Business Type

The key to successful financing is structuring loans right
By Daniel Kehrer


An estimated half of all small businesses depend on private investments from family and friends for startup or expansion. Shipping giant UPS was launched when 19-year-old entrepreneur Jim Casey borrowed $100 from a friend to start the company nearly 100 years ago in Seattle. And when teenager Fred DeLuca open a sandwich shop in 1965 with a $1,000 check from a family friend, Subway (now 25,000 restaurants) was born.
Friends and family are the single most important outside funding source for small business in America. But there are risks, and "F&F" money must be approached carefully.



Action StepsThe best contacts and resources to help you get it done
Put a financing facilitator to work

Small business loans from friends and family often go awry because they haven't been properly structured and administered. Sign up a service that will prepare documents, create repayment schedules, bill, collect payments and provide year-end tax statements.

I recommend: CircleLending has been a pioneer in private loan administration. The firm helps manage transactions such as small business loans between private parties — especially family and friends.

Offer equity in your business

If your business is a corporation or LLC, your funding source can become an equity investor, buying shares in your business.

I recommend: At Intuit's MyCorporation.com web site, you can incorporate a business or form an LLC online for as little as $149, plus state filing fees.

Put your plan in writing

Even with family and friends, you need to put a business plan and request for funding in writing. Make it as detailed, professional and realistic as you can. Aim for full disclosure of all potential risks.

I recommend: A terrific place to find help writing your plan is Bplans.com.

Arm yourself with finance facts

The better you understand the intricacies of financing, the more likely you are to succeed.

I recommend: "Financing Your Small Business: How to Borrow Money from People Your Know (2nd edition)", is a helpful booklet produced jointly by SCORE and CircleLending. Download free at www.circlelending.com.

Tips & Tactics
Helpful advice for making the most of this Guide
• Plan your approach in advance. Think about your ideal loan and how it would work, and have those details at hand.
• Be yourself when you approach people for money. Don't try to suddenly come off like a big corporate executive. That's likely to be a turnoff.
• Don't borrow more than your friend or relative can afford to lose. Let them name the final amount. You don't have to get it all from one person.
• Agree on terms and formalize the agreement in writing. If it's a loan, this should specify an interest rate, repayment schedule and whether the loan is secured or not.


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House hunting hints for home-based businesses
By Frances Sharpe

Finding a new house is no picnic — you've got to consider the basics, such as the number of bedrooms and bathrooms, the architectural style, the yard and, of course, the price. Then you've got to consider the appeal of the neighborhood, the quality of local schools and access to shopping and entertainment. Add the fact that your new abode also needs to house an office where you can run your business, and the chore becomes even more difficult.


To simplify the quest for an office-ready home, you need to know what to look for, including:

1. Zoning law compliance
2. Adequate space
3. Wiring needs
4. Internet access
5. Phone capabilities


Action Steps
The best contacts and resources to help you get it done

Check zoning laws

When searching for a home that's also suitable for operating your small business, check zoning laws to make sure it's legal to run a business in the location you are considering. Zoning restrictions regarding signage, on-street parking, business hours and hiring employees vary by city, county and state. If you're considering buying a condo or co-op, check with the homeowners' association about restrictions regarding home businesses.

I recommend: Visit MegaLaw for links to zoning law sites in your state, county or municipality. Ask zoning questions or find a zoning lawyer at Free Advice.

Determine office space needs

Determine how much space you need for your office and make sure your new home fits those needs. Finding a home with a separate guesthouse or studio with its own entrance that can be used as an office is ideal, especially if you'll be having clients visit.

I recommend: Download a handy evaluation worksheet from ColdwellBanker.com. Be sure to include your office needs on these forms and share them with your real estate agent.

Use the Internet to search

Take advantage of the Web in your search for a home that will double as your office. Most national real estate firms allow you to search for homes online using specific search criteria. Save time by taking online virtual home tours, which can quickly show you whether or not a home fits your business needs. Many new homes are now being built with home office needs in mind.

I recommend: Visit Prudential Real Estate, Coldwell Banker or Century 21 to search for homes online.

Get wired for success

Older homes are rarely equipped for the electrical needs of a small business. Unless you find a home that previously housed an office, you aren't likely to find one with enough electrical outlets for your needs. In most instances, you'll need to hire an electrician to install additional electrical outlets.

I recommend: Find a local electrician at ElectriciansNetworks.com or search your local YellowPages.com.

Check Internet access

Look for a home that can be wired for high-speed Internet access with either DSL or cable.

I recommend: Check with Verizon Business DSL, Speakeasy Business DSL or Comcast to determine if the home can get high-speed Internet access.

Assess phone capabilities

If you're going to be using a multi-line phone system, look for a home that's already set up for multiple phone lines. Or verify with the local phone company that it can be equipped for additional phone lines.

I recommend: Find out how much it will cost to add phone lines with a local phone company, such as BellSouth or Verizon.

Find an agent

Look for a real estate agent who has experience with home offices. If they've worked with home-based business owners in the past, they'll probably have a better idea of your needs.

I recommend: Find a real estate agent at RealEstateAgent.com or contact the local branch of a national real estate firm, such as RE/MAX.

Tips & Tactics
Helpful advice for making the most of this Guide

* Look for a home with ample free street parking. If clients or employees have to pay to park, have to park far away or have to drive around for a long time looking for a spot, they may be discouraged from doing business with you.
* Consider how easily accessible the home office wiring is. If you ever have a problem, you don't want to have to head for the basement or crawl space to find the circuit breaker. And if you ever need a technician who gets paid by the hour, you can cut costs if wiring is readily accessible.
* Don't forget about storage space. As a business owner, you're required to maintain financial records for years so make sure your new home has adequate room to stow important business records.
* Check out the noise level at the house during your normal working hours. Will the neighbor's noisy kids, barking dogs or loud stereos disrupt your business?
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The web has made information more available, but searching commercial property listings remains a challenge
By Jeff Ostrowski
You probably know that the Internet has made it easier to research homes for sale, but the tech revolution also has hit the more specialized world of commercial real estate listings. A growing number of sites with information on commercial property for lease or sale, including offices, warehouses and retail space. But brokers warn that it's difficult for an entrepreneur to find a comprehensive list of commercial property listings without becoming overwhelmed by the options. Here's where to look for your company's new home:

1. More and more sites make it very easy to search for commercial property for lease or sale.
2. Don't forget about old-fashioned print. Daily newspapers and weekly business publications, as well as the Wall Street Journal, continue to list commercial properties.
3. Consider hiring a commercial real estate broker. These professionals know the market and have access to subscription-only commercial property listings on CoStar.



Action Steps
The best contacts and resources to help you get it done

Check sites specializing in commercial property listings

LoopNet site offers photos, prices, square footage and even capitalization rates for a variety of property types throughout the country. Bizspace, run by the American City Business Journals chain, includes information on property in 16 markets throughout the country. Black's Guide started as a print guide to commercial property listings and now offers listings online.

I recommend: On LoopNet, you'll be asked to register, and you can choose between a free basic service and more complete access for a fee. Bizspace offers a guide to brokers in addition to listings. Black's Guide requires free registration.

Hire a commercial real estate broker

If you need nothing more than a simple warehouse bay, you probably can handle the search yourself. If your requirements are more complicated, use a commercial real estate broker.

I recommend: Ask other entrepreneurs for names of good brokers. Your broker will have access to CoStar, which is considered the gold standard of commercial property listings services.

Surf broker sites

Major commercial brokerages make it easy to search their listings, although you'll see only the properties they're trying to sell.

I recommend: Big players include CB Richard Ellis, Colliers International, Cushman & Wakefield, Grubb & Ellis, Jones Lang LaSalle, Marcus & Millichap and NAI Global. All post their property listings online.

Look off the beaten path

Auction sites, auctioneers and even Craigslist offer properties for sale.

I recommend: Check eBay's commercial listings and surf Craigslist for your town. Also try old-line auctioneers such as Sheldon Good & Co.

Avoid infoglut with specialized searching

Searching for general terms like "real estate" or even "commercial real estate" or "commercial property listings" can return more results than you know what to do with.

I recommend: Focus on exactly what you're looking for, whether it's retail property listings or real estate brokerage firms or commercial real estate loans.

Tips & Tactics
Helpful advice for making the most of this Guide

* If you hire a broker, choose one who's experienced with your property type and your geographic area.
* Expect some overlap and some gaps as you search listings online.
* Be flexible about property types. If you're a heavy manufacturer, your choices are limited. But if you're running a call center, you could occupy so-called office/warehouse space, which often is categorized as industrial space, or even an empty storefront.

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Take advantage of selling tools to rev up your online auction revenues
By Matt Alderton

Selling stuff on eBay is easy enough. So is making money at it. Selling more stuff, however, and making more money requires true business savvy. Anyone can be an eBay seller, after all, but it takes a true entrepreneur to run a truly successful eBay business. To pump up your sales on eBay, you need to:

1. Use online and offline marketing techniques.
2. Source products for less.
3. Streamline order processing and shipping.
4. Offer more items for sale.



Action Steps
The best contacts and resources to help you get it done

Shop savvier
Perhaps the easiest way to increase your profit margin on eBay is by paying less in the first place for the merchandise you sell there.

I recommend: Save money by purchasing products wholesale from companies such as GeteStore and Doba which sell goods to merchants at low prices and will even ship them directly to your customers. Or check out the wholesale lots available on eBay.

Create an eBay Store

In a survey, 75 percent of eBay sellers said that opening an eBay Store increased sales. Opening an eBay Store allows you to list items for longer durations with lower fees and provides access to marketing and merchandising tools that can increase sales.

I recommend: Follow three easy steps to open your eBay Store.

Improve your listings

Listings don't need to be flashy, but they do need to be informative and, above all, accurate. Provide precise measurements, colors and conditions in your product listings and remember that honesty is always the best policy. Paramount to successful eBay listings is good photography.

I recommend: Beyond the Basics, from eBay University Online, is a CD-ROM that helps you grow your eBay business and includes tips on creating compelling listings. Invest in a high-quality digital camera from Best Buy or Circuit City to give your auctions the boost they need.

Add eBay Express to the mix

Gain access to a new market with almost no effort on your part with eBay Express. This new service is geared to streamlining the buying process for busy shoppers and can put your products in front of these consumers.

I recommend: Find out how to get your listings to appear on the site with the eBay Express checklist for sellers.

Sell more products and cross-promote

It sounds simple, but one of the best ways to make more money is to sell more stuff. Even if you're a one-person shop operating from home, you can ramp up your capabilities. And when customers show interest in one of your products, suggest others that might also appeal to them.

I recommend: Turbo Lister is a free listing tool you can download to help you upload thousands of items in bulk. Follow these simple steps to cross-promote items in your eBay Store.

Reach out to customers

Many of your buyers miss the ends of your auctions because they're away from their computers. Convert these lost sales into cold cash with services that bring customers back to your pages. Get the word out about your business with online and offline marketing techniques, such as email newsletters, banner ads, promotional flyers and branded letterhead email.

I recommend: Use UnWired Buyer, which notifies buyers of their auction status via cell phone. Get help with an email newsletter from Constant Contact, which offers templates, delivery statistics and subscription management. Send everyday email using branded letterhead and custom business card signatures

Streamline the buying process

When it's easy to order and pay for merchandise, your customers will buy more of it.

I recommend: Make collecting payments easier with PayPal invoicing.

Ship on time and on budget

Include accurate shipping information in your listings. Deliver on your shipping promises and charge only what it will actually cost you to ship the item.

I recommend: Take advantage of eBay's All-in-One Seller Solutions which prints shipping labels and invoices in bulk and helps track and manage shipments. Automatically send emails and feedback with eBay's Selling Manager Pro. Always include eBay's free Shipping Calculator in your listings to help both you and your customers calculate accurate shipping costs.

Become a PowerSeller

With a PowerSeller icon on your listings, shoppers will instantly recognize you as one of eBay's top sellers. This increases your credibility and makes customers more inclined to buy from you. As a PowerSeller, you're also privy to advanced selling tips from the auction site.

I recommend: Discover what you need to do to become a PowerSeller.

Tips & Tactics
Helpful advice for making the most of this Guide

* The best eBay listings begin with a winning title. Experiment with different subject lines to find out what strategy ropes in the most bidders; the best titles, you'll find, are both informative and creative.
* Timing is key in eBay sales. Examine the auction start and end times for top selling items in your category to garner information about when to best attract your target customers.
* Browse other auctions and find out what merchandise in your category is selling for. Pay special attention to competitors' Buy It Now prices; find out what their maximum Buy It Now price has been and set yours just below that.

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