Shop

$ 10 Book #4321 Simms 32323

TOTAL INCOME $110 EXPENSES $20

Carry on with this recording of the money you receive and spend each day with

similar entries for each day of the week. Do this every day Monday through Saturday for

each week. It's simple, uncomplicated, and a positive record of your business activity. It is

essentially the same as what you do with your personal checkbook. It will be best to keep

a separate ledger listing all of your bank deposits and withdrawals by check. This can

then be compared with your daily business ledger to assure accuracy in both ledgers.

Then at the end of each month, transfer this daily diary information to one of the

low cost bookkeeping registers from which your tax consultant or accountant can work.

Your tax preparer won't want to work from your daily diary, and will not transfer the

information you record in it to a formal bookkeeping register without charging you a

small fortune. It's not that big of a job, and if you do it after the close of business on the

last day of each month, it will take only a very few minutes. Then, of course, when you're

ready to do your taxes, you simply give your bookkeeping register to whoever is going to

do your taxes, and you're home free.

The bookkeeping register you'll need can be any simple columnar notebook. All you

really need is a notebook with a number of columns marked off, a title written at the top

of each column, and a record of the money received for each day relative to the product or

service each column represents. Then at the end of each month, you can simply add the

totals from each column and you'll instantly know how much money you took in from

each of your offers.

Your expenses are listed in your bookkeeping register in the same method as your

income was, except in separate columns. You will title each of the columns with your

regular expense categories such as Postage, printing, shipping containers, etc. Record

your expenditures for items falling into those categories under the appropriate headings.

At the end of each month, it's a simple matter to add the totals from each column and

know exactly where you stand relative to profit or loss - how much you took in compared

to how much you spent.

Bookkeeping and accounting is very easy and should not scare you. Just keep it

simple and up-to-date. Complete records will help you follow the sales progress of each

book in your inventory, and will allow you to increase your advertising to promote those

books that need additional help and to feature those books that appeal to the greatest

number of buyers. Good Luck and Best Wishes for Success!

The task of raising money for a business is not as difficult as most people seem to

think. This is especially true when you have an idea that can make you and your backers

rich. Actually, there's more money available for new business ventures than there are

good business ideas.

A very important rule of the game to learn: Anytime you want to raise money,

your first move should be to put together a proper prospectus. This prospectus should

include a resume of your background, your education, training, experience, and any other

personal qualities that might be counted as an asset to your potential success. It's also a

good idea to list the various loans you've had in the past, what they were for, and your

history in paying them off.

You'll have to explain in detail how the money you want is going to be used. If it's

for an existing business, you'll need a profit and loss record for at least the preceding six

months, and a plan showing how this additional money will produce greater profits. If it's

a new business, you'll have to show your proposed business plan (see our report #3503),

your marketing research, and projected costs, as well as anticipated income figures with a

summary for each year over at least a three year period. It'll be advantageous to you to

base your cost estimates high, and your income projections on minimal returns. This will

enable you to "ride through" those extreme ups and downs inherent in any beginning

business. You should also describe what makes your business unique - how it differs

from your competition, and the opportunities for expansion or secondary products.

The prospectus will have to state precisely what you're offering the investor in

return for the use of his money. He'll want to know the percentage of interest you're

willing to pay, and whether monthly, quarterly, or on an annual basis. Are you offering a

certain percentage of the profits? A percentage of the business? A seat on your board of

directors? Remember: the investor is seeking as much as he can get in return for the use

of his money, regardless whether it's a short term or long term deal. In order to attract,

interest, and persuade him to "put up" the money you need, you'll not only have to offer

him an opportunity for big profits, but you'll have to spell it out in detail. Further, back up

your claims with proof from your marketing research.

Venture investors are usually quite familiar with "high risk" proposals, and they

all want to minimize that risk as much as possible. Therefore, your prospectus should

include a listing of your business and personal assets with documentation - usually copies

of your tax returns for the last three years or more. Your prospective investor may not

know anything about you or your business, but if he wants to know he can pick up his

telephone and discover everything there is to know within 24 hours. The point is, don't

ever try to "con" a potential investor. Be honest with him. Lay all the facts on the table for

him. In most cases, if you've got a good idea and you've done your homework properly,

an interested investor will understand your position and offer more help than you dared to

ask.

When you have your prospectus prepared, know how much money you want,

exactly how it will be used, and how you intend to repay it, you're ready to start looking

for investors. As simple as it seems, one of the easiest ways of raising money is by

advertising in a newspaper or a national publication featuring such ads. Your ad should

state the amount of money you want - always ask for more money than you need so you'll

have room for negotiating. Your ad should also state the type of business involved (to

separate the curious from the truly interested), and the kind of return you're promising on

the investment.

Take a lesson from the party plan merchandisers. Set up a party and invite your

friends over. Explain your business plan, the profit potentials, and how much you need.

Give them each a copy of your prospectus and ask that they pledge a thousand dollars as a

non-participating partner in your business. Check the current tax regulations. You may be

allowed up to 25 partners in Sub-Chapter S enterprises, opening the door for anyone to

gather a group of friends around himself with something to offer them in return for their

assistance in capitalizing his business.

You can also issue and sell up to $300,000 worth of stock in your company

without going through the Federal Trade Commission. You'll need the help of an attorney

to do this, however, and of course a good tax accountant as well wouldn't hurt. However,

it's always a good idea to have an attorney and an accountant help you make up your

business prospectus. As you explain your plan to them, and ask for their advice, casually

ask them if they'd mind letting you know of or steer your way any potential investors they

might happen to meet. Do the same with your banker. Give him a copy of your prospectus

and ask him if he'd look it over and offer any suggestions for improving it. And of course,

ask that he let you know of any potential investors he or she may come across. In either

case, it's always a good idea to let them know you're willing to pay a "finder's fee" if you

can be directed to the right investor.

Professional people such as doctors and dentists are known to have a tendency to

join occupational investment groups. The next time you talk with your doctor or dentist,

give him a prospectus and explain your plan. He may want to invest on his own or

perhaps set up an appointment for you to talk with the manager of his investment group.

Either way, you win. When you're looking for money, it's essential that you get the word

out to as many potential investors as possible.

Don't overlook the possibilities of the small business investment companies in

your area. Look them up in your telephone book under "Investment Services." These

companies exist for the sole purpose of lending money to businesses which they feel have

a good chance of becoming successful. In many instances, they trade their help for a small

interest in your company.

Many states have Business Development Commissions whose goal is to assist in the

establishment and growth of new businesses. Not only do they offer favorable taxes and

business expertise, most also offer money or facilities to help a new business get started.

Your local Chamber of Commerce is the place to check for further information on this

idea.

Industrial banks are usually much more amenable to making business loans than

regular banks, so be sure to check out these institutions in your area. Insurance companies

are prime sources of long term business capital, but each company varies its policies

regarding the types of businesses it will consider. Check with your local insurance agent

for the name and address of the person to contact. Also, it's often possible to get the

directors of another company to invest in your business. Look for a company that can

benefit from your product or service. Be sure to check at your public library for available

foundation grants. These can be the final answer to all your money needs if your business

is perceived to be related to the objectives and activities of the foundation.

Finally, you may want to enlist the services of a money broker or finder. These are people

who take your prospectus and circulate it among various known lenders or investors.

They always require an up-front retainer fee, and there's no way they can guarantee to get

you the loan or the money you want. There are many very good money brokers, and there

are some that are not so good. They all take a percentage of the gross amount that's finally

procured for your needs. The important thing is to check them out fully. Find out about

the successful loans or investment plans they've arranged, and what kind of investor

contacts they have. Do all of this before you put up any front money or pay any retainer

fees.

There are many ways to raise money - from staging garage sales to selling stocks.

Many foreign investors have money to invest in American and North American

companies. Don't make the mistake of thinking that the only place you can find the

money you need is through the bank or finance company. Start thinking about the idea of

inviting investors to share in your business as silent partners. Consider obtaining

financing for a primary business by arranging financing for another business that will

support the start-up, establishment, and development of the primary business. Consider

the feasibility of merging with a company that's already organized, and with facilities that

are compatible or related to your needs. Give some thought to the possibilities of getting

the people supplying your production equipment to co-sign the loan you need for start-up

capital.

Remember: there are thousands upon thousands of ways to obtain business startup

capital. This is truly the age of creative financing. Disregard the stories you hear of

"tight money" and start making phone calls, talking to people, and making appointments

to discuss your plans with the people who have money to invest. There's more money

now than there's ever been for new business investment. The problem is that most

beginning business builders don't know what to believe or which way to turn for help.

They tend to believe the stories of tight money and they set aside their plans for a

business of their own until a time when startup money might be easier to find. The truth

is, now is the time to make your move. Now is the time to act. The person with a truly

viable business plan and the determination to succeed will make use of every possible

idea that can be imagined. The ideas suggested here should serve to propel you toward the

unlimited sources of monetary help available and waiting for you !

How often have you thumbed through a business opportunity magazine, noticed a

franchise opportunity advertisement, and felt you'd really like to get in on that...if only

you had the money? If you're like most who are seeking greater opportunity and wealth,

this probably happens with you more often than you care to admit, except perhaps in

strictly private conversations.

When the average person sees one of these opportunities, or comes up with a

similar idea of his own, the problems of start-up capital may seem formidable. But in

reality, they may not be. In fact, just about anyone with a good credit record and an

"insider's sense of business" can get the capital he or she needs, whenever it's needed. The

secret is in knowing how to put together a proper proposal, and to present it to the right

person. These are the "how-to" instructions we're going to give you in this report.

The first thing you're going to need is a complete business plan. This is a complete

and detailed description of exactly how you intend to operate the proposed business. Your

business plan should detail precisely the product or products you plan to sell; how you're

going to produce or manufacture the product; your costs (inventory costs if you're

purchasing them from a supplier); who is going to sell those products for you; how they're

going to be sold; the attendant costs; when you expect

to recoup your initial investment; your plans for growth or expansion; and the total dollar

amount you're going to need to make it all work according to your plan. Your business

plan must be detailed complete with projected income and expense figures through at

least the first three years of business. Now, assuming you have your business plan all

worked out, put together and ready for presentation with your request for capital, let's talk

about your capitalization proposal.

First, keep in mind that whenever you ask somebody for money, whether it's for a

small personal loan or a large amount of money to finance a business, you're involved in a

selling situation. You have to prepare a "sales presentation" just as if you were getting

ready to sell an automobile or refrigerator. Within this sales presentation you must have

all the facts and figures; you must anticipate the questions and the possible objections of

the prospective lender with answers or explanations; and you must "package" it as

impressively as you would yourself for an audience with the president of IBM or General

Motors.

The more money you ask for, the more "in-the-know" will be the people you want to

borrow from, and so the more detailed and organized your proposal must be. This

shouldn't cause you too much worry however, because you can hire a CPA to help you

put it together properly, once you've got the facts and have a business plan he can work

from.

Look at it this way: The more money you request for your business, the more your

lenders or prospective investors are going to want to know about you, your planning, and

your business. They want to be impressed with the fact that you've done your homework;

they want to see that you've researched everything and documented your facts and figures;

they want to be assured by your presentation that investing in your business will make

money for them. It's just that simple at the bottom line. Unless you can instill confidence

in them with your business plan and loan or investment proposal, they're just not going to

give much positive thought to your request for capitalization.

So you'll need a balance sheet describing your net worth--the worth of what you

own compared to the amount of money you owe. You'll also have to prove your stability

and money-management talents relative to how successful you've been in paying off past

obligations. If you have had credit problems in the past, get them "cleaned up", or at least

explained on your file at your local credit bureau office. Under the law, credit bureaus are

required to give you all the information they have about you in their files, and it's your

right to correct any errors or enter explanations regarding negative reports on your credit.

Do this without fail because prospective lenders or investors will definitely check your

credit history.

So, now you have your balance sheet prepared; your credit history organized in a

light that's favorable to you; your business plan (with costs and income projected over the

coming three years), you're ready to start looking for lenders or investors.

Almost all franchisers offer help in setting up with one of their franchises. Most will go

out of their way to assist you in getting the financing you need. Some will lend you the

entire amount, with payments coming out of the income they expect you to make from

their franchise operation. Many will carry this loan themselves, while others will carry

part of it and find you a lender to finance the remainder.

Franchisers have two objectives in mind when they offer franchises to the public:

They are trying to expand their operation, thus increasing their profit, and they are trying

to raise capital for themselves. Generally speaking, if you have a good credit history, and

if they feel you have the necessary business personality to achieve success with one of

their operations, they'll do everything within their power to get you in a franchise outlet.

Keep this in mind the next time you see an advertisement for a promising franchise

opportunity requiring a substantial amount of cash outlay. You don't necessarily have to

have all the money. They want you, and they'll help you!

Many people seem to be unaware that most of today's largest corporations started

on a shoestring on borrowed money. Many people seem to feel that unless they've got it

all "in hand" in savings, then they'll just have to keep plugging away until they can save

up enough to take the big plunge. Nothing could be farther from the truth. Just a quick bit

of research will show that 999 out of every 1,000 businesses were begun on borrowed

money.

Look to your family and friends for financial help. Approach them in a businesslike

manner; tell them about your idea or plans, and ask them for a loan. Agree to sign a

formal statement to pay them back in three, five or ten years, with interest.

When you have your proposal assembled, you might even want to think of a limited

partnership or even a general partnership arrangement as a way to finance your project. In

any kind of partnership, each partner shares in the profits of the company, but in a limited

partnership, each person's loss liability is limited to the amount of money he initially

invested. The truth is, in this kind of a situation, you'll be doing all the work and sharing

your gain with your partners, but then it's a fairly sure way to obtain needed financing.

Another common method of obtaining business financing is thru second mortgage

loans on a home or existing piece of property. Say you purchased a home ten years ago

for $35,000, and today the assessed valuation is $85,000, with a mortgage of $25,000 still

outstanding. A lender may consider your home to be security or collateral for a loan up to

$60,000. In many instances, this is the easiest and surest way of getting the money needed

for franchise or other business investment. And, it makes sense; you've got "net worth"

available that is doing nothing but sitting there. Take this equity and invest it in a

worthwhile business, and you could double or triple your net worth each year for the rest

of your life.

Deciding to obtain a second mortgage on your home in order to finance a business

opportunity is without doubt a major decision, but if you are sure about your investment

project, and are determined to succeed, you owe it to yourself to go ahead. You could

incorporate yourself, borrow money from your family through a second mortgage on your

home, and protect against the loss of your home through the Federal Homestead Act. The

important point here is that all business opportunities involve risk and sacrifice. It's up to

you to determine the feasibility of your success with your proposed venture, then decide

on the best way possible to proceed.

In every instance where you run into reluctance on the part of a lender to lend you

the money you need, explore the feasibilities of "two- name" or "co-signed" loans. You

can have the franchiser sign with you, or one of your suppliers, a business associate or

even a friend. Oftentimes you can borrow or rent collateral such as stocks, bonds, time

certificates, business equipment or real estate, and in this way give greater confidence to

the lender in your abilities to repay the loan. Whenever you can show a contract from

someone who has agreed to purchase a certain number of your products or services over a

specified period of time, you have another important piece of paper that most lenders will

accept as collateral. Still another possibility might be to get a bank or a firm that has

loaned you money in the past to guarantee your loan. They simply guarantee that they'll

lend you money in the future if ever the need should arise.

Going straight to you neighborhood bank, applying for a business loan and

walking out with the money is just about the most unlikely of all your possibilities. Banks

want to lend money, and they must lend money in order to stay in business, but most

banks are notoriously conservative and extremely reluctant to lend you money unless you

have a "regular income" that "guarantees" repayment. If and when you approach a bank

for a business loan, you'll need all your papers in order your financial statement, your

business plan, credit history and all the endorsements you can get relative to your

succeeding with your planned enterprise. In addition, it would be a good idea to take

along your accountant just to assure the banker that your plan is verifiable. In the end,

you'll find that it all boils down to whether or not the bank officer studying your

application is sold on you as a good credit risk.

Thus you must impress the banker not only with your proposal, but with your

appearance and personality as well. In dealing with bankers, never show an attitude of

doubt or apology. Always be positive and sure of yourself. However, don't come on so

strong to them that you're either demanding or overbearing. Just look good, know your

stuff, and project an attitude of determination to succeed.

Your best bet, in attempting to get a business loan from a bank, is to deal with

commercial banks. These are the banks that specialize in investment loans for going

businesses, real estate construction, and even venture programs. Look in the yellow pages

of your telephone or business directories; call and ask for an appointment with the

manager; and then explore with him the possibilities of a loan for your project. One of the

"nice things" about commercial banks is that even though they may not be able to approve

a loan for your business ideas, they will almost always give you a list of names of

business people who might be interested in looking over your proposal for investment

purposes. A lot of commercial banks stage investment lectures and seminars for the

general public. If you find one that does, attend. You'll meet a lot of local business

people, some of whom may be able to and interested in helping you with your business

plans.

When you're looking for money to move on a business deal, it does not really

matter where the money comes from, or how it all comes about It's important that you

get the money, and at terms that are suitable to you. Thus, don't overlook the

possibilities of an advertisement for a lender or investor in your local papers. Place your

ad as well in national publications reaching people looking for investments. Other avenues

to seriously consider are foundations that offer grants, local dental and medical

investment groups, legal investment groups, business associations, trust companies and

other groups or organizations looking for tax shelters.

Basically, it isn't a good idea to go to a finance company or other commercial lender of

this type for a business loan. The most obvious reason is the high interest rates you have

to pay. These companies borrow money from larger money lenders, and then turn around

and lend it to you at a higher interest rate than they pay. Herein lies the means by which

they make money from granting loans to you. The more it costs them to provide the

money for you, the more it's going to cost you to borrow their money. The only element in

your favor when borrowing from one of these agencies is that most will generally lend

you money against collateral other lenders just won't accept. Insurance companies,

pension funds, and commercial paper houses are not too out of sight with their interest

rates, but they generally will not even consider talking to you unless you're requesting

$500,000 or more. They'll also pretty much require that your business proposal be backed

by the best possible plan.

Finally, the bottom line is this: You must have a well-researched and detailed

business plan; you must have all your documents and projections put together in an

impressive presentation; and then, you will have to be the one who does the final selling

of your proposal to the investor or lender. This means your appearance, personality and

attitude, because make no mistake about it before anyone lends you any sizeable amount

of money, they're going to want to take a close look at you personally before they hand

over the money. Actually, the different ways of financing a franchise opportunity are as

many and varied as your own creativity.

The sources of obtaining money are virtually limitless, and available to anyone

with an idea.

One word of caution before you jump into any franchise purchase agreement: The price

you pay to participate in a franchise operation is not always the total cost involved in

getting the business off the ground. With some franchise operations, you may find other

costs such as down payments on the purchase of property, building construction costs,

remodeling or site improvements, equipment, fixtures, signs, advertising, and training.

Virtually all franchise deals require that in addition to the purchase price or the license fee

of the franchise, you're required to give a certain percentage of your gross business

income to the franchiser, plus extra payments for promotion and administrative costs.

Above all else, before you get involved in a franchise, or any business venture -for that

matter, make sure you've conducted a complete and thorough investigation of the

opportunity presented. If it's a good deal, then go with it; but if you have any doubts or

feel as though you're getting in over your head, back off and look around for something

not quite so ambitious, or perhaps expensive.

There are a lot of good franchise opportunities, and some not so good. It's

important that you be sure of what you're investing in, and that you can make money with

it. From there, preparing the proper business plan and the necessary financing, while not

always a snap, can be done. Now's the time to do it! We wish you outstanding success

with your franchise business.

Franchise businesses are booming. From hamburger restaurants to frozen yogurt

shops, from greeting card outlets to videotape rental stores, the list continues to increase.

The people setting up franchise ideas and businesses know a good thing, and are strongly

promoting their ideas with big money national advertising. Franchises for just about every

conceivable kind of business are being sold in ever increasing numbers.

Some franchises are very good. They treat both the franchiser and the franchisee

very well. Others are very one-sided. Still others are almost total rip-offs that can trap one

into paying ten to fifty times the actual value of the business idea, equipment, or whatever

it is they are trying to sell.

Before putting any money into a franchise, you should investigate everything

completely. We've prepared a list of questions you should be asking and to which you

should get satisfactory answers to before investing.

Has your attorney studied the franchise contract, discussed it completely with you,

and do you both approve it without reservations?

Does the franchise require you to take any steps which are either illegal or even

border on

illegal, or are otherwise questionable or unwise in your state, county, or city?

Does the franchise give you an exclusive territory for the length of the franchise

period, or

can the franchiser sell a second or third franchise in your territory?

Is this franchiser connected in any way with any other franchise company handling

similar

.products or services?

If you answered yes to the above question, what is your protection against the

second

franchising company?

Under what circumstances can you end the franchise contract, and at what costs to

you?

If you sell your franchise, will you be compensated for your goodwill or will it be

lost to

you?

How many years has the firm offering you the franchise been in operation?

Does the company offering you this franchise have a reputation for honesty and fair

dealing among its franchisees?

Has the franchiser shown you any certified figures indicating exact net profits of

one or

more of its members, and have you personally checked the figures with these people?

Will the franchiser assist you with:

A management training program?

An employee training program?

A public relations and advertising program?

Capital?

Credit?

Merchandising ideas?

If needed, will the franchiser assist you in finding a suitable location?

Is the franchising firm adequately financed so that it can carry out its stated plans?

Does the franchiser have experienced management, trained in-depth?

Exactly what can the franchiser do for you that you cannot do for yourself?

Has the franchiser investigated you carefully enough to assure itself that you can

successfully operate at a profit to both of you?

Does your state have a law regulating the sale of franchises, and has the

complied with that law to your satisfaction?

How much equity capital will you need to purchase the franchise and operate it

until

your income equals your expenses?

If you can get the answers to each of these questions, and those answers satisfy

you, then you're probably thinking about buying into a pretty good franchise deal.

However, if you're in doubt about any of these points, be sure to check it out and know

the answers for certain before you invest or sign anything.

Buying a franchise can give you a measure of security, and in some cases, surefire

profits. Business surveys show that fewer than 20 per-cent of all new franchised

businesses fail. This is in comparison to a 60 to 80 percent failure rate for all new

businesses started in this country each year.

Information regarding specific franchising ideas can be found in the franchising

directories, which are generally available at the local library. Often there will be a notice

posted in franchise outlets themselves.

If you can afford the entry into this business, statistics are on your side. You are

now armed with some CAUTION and STOP and GO signs!

The opportunities for getting free advertising for your product or services are

limited only by your own imagination and energy. There are so many proven ways of

promoting your own objectives without cost that it literally boggles the mind to think of

listing them.

One method is to write an article relative to your particular expertise and submit it

to all the publications and media dealing in the dissemination of related information. In

other words, become your own publicity and sales promotion writer. Get the word out.

Establish yourself as an expert in your field, and tag everything you write with a quick

note listing your address and offer for a free catalog, dealership opportunity, or more

information.

Another excellent way of gaining free publicity is by becoming a guest on as

many of the radio and television talk shows as possible. With the tremendous growth in

the number of radio stations featuring a talk format, your chances of gaining access to this

monumentally large audience are very good. Now, with the development of cable

television stations also dedicated to talk-only formats, your chances are even greater. It is

actually much easier to become a guest than most people realize. Write a letter to the

producer of the programs you have in mind, and then follow up with a personal visit or

telephone call. Your initial contact should emphasize that your product or service would

be of interest to the listeners or viewers of the program, perhaps even saving them time or

money.

Other ways of getting free or very inexpensive exposure include the posting of

advertising circulars on all the free bulletin boards in your area, especially the

laundries, grocery stores, and beauty or barber shops. Don't discount the idea of

handing out circulars to all the shoppers in busy shopping centers and malls, especially on

weekends. You can also enlist the aid of high school students in your area to hand out

circulars door-to-door.

Some of the more routine methods of inexpensive advertising include having a

small promotional blurb relative to your product or service printed on the front or back of

your envelopes at the time you have them imprinted with your return address. Also, be

sure to check all the publications that carry the kind of advertising you need. Many mail

order publications just getting started offer unusually low rates to first-time advertisers, a

free-of-charge insertion of your ad when you pay for an order to run three issues or more,

or special seasonal ad space at greatly reduced rates. There are also a number of

publications that will give you Per Inquiry (PI) space. PI advertising is an arrangement by

which all orders come directly to the publication and they take a percentage commission

from each order, forwarding the orders on to you for fulfillment.

Many publications will give you a contract for stand-by advertising space. Such a

contract requires that you send the publisher your ad, and they hold it until they have

unsold space available. Then at a price that's always one third or less than the regular

price for the space you need, the publisher inserts your ad. Be sure to check in with the

suburban and neighborhood newspapers for such an arrangement as well. Many big-city

newspapers will include a neighborhood section with the daily paper, and insert it for

newspapers being sold only in that section of town. Ad rates in neighborhood sections are

often less expensive than placing an ad that will appear in a section delivered to the entire

readership of the city.

If you send out or publish any kind of catalog or ad sheet, get in touch with all the

other publishers and inquire about the possibilities of exchange advertising. Other

publishers will run your ad in their publication in exchange for your running an ad for

them of comparable size in yours. This is a popular form of advertising, and time has

proven that it works well.

Finally, there's nothing in the world that beats the low cost and tremendous

exposure you get when you advertise a free offer. Simply run an ad offering a free report

of interest to most people. Ask for a self-addressed, stamped envelope, and depending on

the appeal of your report and the circulation of the publication in which your ad appears,

you could easily be inundated with responses! As the responses come in, send them each

a copy of your simple one-page report. Include a full page advertisement for your book or

other product on the backside of the report. The trick here, of course, is to convert a large

percentage of these responses into sales. This is done via the tag-line at the end of the

report offering an invitation to the reader to send for more information, by the full page

ad printed on the back of the report, and the other offers you include in the complete

information package you return.

The methods of gaining free or low cost advertising for your business or product

are limited only by your imagination. Unleash your creative powers. By combining the

myriad of ideas available to you with the dedication to make yourself a success, you will

easily reach the goals that you have established for yourself and your business. Make your