The Entrepreneurial Itch Don't Scratch Until You Read This Book

by Trahair, David

• ISBN13: 9781551807355
• ISBN10: 1551807351
• Format: Paperback
• Copyright: 2006-10-01
• Publisher: Self-Counsel Press

Summary

Statistics say about two out of three small businesses fail within the first three years. Those are some very tough odds. And yet, every year, unsuspecting entrepreneurs show up at their banks asking for small-business loans. The problem is that far too many people go into business without doing thorough research into what it really takes to be successful. And the best way to do this is to learn from those who have worked with hundreds of small businesses.In this book, small-business accountant and author David Trahair lays out in plain language everything that no one else tells you about starting a business. Trahair stresses that it's important for most people to start their business first as a side job. Then market and develop the business until it becomes strong enough to survive those crucial first years and profitable enough to provide an income for the owners. Trahair also offers excellent tips on what the major franchisors will never tell you.

Author Biography

David Trahair is a chartered accountant with more than 20 years’ experience in accounting, finance, and tax. He has made many television appearances as well as being a speaker on numerous radio programs. He is also a feature writer on the web at Moneysense.ca and Microsoft.com, and he offers useful financial information on his website, http://www.trahair.com/.

Table of Contents

1 WHY DO YOU WANT TO BE SELF-EMPLOYED?	1
You Hate Your Job	1
You Hate Aspects of Your Job	2
The commute	2
Annoying coworkers	2
Making money for others	3
You Lose Your Job	3
Your Life Changes	4
Maybe You've Just Got the Urge	4
Why Listen to Me?	4
The Self-Employment Alternative	5
Do You Have the Entrepreneurial Itch?	7
How This Book Will Help Scratch Your Itch	7
2 WHAT DOES IT TAKE TO SUCCEED?	9
The Key to Success	9
Attributes of a Successful Entrepreneur	10
Attributes of a Successful Business	12
Leg 1: Operations	12
Leg 2: Selling and marketing	13
Leg 3: Finance and administration	14
3 WHAT DO YOU WANT TO DO?	17
"A Restaurant Sounds Good"	18
Something Old? Something New?	19
Research, Research, Research	20
The Business Plan	23
Research Should Never End	25
Niche Today, Gone Tomorrow?	26
What is good about a niche?	27
Always be thinking about your next niche	27
4 IF YOU CAN SELL, YOU'LL DO WELL	31
What Doesn't Work	32
The mailing list	32
Expensive one-time advertising	33
Newsletters	33
Build a website and they will come	34
What Works (for Me)	35
Personal contacts	35
The story of my dentist	36
Other Keys to Marketing Your Business	37
5 GIVE YOURSELF A CHANCE: START ON A SHOESTRING	41
The Home Office	42
Advantages of a home office	42
Disadvantages of a home office	42
Start-up Costs	43
Why Not Get the Bank to Help?	44
Where Does Cash Come From Besides a Bank Loan?	45
Your savings and "sweat equity"	45
Friends and family	45
Credit cards	46
The bank again	46
The Cash-Flow Crunch	47
Tips for easing the cash-flow crunch	47
Track your daily cash flow	49
6 BOOKKEEPING: LIFEBLOOD OF A BUSINESS	53
Basic Accounting Concepts	53
Accrual accounting	54
Debits and credits	55
Financial statements and journal entries	56
Equity	57
Capital assets, amortization, and depreciation	58
Bookkeeping for Sole Proprietors	59
Recording business finances separately makes tax time easier	60
Recording business finances separately gives a clearer view of your personal finances	60
Recording business finances separately lets you see how your business is doing	61
Act Like a Corporation	61
Bookkeeping Made Easy	62
Invoicing and accounts receivable	62
Paying bills	63
Other bookkeeping entries	63
A word about using spreadsheets for bookkeeping	64
Setting Up Your Books	65
Bookkeepers versus accountants	65
The chart of accounts	66
Schedule C — Profit or Loss from Business (US)	66
Form T2124 — Statement of Business Activities (Canada)	67
Group your expenses	68
Focus on the Key Numbers	71
Improving the Bottom Line	72
Increasing revenue	72
Cutting the right expenses	72
Keeping Current Is Key	74
7 AIM FOR THE IDEAL BUSINESS	75
The Ideal Client	75
Pick and choose your clients	77
Make sure your clients are in a solid industry	77
Get Others to Do the Work	78
What kind of help do you need?	79
When can you afford to hire someone?	79
Competing with You Is Difficult	80
Your Whole Family Is Not Tied Up in the Business	81
Could It Be Web-Based?	81
8 RUN YOUR BUSINESS; DON'T LET IT RUN YOU	83
Juggling Three Balls at Once	84
What's On Your Dashboard?	85
My dashboard	86
Other useful information	88
The Early Stage	88
The Growth Stage	89
9 IT'S NOT THE TIME, IT'S THE EFFORT	91
The Good Old Hourly Rate	92
Disadvantages of Hourly Billing	92
It focuses on hours, not results	92
It limits the amount of money you can make	93
Billable hours become more important than business growth	94
It treats customers unequally	94
It doesn't reward the "finding" function	95
It penalizes technological advances	95
Hourly Billing Versus Set Fees	95
Setting an hourly rate	96
Going beyond time	97
Value points	97
Time-Tracking Secrets	98
Keep track during the day	98
Use increments of less than one hour	99
Track chargeable and nonchargeable time	99
Time-Tracking and Reporting Software	100
What to look for	101
The quest for five-star time-tracking and reporting software	101
Why I chose BillQuick	103
10 INTEGRATE YOUR LIFE WITH YOUR BUSINESS	109
Life Tip 1 Do What You Don't Want to Do First	111
Life Tip 2 You Get What You Expect	111
Life Tip 3 Balance Is the Key	113
Life Tip 4 Plan on a Weekly, Not a Daily, Basis	113
Life Tip 5 Be Flexible with Your Time	114
Life Tip 6 Don't Be Afraid to Ask a Stupid Question	115
Life Tip 7 Stay Away from Those Who Say You Can't Do It	116
Life Tip 8 Don't Be Afraid of Your Competition	117
Life Tip 9 Leave Lots of Time for Completing Each Task	118
Life Tip 10 Don't Wait for Everything to Be Perfect	119
11 THE MILLIONAIRE DREAM: I'LL SELL IT AND GET RICH!	121
Business Valuation Methods	121
Business valuation method 1: Profit multiple	122
Business valuation method 2: Book value	124
Business valuation method 3: Service business	125
Are You Building It to Sell It?	126
Make it work without you	126
Make it big enough	127
Take time for planning	128
12 COULD A FRANCHISE BE FOR YOU?	131
What Is a Franchise Anyway?	131
Advantages of a franchise	132
Disadvantages of a franchise	133
How Much Is a Franchise Worth?	135
Questions to Ask Before You Buy	136
Watch Out for Scams	137
Examples of franchise fraud	138
How to spot a scam	139
The Five Most Frequently Asked Questions about Franchises	140
Where can I get a company's presale disclosure document?	140
How can I find out if there have been complaints against a company?	141
How can I file a complaint against a company?	142
How do I know what must be included in a disclosure document or offering circular?	142
How can I find a lawyer who specializes in franchising?	143
13 THE SELF-EMPLOYMENT PENSION PLAN	145
Cushy Pension Plans Are Dying Out	145
Keeping a Job Is Getting Tougher	146
What Are You Going to Do?	146
Freedom 55?	147
I Love What I Do Now — Why Stop?	148
14 DO YOU STILL HAVE THE ENTREPRENEURIAL ITCH?	151