By Kevin M

My friend Jay and I were talking about jobs this past weekend and he pointed out something that I hadn’t thought about: There are no astronauts any more! That may not mean too much if you’re under 30, but when he and I were growing up being an astronaut was the ultimate “hero career”. It was, as the kids say today, “the shit” among careers.

Back then it seemed that all of humanity would eventually be going to space—to find resources, to conquer new worlds or at least to alleviate overpopulation here on earth—and astronauts would lead us there. High minded and exciting, yes, except that it never happened!

If a career as cutting edge as astronauts is no longer secure, what can we say about the far more ordinary fields most of us regular folks work in?

You’ve heard it and read it before, and perhaps you’ve even been a casualty of one of the biggest phenomena of our time–the end of job security.

We have to do something about that, but what? Individually, there’s little any of us can do to create job security, but we can gravitate toward it’s close cousin, income security. If we have income security we might not even notice or care that we no longer have job security.

What is job security? What is income security?

Let’s face it, in order to function everyday and to have some sort of certainty about the future we need some measure of security when it comes to earning a living. For at least the past couple of generations that meant having a stable job, but the times they are a-changin’. Fast.

Job security implies that your job is safe for the foreseeable future and hopefully clean through to retirement. Your job IS your income—as well as your source of health insurance, retirement and other benefits, and even your self esteem and your standing in the community. All is well, and you even have income security, as long as your job is secure.

Most people seek job security because it’s a simpler way to earn a living—your employer has your job and your income “covered” freeing you to go about living your life. The downside is when your job is suddenly in jeopardy, because the entire financial component of your life is also at risk. It’s a classic case of having all of your eggs in one basket.

Income security means your income never comes from a single source. If one source fails, you have others to tap, and you can eventually replace the failed sources with new ones. You’re not overly concerned with any one income source, but with creating and maintaining a portfolio of income streams.

In the economic and employment conditions of our time, I think income security is the logical security to pursue.

Creating income security

Its one thing to know the difference between income security and job security, but ultimately it all comes down to making it happen and that’s not as easy. There are various ways you can begin creating income security and that can include just about any revenue sources you can think of.

Self-employment. This is the obvious first choice for providing an additional (or alternative) income source beyond a job. By its very nature, being self-employed is all about creating new revenue streams. If your business income is derived from several or many clients or customers (which it should), you’ll actually have a portfolio of income streams, and that’s the best income security you can have. Even if your income drops, you can still have at least some income from your business, as opposed to a job where your entire income will cease the day you’re let go.

Fortunately, the internet has made self-employment easier than ever and because it’s here and now and growing, that’s probably the first place you should look. It’s where I’ve decided to camp out and it’s working for me—and I’m not exceptional in any way, believe me.

Investment income. In an era of record low interest rates, this is more about turning small amounts of money into larger ones. There are various ways to do this and you should start investigating them. This is not about plunging into the stock market per se, but about developing the ability to identify under-priced securities that have the potential to grow well beyond conventional rates of return—then having the willingness to wait it out. It has nothing to do with get-rich-quick. It’s a skill, just like business- or job-skills are, and once you master it you’ll have created a whole new way to earn a living.

Forming business partnerships or investing in small businesses. One of the things you can do if you have a business is to partner with other businesses in ways that will enable both entities to grow. There are as many ways to do this as there are small businesses and people who own them. It can also be the middle ground between starting your own business and investing. And you can do this with skills as well as with capital.

Let’s say you have some capital but you’re spooked by the stock market; as an alternative you can invest some money in an existing small business (or several) as a way taking partial ownership of a growing business. Small businesses always need capital, but never more than now when getting a bank loan is harder than ever. Conversely, if you have certain skills needed by a small business, you may be able to join that business as an owner/partner. Marrying capital with management and skills is a time honored way for all parties to make money, and very the foundation of free enterprise.

Lowering your cost of living. Not many people think of this as an income source but it really is. When you lower your living expenses, you’re lowering the amount of income you need to earn—that’s the equivalent of a fresh income source, but it gets even better. The less income you need to live on, the less you need to earn, and the less you’ll need to pay in income taxes. That’s a double benefit. The biggest advantage here will come from lowering your biggest expenses, the ones that represent the biggest drain on your income. Less need for income means more freedom to pursue other income sources.

Jobs. I gotcha on this one, didn’t I? If there’s no job security and we need to pursue income security instead, why discuss jobs? Because jobs are, first and foremost, a source of income! The topic of income security isn’t a self-employment is good/having a job is bad debate—any legal income source is a valid one. That includes jobs. Income from a job is good, it’s the complete reliance on it that creates the problems. If you can keep a job while developing additional revenue streams, you’ll achieve income security in addition to having a job. Your job is then part of the income mix, but not the sole source.

One more point about jobs: if you intend to keep one in an era where there is no job security, it’s important that you emphasize skills over the job itself. Transferability is the key, and only a strong set of skills can give you that.

 
You’re creating income security in your life when you start receiving income from sources other than your employer. That point is important in itself—you shouldn’t quit your job to create income security—you can and should do it while you have a job. In fact it will be easier to do it this way, and your job itself can be part of the security you’re working to build.

At a time where there isn’t much in the way of job security, what steps are you taking to build your income security? Are there any ways I didn’t mention?

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By Kevin M

“Better to light a candle than to curse the darkness.”—Motto of The Christophers

I mostly make my living on the internet these days but I have a confession. I never worked much with computers until three years ago, least of which the internet. Sure, in the preceding 25 years that I worked in mortgages and accounting I used computer applications, lots of them, but most of us understand the not so subtle difference between that and working in an environment in which your primary means of support is coming directly from working on/in computers or somewhere out in cyberspace.

My career as a paper pusher ended unceremoniously at the end of 2008, a time when recycled paper pushers weren’t in very big demand. Where to go, what to do? Damn computers–#%&*@$g internet—they’ll be the end of the world, you watch!

That last line is a fiction (OK, it was a deeply suppressed thought), but I chose to intentionally avoid dwelling on it. Every one who’s ever seen their career crash and burn can point to one or more big picture factors that directly or indirectly greased the wheels of their departure. We can either poison ourselves with bitterness, or find some way to benefit from prevailing changes (hence the Christopher’s quote above). Which route we take will mostly determine our future direction.

Job VS Opportunity

Here’s the thing about computers and the internet—yes, they have been responsible for the permanent elimination of millions of jobs around the world (and almost certainly more to come), but they’ve also created a sea change of opportunity. We should work to take advantage of that opportunity.

Now notice I said “opportunity”, rather than jobs—computers and the internet have created many, many jobs, most of them high paying. But they’ve destroyed more jobs than they’ve created on balance. And let’s face it, unless you’re a highly trained “techie”, getting a high paying job in the computer field is tough.

The opportunities I’m describing won’t be found in a job, but in having your own business.

Scared? Don’t be. I think it’s the wave of the future. Most people who have held jobs all their lives tend to think “job” when it comes to earning a living, but the onslaught of computers and the internet have changed that arrangement. I think that computers and the internet are the 21st Century equivalent of the return to the family farm and shop that provided income for the majority of humanity since the beginning of civilization.

What are some of the ways that computers and the internet are making self-employment more doable?

The entire world is our market

Because of the internet we’re no longer limited to the local community as a business base. Business can be developed throughout the world. The obvious advantage here is a much bigger market, but probably more significant is the niche factor. There are more niches globally than locally, and that heightens the chance of finding business success.

For example, let’s say you’re an art dealer; you can only drum up so much business in your immediate local community. But by selling on the web, you can reach hundreds of larger markets around the world, and many of them may buy proportionately more art than people on your home turf do. Even as a blogger, a significant amount of my income is derived from non-US sources. That’s the nature of the web—a market without borders.

Free and cheap marketing

Every business needs to market, otherwise there is no business. But marketing can be the mortal enemy of a small business, especially a start up. Advertising in the traditional media (TV, radio, mailers and print) is expensive. The big players can and do play this game, and play it well.

Marketing on the internet is far cheaper (and often free) than it is in the traditional media. You can place ads on large websites for less than the cost of advertising in a local newspaper, or you can market for free on the social media, like Facebook and Twitter. Just having and growing your website or blog is a form of advertising.

Networking gets larger—and more important

Networking opportunities are wide open–people are helping people on the web. Most web businesses are small, often one-man or woman shops, so you can market your products through another online business while they market their product through yours. You can also swap business strategies and gain access to valuable information. Networking is the life’s blood of the internet—which is why it’s called the “web”.

More product lines

Product lines are available to us that once were known only to “insiders”. Everything is being sold on the web and that presents some opportunities. Many companies will offer affiliate sales arrangements, in which you get paid a commission to sell their products. And since it’s what they do, the process of signing up and is usually pretty simple. It goes without saying that any sort of import/export business will be easier to build, since it’s all done online.

Online sales are on the rise

Online sales of nearly every product or service you can imagine are rising steadily. What this means is that the resistance to buying online is much lower than it was just a few years ago. More people being more willing to transact business online is a win for the small business. Where you once needed an attractive storefront or office suite to get people to do business with you, now all you need is a good website.

Free, online training

Information on any business you can think of is no farther away than a Google search (YouTube is another excellent source). Most businesses are “seat-of-the-pants” affairs—you learn by trial and error. If you’re tooling along in your business and you hit on a snag, you can usually find the answer somewhere on the web. It’s been said that because of the internet, the average person today has access to more information than kings and business tycoons had 50 or 100 years ago. Use that to your advantage.

Inexpensive staffing

Next to marketing, staffing is usually the most expensive outlay for a small business, but the web can even help you with that. You can find inexpensive outsourcing help with virtual assistants (VAs)—no need to have formal employees. VAs can perform everything from simple administrative tasks to complicated computer applications, and they usually cost no more than a few dollars an hour. There are talented people in less developed countries who are willing to take on some of your work for not a lot of money. That means no W2s, no employee benefits and no employee lawsuits. There out there on the web, waiting for work.

Building a portfolio of businesses

If you can start one business on the web, you can add a second, a third, or as many as you want. You can enter one business and move seamlessly to another—everything just works faster on the web. Web entrepreneurs are a growing phenomenon—once you overcome your apprehension about the web, the sky is truly the limit. This adds an income diversification that a traditional job can never provide. I’d take that over employee benefits and a loose promise of job security any day!

Servicing the online “establishment”

As more businesses develop on the web, so do the opportunities to provide support services for them. If you have computer-, social media-, marketing-, writing- or administrative-skills, there are internet businesses and blogs who could use your services. For example, blogs often use outside services to write articles, manage content, social media marketing and technical support. Any such niche could be the beginning of a new online career if you have such skills.

Start small, grow large

Here’s one of the best parts of working on the web: you can start as a side business until you grow into full-time. That means you can plunge into an internet business without having to quit your job, and you can continue doing so until you’re ready to take it up to full time. This lowers the risk of starting an internet business substantially. This is possible in large part because internet businesses are talent driven, not capital driven as so many bricks and mortar ventures are. You don’t need inventory, employees or even office space, and as discussed above, marketing is incredibly cheap.

All of these advantages make a strong case for the unemployed, under-employed, disenfranchised (that was me three years ago) or even the currently employed to consider some sort of internet-related income generating venture. And because doing it doesn’t require much money, you can try, fail and try again all you like—until you get it right.

This is after all, a new age—the Internet Age.

Have you thought about starting some sort of internet based business?

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By Kevin M

Quick—you want to start a new business—what’s your biggest fear?

If you said “failure” you’re close, but you’re confusing cause and effect. It’s the inability to make money—also known as the loss of a steady paycheck— that would be the cause of the failure that’s at the root of your deepest fears. Failure will merely be the result—or the effect—of the inability to make money.

But there’s a way to reduce this fear, by breaking the income process down into smaller steps. The point of breaking it down is so that we can approach the income hurdle that all small businesses face into a series of manageable blocks. What we want to do is to convert the self-employed income hurdle from an obstacle to a transition process.

You want to try to engineer the transition in four steps:

Step 1—Start with a Full-time job/Part-time business arrangement

It’s much easier to start and run a business when you aren’t relying on it to pay your bills. Having a full-time paycheck (and benefits never hurt) can take the risk and income insecurity out of starting a business. Most business ventures take months or even a couple of years to make a profit, so getting started while you’re on someone else’s payroll will take the uncertainty out of it as well as buy you time for making mistakes (you’ll need this!).

Once you’re seeing a steady cash flow—even if it’s small—it’s time to explore other options.

Step 2—Business income grows—reduce job to less than full time

When the business starts making money on a steady basis it’s time to start clearing your schedule a bit. If you’re working in a full time, permanent job, you’ll probably find that it will be very difficult to grow your business with very part time hours. Most businesses require more time in order to grow, but if you’re not in a position to quit your job and go full-time in your business, you’ll have to get creative.

Try some of these to help you carve out more time for your business:

• Approach your employer about working from home. It isn’t a perfect solution, but it will eliminate the time you spend commuting, and may enable you to be available to handle at least light functions with your business during regular working hours.
• Approach your employer about cutting your hours back. Given the weak state of the economy, some employers might welcome the opportunity to cut payroll expenses. A reduction in hours from 40 to 30, or even 35, could benefit both parties.
• If your employer won’t budge on the hours, try to find a position with a competitor who might entertain either arrangement. Economic reality if forcing many employers to do things they wouldn’t have considered a few years ago.
• Move into contract work. Many contract situations will provide greater flexibility than a full time, permanent job, primarily because you’re a fringe worker and not a regular. Because of the absence of both permanence and benefits, the pay is often better as well.

I chose the contract route at this stage of the game and I had several. I had one that was on an “as needed basis”, and it paid well enough that I didn’t need to do it on a steady basis. Another was temporary—it lasted three months, but again the pay level floated me for an equal amount of time after it was over. Then I also have a seasonal contract gig that I still keep. It’s also part-time so it blends well with my business schedule.

There are all kinds of contract arrangements out there, so try to find one that works best with your particular situation. You’ll need to be flexible and fully prepared to step outside your comfort zone with some, but it will be well worth it.

Step 3—Business income reaches the level of a “living wage”–almost

This is probably the first level at which you feel truly “self-employed”, but it can also be the most stressful. Your business is starting to make money, but you’re hardly home free. At this point, you’re probably making just enough money to survive, but not much extra and, just as important, you haven’t yet withstood the test of time. There will be a temptation to quit your regular job and go full tilt at the business, but you feel some hesitation—that’s probably good.

This is the make or break point, but you might still want to have at least a bit of a parachute, just in case. Or at least, just some extra money!

A part-time job would probably be ideal. Not only can you make the needed extra income, but because it’s only part time, you can phase it out as you need to simply by cutting back you hours.

Still another way to navigate this late stage is by doing contract work for your new competitors—as in people engaged in the same business you are. Nearly all businesses have functions that the owner doesn’t have time to handle, but they may also be so specific that hiring someone off the street isn’t workable. As a member of the same industry, you have the skills that others in the same field need.

So you’re not working for direct competitors, you can offer to do contract work for businesses who are in the same business, but in different niches. Sometimes you can do this by contracting for competitors who are in different geographic locations. Think of a newly self-employed attorney who may do legal research work for a larger firm to help with cash flow early on. Find something you can do in your own business along the same lines.

Step 4—You’re “there”!

You’re finally earning enough money from self-employment to support yourself or your family, and you’re feeling confident in your ability to keep it going. Since you no longer need a job—full-time, part-time, contract or otherwise—you can now devote 100% of your working hours to your business. This is the time to grow it, streamline it, make it better and make it more profitable.

This is also the time to kick back and enjoy life right? Not when you’re self-employed!

Not only do you need to constantly grow your business and stay abreast of new developments, but you also need to shore up your finances. Having your own business isn’t like a steady paycheck—you typically don’t have a stable income. Self-employment has an unstoppable feature of roller coaster income.

That means you’ll need to save money for the down times! A person on a salary never has to worry about his or her income level, but one of the challenges of the self-employed is to create something close to a steady cash flow. The best way is saving money during the good times to be ready for the lean ones. If you’ve never been a saver up until this point, you’ll need to become one.

One of the best ways to do this is to save money while you’re doing double duty—building your business and working outside jobs or contract arrangements. And once you cross over into full time self-employment, you’ll need to continue with the saving habits you developed while you were holding multiple occupations.

Is it worth it?

In a word—YES! It reads like a long process, but the purpose is to remove the uncertainty of a steady income while you’re building your business. It’s a tough economy out there, and you’ll have your hands full just building your business. Keeping a steady paycheck while you’re building it will not only remove the survival dilemma, but it will also give you the financial strength you’ll need to get through the upstart period successfully. And dealing from strength is ALWAYS the way to go!

Are you starting a business, or have you done it recently? What did you do to keep money coming along the way?

Finding the top dividend stocks isn’t easy. Dividend Stocks Online sorts dividend stocks by yield, growth and performance.

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”Retiring on Business Income

By Jessica Wagner

Saving, whether it’s for retirement purposes or otherwise, is tough enough without having that added difficulty of being self-employed. Many people have found the benefits of being their own boss and making their own hours but putting money away isn’t as easy when you don’t have a company with good retirement plans.

It’s important to know that you can do this even if you are self-employed. Small business owners and online entrepreneurs alike have found ways to build up their retirement and savings funds. There are many ways to do this and there isn’t just one savings plan that you can invest in and IRAs have long been one of the most popular avenues for retirement savings.

Tax deferred retirement plans

An IRA is an account held by a custodial institution such as a bank or brokerage firm. Generally, IRA’s are designed for middle-income investors. There are no income restrictions for most middle class taxpayers and an IRA is available to everyone.

With a traditional IRA, you can contribute up to $5,000 per year ($6,000 if you’re over age 50) and the tax deduction of the investment is determined by your Adjusted Gross Income (AGI). Depending on your filing status (single, joint, etc.) your contributions can range from fully deductible to completely non-deductible. If you withdraw before 59 ½ then you will be subject to a 10 percent penalty fee. This is subject to exceptions so consult the IRS web site to see if this applies to you.

Traditionally, 401(k)’s are available to those who work for a company that has a plan set in place for their employees, but there are also Self-Employment 401(k)’s available. These plans allow self-employed individuals or business owners to contribute to this plan while receiving tax breaks for the money they put away.

This plan generally allows the participant to contribute up to $16,500 per year, which not only represents a large contribution to retirement savings, but also a substantial tax benefit. Contributions to both and IRA and a 401k are deductible not only for federal income tax, but also for state income taxes. (Neither however results in a deduction for FICA taxes however.)

Creating income streams to fund your savings plans

If you do have your own business and you don’t have the available income to invest larger sums, you might want to consider making extra cash through different opportunities. And some of the best income earning opportunities can be found online so you don’t even need to leave your home or your place of business to make them happen.

Some of these options in fact can prove to be quite lucrative and range anywhere from freelance writing to taking market research surveys. Such opportunities can provide the steady additional cash flow needed to fund savings, and do it in less time than you might think.

Be sure that any income earned from side ventures will in fact be targeted for savings, and not blended with your regular budget. If the extra money is put into retirement savings, there will be little or no income tax on it, which should make your portfolio grow even faster.

Other savings options

You can also choose to set up a savings account or even certificates of deposit (CDs). In this way you can either save money until you’re ready to commit it to long term retirement plans, or build it up separately as a savings source in addition to your retirement investments. It’s always best to have some money in retirement plans and some outside since you never know what can happen between now and the time you retire.

If done wisely, you can start saving for your later years with very little effort. Set aside the extra cash you make and place it directly in various investment alternatives. It doesn’t have to be a savings account or CD. You can choose to invest in the stock market but this option comes with some risk in addition to a return that can be much greater than low interest accounts.

There are many savings choices available for those who are self-employed and these are just a few options. While searching for additional income and investment opportunities—on the internet or elsewhere—be careful of any offers promising huge returns for a nominal investment. There are many scams out there so make sure that any savings plan you invest in and any business opportunity you take on is legitimate.

If you’re self-employed, what are you doing to fund your savings and retirement plans?

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7 Reasons to be Self-Employed

Kevin M

There’s probably never been a better time to have your own business. I know that sounds downright loony to some, but it’s the reality of our time. On the plus side, the internet has opened up opportunities for small business ventures because it provides incredible leverage and it can make the little guy look like a big guy. On the negative side, employment has never been less certain or less satisfying, at least not in the past several decades.

Not convinced? Consider the following reasons—you can probably come up with a few more.

A sense of control

When you’re on someone else’s payroll, you’re also beholden to them. Your employer can change your work assignments, your seating assignment, your title, your pay, or even eliminate your job. In any of these instances, you may have little or no say in the decision making process—especially if you’re about to be fired or laid off.

Being self-employed gives you a strong measure of control over all of that. Many people are willing to make less money working for themselves precisely because it provides a greater sense of control over their careers, and by extension, their lives.

Unlike a job, self-employment isn’t “either/or”

Jobs are very much either/or arrangements; either you have a job and all is well, or you have no job and desperation is a constant traveling companion. In most instances, self-employment doesn’t put you in that position, especially if you have income streams coming from different sources.

In the worst of times you’ll probably have an income, even if a reduced one. What’s more, self-employment can give you the flexibility to pursue other income sources as needed. With jobs, you often don’t have the time, and some jobs even restrict your ability to earn money apart from your job.

The self-employed mindset

Back when I was in the mortgage business, an attorney I did a lot of business with made an astute comment over lunch one day. We were complaining about how clients often asked us to perform extra services without additional compensation, and he said “People who are in salaried jobs don’t understand; they get paid no matter what. We only eat what we can kill.”

If you’re a salaried person that comment might sound harsh, but if you are or ever have been self-employed you know exactly what he meant. The last sentence is an obvious reference to predatory animals and while graphically extreme, it serves to highlight the vastly different mindsets between people on salaries and those who are either self-employed or on commission. When you’re self-employed, there’s nothing “automatic” about your income—you have to earn it everyday.

On the surface, that sounds like an obstacle and I suppose it is. But once you grasp the concept that your paycheck is somewhere “out there”—in the community, on the web, on the phone or where ever the client base happens to be—and you learn that getting it is actually doable, then the whole process becomes liberating!

Once you learn how to make this happen, and that it can be repeated, you’ve crossed the line into self-employment. You begin to realize that anything is possible and you see opportunity all around you. There’s no security—but there are no limits either. That’s the self-employed mindset; you’re no longer looking for a job—you’re seeking opportunities. That’s a mindset that can be learned only by doing it, and once you have, it changes everything.

Retirement income

A lot of people fret over having enough money to retire comfortably, but here’s the reality for most people: you’ll never have enough money, so get over it! The rising cost of living will just about guarantee that the vast majority of people—outside the richest 5-10% of the population—will ever be able to enjoy a full retirement with no financial worries.

The best remedy to that problem is to have a business of your own, one you can work at for as long as you live, with no threat of being “put out to pasture”—as is the case with jobs. If it’s your business, you won’t ever need to retire from it and it can provide for you for many years past traditional retirement age.

Potential for unlimited income

Ever wonder why you reach an income ceiling on a job? It’s not your imagination—most jobs are “static” (I read that in a how-to-get-a-job book by an HR guy). An employer—any employer—will only pay so much for a given job, even if you’re doing the best work possible. Worse, once you reach the top earnings threshold, you’re trapped in the job because a move to another employer may mean a decrease in pay.

When you’re self-employed, you can earn as much as your time, talent, and effort will allow. In theory at least, there is no limit as long as you continue to grow and expand your business and your abilities.

You don’t have to quit your day job

One of the great aspects about starting your own business is that you don’t need to quit your job to do it—as we discussed above, self-employment isn’t either/or, and often involves the pursuit of multiple income streams.

You can start and build your business as a side venture until you’re ready to go full time. Maybe you never go full time, but you’ll have it as a second income and as a place to do the things you never could on your full time job. Sometimes having a side business makes your full time job more tolerable because it gives you what your job can’t.

One thing to keep in mind though; when filing taxes each year, working with a single employer and W2 forms, you can use a simple free IRS efile and do your own taxes online. Being self employed often opens up the possibility for significant deductions, and with multiple revenue streams, it may be in your best interest to consult a tax professional if you don’t feel comfortable doing it on your own.

Advance preparation for a job loss

This reason almost makes a necessity of being self-employed. This isn’t your grand-father’s economy—it isn’t even your father’s economy—the rules have changed and are still evolving. The past ten years have been very unstable and the future doesn’t look any better if “stable” is your definition of normal times.

Every one of us needs to have a plan (or better yet, plans) for a job that won’t be there in the future. Just because you kept your job through the last recession doesn’t mean you’ll have it until you retire. No job is safe any more, and the worst part is that if you do lose your job it will probably come at a time when thousands of people in the same line of work are losing theirs. That means there will be long lines of candidates applying for any job available.

In your own business, you can (and should) develop multiple income streams that will provide you with at least some income, plus the ability to find new ones. You can even take a part time job to help in a pinch.

There are businesses and industries that grow even in recessions. I’m doing freelance blog writing, and that business has actually grown substantially during the recession. There are opportunities for growth all around and having your own business can help you find them. If you’re doing it right—meaning you’re always searching out opportunity rather than a job—you have a good chance of surviving and even thriving, what ever happens in the economy.

If you’d like to start a business of your own, but don’t know which to go into, check out my post, The Freelance Blog Writer Side Hustle. Blog writing is a chance to start a business small and to grow it–risk free. Even if you’ve never written professionally in the past, this post can get you started.

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The Perfect Side Hustle: Freelance Blog Writer

By Kevin M

Even in the face of an apparent economic recovery, many millions of people are stagnating in their jobs, unable to get a promotion or to move to a more promising position with a competing company. Many more are still unemployed or even under-employed. That may be the reality of our time, but should we sit still and wait for better times? Is that even a strategy?

Cutting living expenses is one way to deal with a comatose employment situation, but I’ve argued in the past that frugality has its limits. When all is said and done, you can only cut your expenses so much before finding new income sources becomes an absolute necessity.

If you aren’t content to continue to just muddle through, and want to make things happen in your life, increasing the number of income streams will be the most constructive way forward. And starting a side business is the single best way to do this.

How can starting a side business build a better future?

Moving forward in an uncertain job market

Job security is a thing of the past. We could write books about how that’s playing out but it’s completely unnecessary. The more important issue is how we deal with that reality?

If jobs are uncertain, the best thing we can do is to prepare ourselves for self-employment. Since most people have never been self-employed, the lowest risk way to do this is to begin a business as a side venture while you’re still employed by your company. You’ll have the cash flow from your job, and that will give you as much time as you need to get your business up and make it profitable.

If you haven’t been promoted in a long time, and there’s little prospect of getting a better job elsewhere, it’s time to get started with a side business now. In time, your business can grow into a full time venture. And even if it doesn’t, and it merely functions as a part time business, it can either supplement your income or be one source among several income streams in the event you lose your primary job entirely.

Coping with the rising cost of living

Despite official declarations of an inflation rate sitting reliably within the 1-4% range, the cost of goods and services that we need—food, energy, utilities, healthcare and education have soared. If you aren’t being promoted, and the raises you get are only of the token variety, you’ll have to increase your income outside your job. A side business is a logical way to do this.

Retirement planning

Will Social Security be there when our turn to retire comes around? I think so, but it will almost certainly be at a level well below what today’s retirees are enjoying. Maybe it will be pushed out to age 70, or maybe it will be means-tested—we can’t know. And as pretty as self-directed retirement plan projections are, none can adequately account for the effects of one or more stock market crashes, or of a prolonged period of unemployment.

A successful side business can provide a workable Plan B against these possibilities. It can be a much needed income stream to supplement a reduced Social Security check and a less than expected return on a 401k. This is real life—even in retirement we’ll need options.

Building up savings and investments

It’s tough enough stretching a paycheck to cover necessary living expenses and—hopefully—a little bit for extras. But savings and investing can be lost in the course of just surviving! There always seems to be yet another bill to pay, another unexpected expense soaking up every extra dollar.

Often, the only way to develop a serious savings and investment plan is to create another income stream to fund it. A side business can provide the source not only for building savings, but also to pay down and pay off debt, and to increase investments for retirement.

Bringing out your “inner entrepreneur”

Do you ever dare to ask yourself ”what do I truly want to do with my life?” It can be a lot of fun, but it often gets short-circuited on the but-I-have-bills-to-pay issue. And yet despite this cold dose of reality, most of us are fascinated by the possibilities. Deep inside, we all sense that we could be more than we are–if only…

Why is it important to be an entrepreneur? If we can’t rely on jobs to provide for our futures, then we need to rely on ourselves! That almost certainly means some form of self-employment. But beyond the question of earning a living, self-actualization is a very real human need. We all want to be the captains of our own ships “some day”, to create our own unique paintings of our lives.

If you don’t feel that that’s happening through your main occupation, a side business gives you another shot. Who do you want to be in your life and your occupation? Maybe the answer to that question is closer than you think. A side business may provide that answer—and a whole bunch of other good things along the way.

If you think that building a side business may be the right path for you, but you don’t know what kind of business to go into, check out my post, The Freelance Blog Writer Side Hustle. Blog writing is one of the most promising side ventures you can enter because it’s growing rapidly and has excellent potential to lead to still more opportunities. Even if you’ve never written professionally in the past, this post can help you get started.

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The Perfect Side Hustle: Freelance Blog Writer

By William Eve

As a business owner, you should pay attention to every detail and, on top of all, avoid making some basic mistakes because it can cost you more than you expected. In this article you will be presented with some very common marketing mistakes and some possible ways to avoid them.

Not Having a Marketing Plan

As you probably already know, having a strongly developed marketing plan is vital for the survival of every company, especially for smaller ones. However, there are a great number of business owners who realize that they do not have such a plan when they would have needed it and are desperately trying to save their company from a total failure.

There are others who believe that marketing plans should only be developed by big corporations. This is completely false, as it is also very important for smaller companies in order to achieve success. In fact, it is even more important because mistakes can be fixed more easily for big companies, while the small ones are not always able to handle certain situations.

Not Knowing Your Target Audience

Failure to properly define who your exact target audience is for each and every one of the products you offer will undoubtedly lead to a business failure, at least in terms of marketing. You must always take savvy and smart decisions, which are mostly based on adapting the products in order to make them more suitable for the target audience.

Furthermore, it is very important to be very narrow with your definition. Having the smallest number of people possible for your marketing solutions can sometimes represent a very important advantage for your company. Isolate and identify your niche, then market into it.

Marketing Responsibilities

You must always assign a person who is responsible for marketing. If everyone has the same level of responsibility, then no one is responsible for this critical part of your business. As a small business owner, you might not hold the necessary resources for hiring specialized marketing personnel, but you can get the help of a marketing consultant who is specialized in small businesses.

The money spent for this consultant may be the best you’ve ever spent.

Lack of Tracking Mechanisms

Setting up certain mechanisms that can be used for the tracking of your results for each of the marketing campaigns you run is a very important step and you should always consider it. If you lack an efficient way of doing this you will not be able to know if investing in a certain campaign was worth it or not.

No Consistency of Brand Templates

Adding credibility to your branding is one of the most important steps for a successful marketing campaign for your business. In order to be able to achieve this, you should always check parts of your marketing audit, such as invoices, websites, business cards, Yellow Pages and every single component of your advertising.

By doing so, you will be able to decide upon the ideal template for your business in the shortest time possible and gain some extra customers who will appreciate the image of your business. If you fail to think about these aspects from a marketing perspective, then the lack of consistency will probably be obvious to potential customers.

Poor Grammar, Spelling and Copywriting

There are many situations in which you encounter spelling mistakes. Restaurant menus, websites, magazines, newspapers, they are everywhere. And they often they give the impression of a lack of professionalism and poor attention to details. Prospects may assume that the lack of attention to details may be a part of how you operate then take their business elsewhere.

Therefore, it is very important to have someone double check all the texts of your ads and every single document prior to its publishing. Catching and fixing every mistake is very important for every company.

William Eve is the marketing coordinator for the mortgage comparison and application service Home Loan Finder.

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Starting a Side Business – Why Now Is the Time

“You have to spend money to make money” is a popular business adage but the wisdom of this advice can be applied to your personal finances as well.

Spending money in business is all about assessing risks, taking chances which will grow your brand, and looking for opportunities. These are all attitudes you should take toward your personal finances in order to make your money work even harder, and to have the skills and knowledge to make the best investments.

Successfully making money by spending it will mean following these four tips to ensure you choose the right spending options which will make you money.

1) Conquer your fears

In order to spend money with the aim of making more, you need to actually spend it in the first place. However, most of us work so hard for our money that when it comes time to part with it again, we can hold a bit of a tight rein.

It’s easy to doubt yourself and question whether an investment really is the right thing to do with your funds – what if you lose the money, what if it’s all a scam, what if it doesn’t work?

You can sit for days on end thinking of reasons not to spend money to make money, but once you’ve made the decision to expand your wealth in this more aggressive way, you need to keep taking steps towards your goal. To help manage your feelings of fear about your investment, set yourself a budget and be as generous as you can. With that portion of money dedicated to your investment, it is already spent in your budget, so make sure you go ahead and spend it.

It is possible you will lose some of your investment, or break even for your troubles, however, if you are willing to keep researching and keep investing, your risks can take you where you want to go. There is no ultimate secret to making money through investments – it comes down to the fact that if you want to make big returns, you have to put in big investments and along the way you will gain the knowledge you need to take the risk out of the equation.

2) Invest in appearance

Significant amounts of a business’ income will be spent on their branding. This includes their website and business cards, as well as their advertising, promotions and PR. While we’d all like to think it’s what’s on the inside that counts, there is no escaping the fact that we are all judged by our first impression, and businesses know this.

That is why they work hard, and spend hard, to create the right image from the beginning. Even if a business is one guy working from his basement, it is important that he starts on the first day of his business with the image he wants to portray. It is easy to start out with cheaper business cards you’ve designed yourself or a Hotmail email address, however it is not as easy to change the public perception of yourself and your business once it’s out there.

You will be branded from the beginning based on how you appear to the world, so if you are going to spend money to make money, invest in your own branding. No matter what your goal in life, make sure you are ready to achieve it, and that you exude that confidence.

To be successful in any industry, whether you are a gardener or a lawyer, people need to feel comfortable in order for them to put their trust in you. Therefore, rather than turning up to quote for landscaping in a truck with equipment falling out of every window, invest in storage systems, invest in keeping your equipment clean, tidy and new and your customers will invest in you.

3) Invest in efficiency

Businesses also realize the importance of efficiency in their products, services and business operations because the turn around on a product or service can be the difference between you getting the job, or the contract going to your competitors.

It is also just as important that when you promise efficiency you can deliver and so successful businesses will start from a position of strength when it comes to their operations as well, investing in the equipment and technology which will allow them to deliver the best solutions from the start.

There are a number of lessons you can learn about efficiency in investments and the first is to do things right the first time. Don’t start out spending your money on investments without the professional advice of a financial planner or investment broker relative to your investment medium.

It is not an efficient investment practice to start out on your own, so plan to enlist the help of an expert when you can afford it, because without expert knowledge and advice you may never get to the point of being able to afford it!

Spending your money with the help of experts in the field will not only make your investments more profitable, but more efficient to fit into your lifestyle. You may not be able to afford to quit your job and become a career investor, but as the money you spend returns to you, you may have that option in the future. Until then, you need to get on with your job and your life, and with the help of a financial planner or broker, you will have the tools and technology to keep up with your portfolio, make decisions and stay informed with the minimum investment of your time.

4) You get what you pay for

You can spot the difference in quality a mile away between a Burberry trench and a department store knockoff and in order to spend money to make money, you have to spend it on the best. Work with the best people with the best experience in their field to advise you. Do your research into the best companies, stocks or properties in which to invest.

Most importantly expect the best at every turn because as soon as part of your team fails, it can bring the rest down with it. Don’t be afraid to maintain the best, because you are after all, paying top dollar and expect top dollar performance and results in return.

Alban is a personal finance writer at Home Loan Finder, a home loan comparison website.

Do you think there are things we should spend money on that have the potential to make us even more money? It doesn’t have to be investment, but anything that might improve job or business prospects, enhance income or reduce spending—the field is wide open, so have at it!

By Kevin M

You’re over it, all of it—the job, your career, the nine-to-five routine, the morning commute, the cubicle in the corner—you want to ditch it all and finally start your own business.

You’ve already decided what that business will be, and now you’re setting down to consider the details of how you’ll get it off the ground. There’s a major choice to be made: buy an existing business, or build your own from scratch.

Which route will you choose?
 

The advantages and disadvantages of buying a business

Because of the required upfront investment, both the rewards and risks of owning the business will be substantially greater if you buy an existing business. Each will need to be carefully considered to determine if this is the right path, and you can probably come up with a few more of your own.

Advantages of buying an existing business:

1. You’ll be taking over a business that’s already a going concern; a ramp up period will be completely unnecessary
2. Most of what you’re buying when you buy an existing business is the cash flow, which is the single biggest component in the success of any business
3. There’s no speculation as to the viability of an existing business—it’s a going concern and the results of operations are already known
4. You can spend your time improving management, work flows and sales, rather on setting up the business and developing cash flow from scratch
5. A built-in customer base can provide a ready market for parallel product lines
6. You can take advantage of the expertise of existing employees, or even of the previous owner(s) if they agree to stay on as employees during the transition

Disadvantages of buying an existing business:

• Buying an existing business can be costly, often involving both substantial cash up front plus a note for the balance
• If all of your capital is tied up in the purchase of the business, there may be little available if unforeseen problems or cash flow issues develop
• Though the business has a cash flow, you’re risking—with your own money—that you have the expertise to at least maintain it, if not grow it
• With the change in ownership, existing employees and vendors may not stay with you; none are bound by a purchase contract
• If the business you’re buying is a service business, there might be no way to accurately determine how much of it was based on the previous owners skills, personality or connections—the cash flow could dry up quickly once he or she is gone
• If the business fails, you’ll be out your down payment, and you may still be on the hook for any funds borrowed on your home, retirement plans, credit cards or from relatives

Clearly the advantages of buying a business can lift you to new heights, just as the disadvantages can land you in the poor house!

The advantages and disadvantages of building a brand new business

This may be the natural choice for most would-be business owners, if only because it doesn’t require the huge up front investment.

Advantages of building a completely new business:

1. You can usually enter start ups with little or no money up front, especially if you’re going into a service business
2. The success of the business will rely entirely on your skills and abilities, rather than on an injection of capital or on the skills of an owner who’s no longer there
3. Since the business is an upstart, you can work at it gradually while still maintaining other sources of income
4. The business will be customized to your desires; there won’t be any risk of running off existing employees, vendors or customers
5. Building your own business from a cold start will force you to be resourceful; you may find ways to run your business with subcontractors and product sources that will eliminate the need for employees, building space and equipment—all major costs
6. Should the business fail, you can walk away without having lost a large investment, or being stuck with holdover debts from a business that no longer exists

Disadvantages of building a completely new business:

• No cash flow will mean you’ll have to spend most of your time in the beginning building a customer base
• You’ll have to build the business relationships, product lines and workflows to enable you to service your customers—once you have them
• Being the new kid on the block can, in and of itself, be an obstacle to customers; many don’t want to deal with an upstart business
• You’ll probably have to be chief cook and bottle washer, at least until a steady cash flow is established, which will make it easy to get caught up in working on details that won’t put any money in your pocket
• The business will be entirely dependent on your abilities; if they’re deficient, you’ll find out right away and there may not be anyone else to rely on
• You’ll be working alone which can be tough if you’ve never done it before; there’ll be no one to be accountable to and motivation will be a constant struggle

Here we have largely the same situation as with buying an existing business—the outcome can go either way. The risks will be substantially lower than buying an existing business, but at the same time there will be less certainty of your success.

Which is the better way to start a business?

I don’t think one way is better than another as a general rule. It may come down to your skill sets and money situation more than anything else. If you have cash for the upfront investment, and a strong set of management skills, buying an existing business may be the better choice.

On the other hand, if you don’t have the upfront cash to buy a business, but you have strong sales skills and an aptitude for business you want to enter, starting from the ground up may produce better results—at substantially less risk.

What are your thoughts? Are you thinking of starting a business? Or if you already have a business, which route did you choose? Can you offer advice to anyone else? There are no right or wrong answers here, so have fun with it!

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Why Most New Businesses Fail – And How Not to Become One of Them

By Kevin M

Are you thinking about starting your own business? If so, you have a lot of company. According to the Department of Labor, more than one million new businesses are formed each year. Depending on the source quoted, somewhere between 50% and 90% will fail, usually in the first year.

Why do so many businesses fail? And if you’re planning to start a new business, how can you avoid becoming one of them?

Some business ventures fail for bad luck, but probably far more fail for causes that were not only known up front, but could have been prepared for in advance.

Lack of capital

Many new businesses require money up front just to open the doors. Would-be business owners often borrow against their homes, their retirement plans or from their relatives to make it happen.

This presents two problems: 1) debt obligations are created, causing an instant increase in monthly expenses, and 2) no money is available to cover living expenses before the business is generating any serious revenue. The chances that a business will succeed under these circumstances are…questionable!

SOLUTION: Avoid entering any business that will require a large investment up front. Avoid borrowing to make that investment (save that resource for later—you may need it!). Most of what you’re bringing to a new business should be your skills and abilities, not your capital. You don’t want to buy a business, you want to be a business!

Lack of cash flow

Most businesses that fail do so for a lack of cash flow. Maybe some never had it from the beginning, while others had it for a time and lost it. Either way, cash flow IS a business.

SOLUTION: Know where your revenue will come from before you even start a business. Line up clients before you open the doors. If that isn’t possible, develop a large network of reasonable prospects—you should know that a revenue base is there otherwise don’t even start.

Work your business part time to develop revenue while you still have your job for income. Alternatively, work part time (or contract) for as long as it takes to build your business to where it can sustain you financially. This is the one aspect of having a business that you can’t fail at. No cash flow=no business!

Lack of knowledge

People often start businesses they know nothing about. They may start a business because they know someone who’s in it, or they may get into one that’s part of a trending fad. That starts a process of learning in the preverbal “School of Hard Knocks”, and it usually doesn’t end happily.

SOLUTION: Being self-employed is not a time for earn-and-learn; you need to have as much knowledge as possible beforehand. In fact you’re whole basis for becoming self-employed are your abilities as an expert. Consider the following:

• Start a business related to your current occupation
• Learn what you can from published sources
• Work for businesses already in the field
• Start the business as a part time venture so you can make your mistakes while you’re still on someone else’s payroll

Lack of time

Get-rich-quick schemes on TV are so convincing, aren’t they? In six months you’ll be making $50,000 per month(!), sitting all day by a pool or a beach in a warm place with palm trees, surrounded by beautiful people, and a fleet of luxury cars parked nearby–all yours, we’re to presume. Apparently that kind of money will not only buy you all those perks, but it will also leave you with plenty of free time to enjoy them.

But forget all of it! It’s pure fantasy. Most entrepreneurs never get that rich, and few ever have that much free time if they do. Running a business, especially a new one, will require more time than a full time job. Not everyone is willing to work 60, 80 or 100 hours a week to make a business work. Often there are other obligations and interests that make working that many hours undesirable or impossible, and the business withers and dies.

SOLUTION: Be realistic about how much time you’ll need to put into a new business, keeping in mind that you probably won’t be able to afford to pay someone else to do those important-but-not-necessarily-profitable jobs. Clear the decks of as many outside distractions as possible; hobbies may have to be put on hold, and needy friends and family members may have to be held at bay.

You’ll also need to identify the most profitable activities in your business. The ones that generate the most customers, cash flow and profits will be where your first best hours need to be spent. The sooner you can get that going smoothly, the sooner you can hire others for the stuff that doesn’t put money in your pocket. Then you’ll have time for pools and palm trees.

Poor timing

Timing is everything–and nowhere is this more true than starting a business. Many new businesses never get out of the starting gate for no reason more complicated than bad timing.

Sometimes this can be bad timing on your part. Starting a business when you’re unemployed can be really bad timing, and that’s the time many choose to make the move. But cash flow is usually the goal of the unemployed and new business ventures seldom provide this in any abundance, and never quickly.

Sometimes timing issues will be completely beyond your control. Starting a home building business or a mortgage company in 2006 would be stellar examples of bad timing for factors beyond your control. Sometimes you can see that sort of thing coming, sometimes not.

SOLUTION: Starting a business requires a strategic plan. You should do it at a time that’s favorable to you, not at a point of desperation or for a lack of alternatives. Make sure you have your contacts lined up, a tested marketing plan, and your financial house in order before taking the plunge.

Big picture, pay close attention to the economy and to the industry you’re going into. These are the forces that can carry a business one way or another. Better to start a business late in a recession (or early in a recovery) when much of the competition has folded, than when the economy is booming and competitors are on every street corner. Look at developing trends that affect an industry. As an example, consider the affect that direct video rental companies, like Netflix, have had on brick-and-mortar video businesses. New technologies are creating new businesses and destroying others, and the trends can never be ignored.

Choosing the wrong business

Every year thousands of people plunge into businesses they know close to nothing about, and the results are completely predictable. Often this happens through franchising operations or multi-level marketing schemes. Ease of entry is the only reason anyone might consider them, but they can be especially enticing because they carry the notions that…

• other people are doing it (implied: “and so can you”), and
• there’s a company or network to back you up and help you succeed.

Now, both these points may be legitimate, but here’s the thing…as an entrepreneur you’re the point person in any business you’re operating. No matter how many resources you have on the back end, your business will never be any stronger than it is on it’s front line, and that’s you.

SOLUTION: Never pick a business because it seems to be working for others or because of a convincing marketing presentation. Never pick a business that’s completely outside your area of expertise. Pick a business because

1. it’s one where you have demonstrated skills and abilities
2. it’s something you’re genuinely interested in
3. it’s where you have natural connections (networks, affiliate relationships, product sources, etc)
4. you have more than just a casual idea of what it takes to succeed in it
5. it’s one you’re likely to stay with even when the cash drawer isn’t full
6. it’s a business in which you can claim some status as an expert

 
Starting a new business should never be a blind shot in the dark. It should be about calculated risks in which you’re aware of the likely challenges you’ll face, and more importantly, how to overcome them.

Are you in business for yourself? What obstacles did you run into when you started, and how did you work them out?

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