Archive for June 2nd, 2009

Why small businesses fail

Each and every day, there are an alarming number of small businesses that cease to exist. Why do small businesses fail? Well, the fact is, that according to research, around half of all small businesses that begin doing business in any given year will shut down within two years of starting out. Some of the reasons small businesses fail have to do with economic pauses or even just dumb luck, but most of the time when a business fails it is because the business or the business owner has made some sort of mistake or even a series of significant mistakes.

Here are some of the most common reasons small businesses fail.

Insufficient planning. In many cases, a business owner may not spend the amount of time he ought to spend in order to plan before he opens his business. If he is going to be successful in a small business, he has to be able to look down the road at the long term prospects involved in his business.Insufficient business skills. Just because someone is good at what it is that she does, doesn’t mean she has a good head for business. If she is going to be successful in her endeavors, she has to learn things about bookkeeping, inventory and all sorts of business principles that may not have anything to do with what her actual business is.Bad marketing. It isn’t enough to have an excellent service or an amazing product. You have to be able to let people know about your product or service. You have to be able to tell people why they need to buy your product or to hire you. If you have poor marketing, you are not going to succeed in your small business.Insufficient money. It takes time for a small business to turn a profit. Someone can’t open a business one day and expect to be turning a profit in a matter of just a few days. If the small business owner thinks that he is going to become profitable in just a few days, a few weeks or even a few months, he probably has a lot to learn about small business.Staffing problems. If a small business is going to survive, it is eventually going to have to hire somebody beyond the person that is starting the business. Choosing the right people to hire and knowing how many people to hire and to do what jobs is an important part to small businesses success. Inability to retain customers. Repeat business is the lifeblood of any successful small business. You can almost guarantee that a small business will fail if it does not have customers coming back more than once. For a business to succeed, you have to be able to get customers through the door more than just one time.

While these aren’t the only reasons a small business fails, they are some of the most common things that can cause a small business to fail.

Posted by science on June 2nd, 2009 No Comments

Be your own boss with a home based business

HOW I STARTED & OPERATED A NURSERY ON A (very worn) SHOESTRING

I worked for a couple of decades for wholesale and retail nurseries in practically every capacity one could. I’d been a transplanter, waterer, propagator, delivery driver, greenhouse foreman and nursery manager. Over the years, I also amassed quite a collection of my own plants.

One spring I found myself laid-off from my job and living on very meager unemployment compensation.

The rental house we lived in at the time was surrounded by about of an acre of land and, looking around the yard one day, I thought to myself: I’ve been running nurseries for other people all these years - why not start a little nursery of my own right here at home and start making money for me for a change?

I knew that I would need at least a small greenhouse for sprouting seeds in January and February in order to have plants ready for sale by spring but I had almost no money with which to build one.

I’d rescued some pieces of U-shaped, galvanized pipe that a nursery I’d worked for a couple of years previously was throwing away. The pipes were used as frames over which black cloth was stretched in order to force-bloom chrysanthemums by regulating the sunlight.

I utilized used, round, wooden posts as center supports and shorter, used 2×4s for outside wall supports nailed to pieces of plywood to hold them upright. Then I inserted the ends of the pipes into holes I’d drilled on the tops of all the posts - forming the ribs of the roof of the greenhouse. Next, I created a frame entirely around the bottom of the structure using used 2×4 scraps. After constructing a doorframe on one end and a frame to hold an air-grate that I bought at the recycle center at the local dump on the opposite end, I stretched clear plastic over the entire shell and secured it to the bottom 2×4 frame using a staple gun. I then built a door out of some scraps of 1×1s and 2×2s that I rescued from a big dumpster at a door manufacturing company in a nearby town.

In order to keep the plastic shell from ripping apart when expanding and contracting in high winds, I bought some plastic bird netting (used for wrapping fruit trees to protect crops from birds), stretched it tightly over the top of the plastic and stapled it, as well, to the bottom 2×4 frame.

At first, I used anything I could find for plant benches: Used wooden pallets, pieces of used plywood on concrete blocks and old metal racks. I also built some slatted benches from 1×1 and 1×2 scraps

of lumber from the door company dumpster.

While the completed greenhouse and plant benches were a good start, an essential part of my nursery was sorely lacking: Plants!

So, I set about propagation by doing root-divisions of my own perennials and those of friends, neighbors and family members. I also took cuttings and collected annual seeds whenever I could find likely candidates and by shopping close-outs for plants and seeds at variety (and even grocery) stores.

Whenever I noticed an attractive plant that I knew was easily propagated (like geraniums or succulents) in someone’s yard, I’d go up, knock on the door and ask the resident if I might be able to get a small cutting. (You’d be surprised at how accommodating most people were in this regard. In fact, 99% of the time, they seemed flattered someone liked their plants enough to want to grow them and insisted I take lots of cuttings!)

My friends and family also saved all of their empty nursery pots for me and I augmented these sources when I discovered the local dump also sold huge stacks of used nursery pots (plastic 1, 3, 5 and 10-gallon) for a couple of bucks at its recycle center.

The recycle centers at area dumps usually take in all kinds of useable items that they then sell to the public at extremely reasonable prices in order to cut down on the amount of trash going into the land-fill. I found a lot of other containers there, too, you might not necessarily think of as being flower pots that made wonderfully artistic and unusual planters.

For instance, I made a miniature water-plant dish-garden by planting small aquatic plants in an old wok, a cute herb-garden in an old, wooden bread box by drilling some holes in the bottom of it, propping the lid open and planting three or four different herbs inside and an old iron tea kettle made a great hanging planter for an ivy geranium after drilling some drainage holes in the bottom.

You name it and I used it as a planter: Old ice-cream makers, mixing bowls, ceramic crock-pot liners, hollow logs, ashtrays, shells, wastebaskets, pots and pans - anything that could hold soil for terrestrial plants or water for water plants. I also became very accomplished at drilling holes in different kinds of materials: Plastic, pottery, metal, wood, china and even glass. (The correct drill-bit for the job, lubrication and varying the speed of the drill to fit the substrate are the secrets!)

Getting good potting soil for almost no money was a challenge until I found

a landscape materials company nearby that sold pretty decent topsoil for a reasonable price if you bought it by the pick-up load. Then, I used my husband’s cement mixer to mix perlite (for drainage) and peat moss (to hold moisture in the soil) that I bought in large bags at a local nursery into the topsoil. Adding a very small amount of granular fertilizer during the soil mixing process also eliminated the need to fertilize later as a separate, special, time-consuming process.

Then I started to branch out (so to speak) by making little garden signs with appropriate gardening quotes and sayings on them out of scraps of wood that I got out of that dumpster at the door company. I was even able to find paint to paint them with for free from the recycle center at the local dump. (Because most places are trying to keep toxic substances out of the landfills, many dumps have an area where the public can drop off - and help themselves to - full and partial containers of paints, lacquers, glues, solvents, waxes, etc.)

I found local farmers and flea markets to be some of the best places to sell plants. Spaces or tables are usually quite reasonably priced and the sales demographic is a good match - many people who enjoy shopping for vegetables at local farmers markets also enjoy gardening! At many farmers markets, the management will even put off collecting the vendor space rent until an hour or so before the market ends in order to give sellers a chance to pay out of that day’s earnings.

Occasionally, I found myself lacking sufficient inventory or particular plants (e.g., poinsettias at Christmas, chrysanthemums during the fall, flowering annuals in the spring) for special sales events or before holidays that had the potential for me to make a large amount of sales.

A few wholesale growers in my area sell their leftover, partial flats of flowering plants, herbs, ornamentals, etc. for an extremely reasonable price to small nurseries; however, they don’t sell to the public and so usually require their buyers possess a state-issued resale number.

It’s also a good idea to obtain a state-issued “nursery stock license”. Having and displaying certificates and licenses issued to you by the county and/or state add to customers’ confidence in you as a professional, serious grower and business person.

A resale number doesn’t cost anything to obtain; however, a nursery stock license (at least in my state) has a minimum annual fee of over a hundred dollars (for nurseries one

acre or under) and that was a hefty amount for me to afford when I first started out.

Since a state nursery license is a government-issued document, a friend of mine suggested there was probably a way for low-income people to get one at a reduced price or even get the fee waived entirely and, sure enough - I had to ask specifically for a waiver form at the agriculture department but - after filling it out and sending it in, I was able to get a free state nursery stock license for those first couple of years!

To sell plants at farmers markets in the county in California where I live requires a county agriculture department issued producer’s certificate.

The local ag department maintains a high profile by regularly monitoring farmers markets and any vendor caught selling plants without a valid producer’s cert, plants not listed on their certificate or so-called invasive plants is subject to hefty penalties and can even be jailed in the case of selling invasives. Fortunately, the annual fee for a producer cert is pretty reasonable at around $50 and you can also get a cert for half that amount that’s good for six-months. I took advantage of the second option until my profits got to be such that I was able to afford to pay for a whole year at a time.

At first, the only vehicle I had to transport my plants to market in was my old Toyota Corolla. I would take the backseat entirely out and tightly pack plants into the back of the car on the shelves I used to display them, in the trunk and on the front passenger-side seat and floor. I was actually able to transport quite a few plants at a time that way. (Other vendors used to amuse themselves by watching me unload all of those plants out of my tiny car during set-up.)

After a couple of successful seasons selling plants, however, I was able to afford an old, used van in pretty good condition that I found in the want-ads of the local newspaper and it held a lot more plants than my old Corolla…

Soon thereafter, my landlord gave me an old boat trailer he didn’t want anymore and I designed and built a plywood step-pyramid shaped structure on top of it out of plywood and 1×1 wood scraps. It had slatted, staggered shelves which allowed me to keep the trailer full of sellable plants that could be watered on the trailer and allowed all of the plants to get full sun. This saved me a lot of time and effort in loading and unloading plants for market each week and had the added benefit of being ready to go at a moment’s

notice in case a great sales opportunity popped up that I hadn’t planned for in advance.

On market days, I’d pack a large patio umbrella and stand, a lawn chair, my garden signs (stuck into an old milk can), some small bills and change, note paper, some small pieces of poster board (for signs), indelible ink pens, self-adhesive price stickers, my licenses and certs, a few plastic grocery bags for customers to use and a small cooler with water and snacks into the van.

I also took along water in 5-gallon containers and a couple of inflatable kiddie pools (that I bought for a dollar or two a piece at a variety store’s after-summer sale) which I used to display aquatic plants. The added benefit to having all that water was that, if any of the other plants wilted, I had water right there to water them with.

Then, I covered the trailer with a large tarp held down by bungi cords, hitched the trailer up to the van and off I’d go to the farmers market to sell plants for a couple of hours

I didn’t make very much money at the beginning I discovered that it takes local-market buyers awhile to warm-up to sellers and their inventories. They like to talk with the seller, ask questions and peruse inventory a few times before they trust a vendor enough to buy from him/her.

In those first few weeks, I talked to a lot of people, gave away a ton of free gardening advice and didn’t make very much cash in return. In fact, during the first few weeks of that first season, I barely made the cost of my space rental. By the last few weeks of the first season I was making a little more money but, by the next season, the window shoppers I’d given gardening advice to the year before came back in droves! After that, I had it made - bringing in anywhere from a couple of hundred to a few hundred dollars every week!

I made a special effort to save any and all receipts relating to nursery expenses right from the beginning. During those first couple of years, of course, I didn’t make enough money to make it necessary to file taxes. However, the tax laws allow you to distribute your expenses over a several-year period later on if you do start to earn enough to be required to pay taxes on your earnings from self-employment. So it’s worth it to save all of those receipts - even over several years - just in case. Also remember that outlays for the business part of your home (office supplies and equipment related to the business and maybe even part of your rent or house payment) as well as license

and certification fees, mileage, etc. all qualify as being deductibles on your earnings which means that, when you start making a profit, you’ll have to pay less taxes.

Naturally, there are a few distinct drawbacks to running a one-person nursery out of your home:

1) Probably the biggest drawback is that you’re pretty much tied down to the ole’ homestead. Plants need to be watered, fertilized, potted and repotted, de-pested, moved from place to place - in or out of the greenhouse, in and out of sun and shade but, above all, plants need to be monitored constantly and carefully for any signs that might indicate declining health or special needs.

All of these activities require a knowledgeable human’s presence and attention and, until you can afford to hire someone to do them or you decide not to have a plant nursery anymore, that human is you.

2) Dividing and potting plants and mixing soil is dirty work. (probably something to do with all that soil). If you’re the type who is proud of their impeccable manicure, likes to show off their perfectly-wrapped nails or freaks out whenever they get anywhere near a creepy-crawly creature of any kind, this is not the home-run business for you. It is also very hot, sweaty work in the summer and extremely wet, cold work in the winter. It is strenuous outdoor work for the most part where you are very often forced to work in weather conditions that are the least-favorites of human beings. You have to be made of sturdy enough stuff to take it.

3) Occasionally, the weather takes a bad turn or some disease or pest comes along and wipes out your entire crop of one (or more) species of plants. This can happen in an amazingly short period of time before you can do anything to prevent it. This is an integral part of the very nature of farming. If you can’t weather the occasional, moderate set-back, raising plants probably isn’t the business for you.

It’s like my grandfather (a life-long farmer) used to say: Farmin’ t’ain’t easy. If it wuz, ev’ry farmer you ran across would be a millionaire - ‘n they ain’t.

4) You will need to be able to swing a hammer, use a saw, build and repair things like benches, greenhouses and other structures from time to time. If you can’t hit a nail straight or saw a straight line, this isn’t the business for you.

However, if you’re a homebody type who really likes plants, has a green-thumb, doesn’t have hay fever, doesn’t mind being outdoors a lot, has a strong physical constitution and a bit of creativity, you just might find that running a little plant nursery out of your home is a wonderful way to earn some extra cash

Posted by science on June 2nd, 2009 No Comments

Small business start-up guide

The pre-launch stage is crucial to the success of your small business. You’ll need to carefully consider a number of items during this time, starting with a personal evaluation and moving forward to the all-important business plan.

1. Self Evaluation

Before you invest your resources into a small business, make sure that you have the personality traits of a business owner.

Take time to candidly list your attributes. Things to consider include whether you are self-directed, ambitious, creative and smart. Do you have the endurance of a rock, the flexibility of a rubber band, the charm of an actor? How well do you manage time? How do you respond when under tremendous pressure? And, last but certainly not least: do you enjoy working? Not just an 8 to 5 job but long hours, weekend work, evening work, nonstop work?

2. Resource Evaluation

Once you’ve determined that you have what it takes personally to launch a business, move into the nitty gritty. What are your current resources? This list should include everything from cash on hand to liquid assets to credit worthiness to friends with deep pockets. If you have no assets, do you plan to remain employed elsewhere? Do you plan to get backing from a venture capitalist? Are you going to mortgage your home?

Experts agree that a small business owner needs capital to cover at least a full year of business expenses.

When reviewing your resources, keep in mind that you’ll need a proven track record in some aspect of your proposed business. In short, what are you bringing to the table that would entice an investor or a potential customer?

3. A Marketable Product or Service

This step will include the nature of your product or service, your nearest competitors and what the market can bear.

Marketers understand the adage: “Sell the sizzle, not the steak.” They may be pushing aspirin in a market with hundreds of aspirin products but when they promote their pill, they find something unique about about it and focus attention on that. You’ve got to determine what is special about your product or service because, more than likely, you already have a competitor. Find the “sizzle” for your business.

If you’re considering as retail store, look around. How many competitors are there within a five mile radius? Can the market handle yet one more? The same applies for services - if you’re hoping to get customers while competing against established businesses, then you’re either taking a unwise risk or have an extraordinary service.

4. Design a Business Plan

All the above steps will merge into a formal business plan, which is the crux of your start-up activity. Define your business, state your objectives and how you will put them in action. Set realistic time frames for accomplishing these goals. List those assets an expenses. Plan future activity. Describe your marketing plan. Consider sales and profits as well as expected losses.

Sample business plan templates are all over the Internet. Find one and customize it for your business.

5. Seek Assistance

The best plan to find assistance is through the givernment’s Small Business Administration (SBA) The agency is designed for small business owners and offers everything from information to loans. Find the local branch in your city and set up an appointment. Among the resources the SBA offers is a Small Business Set Up Kit, networking, explanation of the 2009 Recovery Act, basic business training and a host of other free tools and advice.

In conjunction with the SBA are local Small Business Development Centers, which offer workshops and counseling as part of their services to small business owners.

The most important aspects of starting up your small business are practical: evaluate realistically and plan realistically. Far too many dreamy eyed entrepreneurs have seen their passion and their savings disappear simply because of poor planning.

Posted by science on June 2nd, 2009 No Comments