Part I: Preparing for Growth

Chapter 1
THINKING ENTREPRENEURIALLY

IN This Chapter
Risks and rewards of entrepreneurship
Entrepreneurial traits
Integrating personal and business goals
Strategies for success
Next steps: your action plan

Introduction
The term “entrepreneur” is often applied to small-business owners as a class, in its literal sense of “one who organizes, manages and assumes the risks of a business.” But this doesn’t communicate the special talents that successful entrepreneurs have, or the unique nature of entrepreneurial vision and growth.
Most small businesses have the ability to be entrepreneurial, but their owners choose to keep them small to avoid the complications that come with growth. In doing so, they avoid the risks of entrepreneurship, but they also forfeit its most exciting rewards.
By contrast, entrepreneurs are never content with the status quo. They’re always looking for new markets, new ideas and new challenges. They are innovative, visionary people with a strong desire to take their ideas as far as they can. If someone else is doing it, entrepreneurs will find a way to do it better. If no one else is doing it, entrepreneurs will find a way to make it happen.
Whether you’re launching a new entrepreneurial business, or preparing to take an existing business to the next level, you need to understand the special challenges that entrepreneurs face.
Risks and Rewards of Entrepreneurship
Running a entrepreneurial business can be challenging even in the best economic climate. The constant drive for innovation and adaptation, and the frequent need to take calculated risks, makes entrepreneurship challenging and exciting. To succeed, an entrepreneur needs courage, knowledge, foresight, good advice, plenty of determination, and a little bit of luck.
Research shows that less than a third of small businesses survive for seven years or longer. Factors that affect a firm’s long-term viability include having adequate capital and employees, as well as the owner’s education level, determination and adaptability. Other risks entrepreneurs face include:
Stress. Entrepreneurs have bigger goals, which means they make bigger decisions than the ordinary small-business owner. The more you have at stake, the more stressful running a high-growth business will be. In the short term, stress can harm your work, your decision-making and your relationships. In the long term, it can cause serious health problems ranging from insomnia and depression to heart disease and stroke.
Financial hardship. You may have your own money or other assets at risk. If your business fails, you may end up with serious debt and credit problems that make it hard to get back on your feet.
Failure. The emotional effects of business failure can be hard to handle, especially for people who don’t have strong support from friends and family. Although many successful entrepreneurs have said that failure was a valuable learning experience—or even a necessary one—few would say the experience was easy or pleasant.
Long hours. You may have to work 60 hours or more per week to bring an entrepreneurial dream to reality. This could mean giving up some of the activities you currently enjoy.
Family problems. If your family members don’t understand and accept the risks of managing a growing business—such as longer hours and new financial stresses—conflicts are likely. The same is true if you don’t recognize your family’s need for attention and support. Balancing family needs against business demands is one of the hardest parts of entrepreneurship, but it’s essential to your happiness and success.
Only you can decide how much risk is acceptable at this stage of your life. Your age, income level, family status, work experience and many other factors affect this decision. For instance, if you’re 25 and single, you probably have more risk tolerance than a married 50-year-old whose retirement savings are at stake.
When weighing risk, look at the risks of not acting. Although entrepreneurship is risky, so is every other way of making a living. Avoiding an entrepreneurial opportunity can be risky, too!
Now, let’s look at some of the rewards of entrepreneurship:
Pride. Most entrepreneurs enjoy the sense of self-worth and accomplishment that comes with taking risks and overcoming challenges to establish a new and worthwhile business idea. But entrepreneurs aren’t simply helping themselves; they’re also helping their communities. All over America, entrepreneurs like you are meeting customer needs, creating jobs, driving economic growth, solving problems and revitalizing communities.
Independence. If you’re like most entrepreneurs, being your own boss is a powerful incentive.
Security. In the past, starting a business was a risky alternative to the stability of working for someone else. Today, working for someone else may actually be riskier than striking out on your own. Downsizing and outsourcing are common, and businesses tend to be less willing to make a long-term commitment to their employees. In this environment, your business may offer more stability than a traditional job.
Money. The financial rewards of entrepreneurship can go far beyond what you would earn at a normal job.
Excitement. Entrepreneurship offers excitement and creative opportunities that most traditional jobs don’t.
Having thought about these risks and rewards, do you feel confident and excited about your business idea? Remember: Running a growing business takes plenty of energy, dedication and enthusiasm. It may be better to hold off on your idea than to pursue it at the wrong time.
Deciding that it’s not a good time to pursue your dream doesn’t mean you’ve failed. It means you’re a smart, responsible decision-maker who carefully weighs risks and rewards. When you’re ready to make your move, these traits will serve you well.
…
I fell into my business little by little. People had been telling me I should do it for years, but it was a long time before I actually found the nerve. And even then, I moved slowly. At first, I thought I didn’t want to sell my work. Then, I decided to sell it in just a few places while holding down my office job.
Once I left my job, I told myself I’d only work 30 hours a week, which turned into 40. And then I said 50 hours, but not on weekends. And then things started to get a little crazy.
Every time I tried to set a limit for my business, it steamrolled right over me. Maybe that’s a good problem to have if you’re organized. But I really wasn’t.
Renata Stein had an unusual but rewarding hobby: She designed one-of-a-kind purses using unconventional fabrics and other materials. Vintage cloth flowers, striped upholstery fabric, oilcloth, latex, plastic fruit and old toys all figured into her colorful creations. There was nothing else like them on the market.
The response from customers at small boutiques and craft fairs around Los Angeles was enthusiastic, so Renata quit her office job and started a small business called Fiery Angel. She knew her new business would be a lot of work. Her unique bags took plenty of time to design and stitch. More than once, she’d had trouble meeting deadlines for fairs and shows. But, she reasoned, that was back when she had a day job and worked at her sewing during evenings and weekends. Now, she’d have plenty of time to be creative.
Or so she thought.
…
ENTREPRENEURIAL TRAITS
Every day, millions of people dream of starting a business. Every day, hundreds of entrepreneurs take the plunge. What’s the difference between those who dream about it and those who do it?
Well, entrepreneurs are usually young, old or somewhere in between. They’re typically either male or female. They’re often college-educated, or not. In other words, they come from every possible background.
However, successful entrepreneurs do have certain traits in common.
Passion. Enjoying what you do is a big part of doing it well, whether you’re playing a sport, learning a skill or running a business. If you’re not excited about your business idea, you probably won’t be able to get other people excited.
Persistence. Entrepreneurs don’t give up when they face problems or setbacks. Even when success seems far away, they stay on course. And they don’t let rejection get them down. They know they may have to hear no many times before they hear yes, so they learn to take setbacks in stride.
Self-confidence. Entrepreneurs have confidence in themselves and in their ideas. But they also know that being confident means being able to ask for help and listen to other people’s advice. The best entrepreneurs are confident in their ability to improve, adapt and learn from mistakes, so they’re always open to constructive criticism and new ideas.
Optimism. Entrepreneurs tend to be optimistic. This doesn’t mean they sit around hoping for the best. Rather, they have what’s known as effort optimism; they believe hard work and planning are likely to pay off. In short, they don’t assume things will improve; they assume they can improve things.
Critical thinking. The best entrepreneurs look at situations as they are, not as they want or imagine them to be. They don’t let political or social prejudices get in the way of adapting to a changing world. Furthermore, they don’t cherrypick facts to support their plans. Instead, they base their plans on the best available evidence.
Creativity. New product ideas often come from new ways of looking at a problem. Creativity and flexibility are valuable qualities in launching, running and growing a business. In fact, some studies suggest that creativity is the main factor that determines whether an entrepreneur will succeed or fail.
Curiosity. Entrepreneurs love learning new things, meeting new people and finding out more about their industry, their customers and their competitors.
Risk tolerance. Entrepreneurs have fears and insecurities like everyone else, but they’re able to push them aside and accept the risks of business ownership. They also know that they need to look before they leap. They’re brave, but they’re not reckless.
Working hard. An entrepreneur we know once said, “I work only half the time: 12 hours a day!” Running a business takes self-motivation, long hours and hard work. And success doesn’t mean you get to relax; instead, it brings new challenges. Entrepreneurs face these challenges gladly and take pride in overcoming them.
Cooperation. Smart entrepreneurs don’t try to do everything themselves. They are comfortable assigning tasks to qualified people, collaborating with employees and contractors, and sharing power with partners.
Communication skills. Entrepreneurs need excellent communication skills to handle upset customers, manage employees, negotiate contracts, secure financing and sell products. And of course, marketing your business is an ongoing process of communicating the things that make it special.
Fairness. Successful entrepreneurs earn a good reputation through fair dealing and personal integrity. Because they’re in business for the long haul, they avoid short-term gains that may lead to long-term losses. The best entrepreneurs treat customers, employees and partners fairly and respectfully. In negotiations, they pursue a win-win outcome.
A healthy lifestyle. Wise entrepreneurs take care of themselves. That means eating right, managing stress and getting plenty of exercise and sleep. When you’re in good mental and physical health, you make better decisions and have an easier time coping with the daily demands of a growing business. For more information, visit www.cdc.gov/physicalactivity/everyone/guidelines/adults.html.
All these traits have one thing in common: You can learn and practice them. Few entrepreneurs have these traits from the start. Instead, they hone the skills they have and develop the ones they don’t.
Completing the Entrepreneurial Traits Worksheet and the Business Skills Worksheet will tell you which traits you already have and which you need to develop.
Note that good traits can become faults if carried to extremes. For instance, there can be a fine line between being persistent and being stubborn, or between being self-confident and being delusional.
Here are some problems entrepreneurs should always watch out for:
Bad temper. Some people just aren’t very good at working with others. They get mad too easily, stay mad too long and have a hard time putting themselves in other people’s shoes. If you have these problems, you definitely need to work on them. Business owners should always be fair and respectful to customers and employees. They also need to stay calm to make smart decisions; studies show that being angry causes our IQ to drop!
Stubbornness. Entrepreneurs need to strike a healthy balance between trusting their gut instincts and staying flexible. They also need to be able to admit when they’re wrong. Sometimes, they may even have to swallow their pride and accept the blame for a problem that wasn’t really their fault. Otherwise, they might chase away customers, employees and partners.
Arrogance. Entrepreneurs who think they can do everything singlehandedly often find it difficult to foster teamwork among employees, partners and suppliers. Other entrepreneurs alienate people by throwing authority around for the fun of it. Remember that no business exists in isolation. Recognize the value of these relationships, and don’t jeopardize them with arrogant behavior.
Greed. It’s important to want to succeed, but sacrificing professional or personal relationships for success is ultimately self-destructive. The best entrepreneurs have self-control, as well as a balanced vision of success that includes fair play, win-win solutions and good citizenship.
Overvaluing authority. If you value your authority too much, you might not want to give any to other people. The result? A customer walks into your business, finds that no one but you can make a simple decision and goes away mad. Also, people who overvalue their authority tend to see advice or criticism as a threat. They don’t want to be questioned or challenged, even if they’re driving the business into a ditch.
Overwork. Some people just can’t stop working at the end of the day. Maybe they’re trying to get away from problems elsewhere in their lives, or maybe they’re so afraid of failure that they’re overdoing things. Whatever the cause, it’s dangerous. A balanced life is much better for you. And that makes it better for your business, too.
Putting things off. This is one of the worst habits a business owner can have. Putting off chores and responsibilities can waste huge amounts of money and time. If a task is unpleasant, why drag it out? Get it over with and move on to something you actually enjoy.
…
About a year after I got serious about selling my purses, Fiery Angel was taking about 80 hours of work a week.
At first, it was exciting to be overworked. But a little later, my purses were picked up by a big boutique on Hollywood and Vermont. After that, my life was just a blur. I was working almost 100 hours a week and I hardly ever got to sleep before 2 a.m. At that point, I think I was making almost 60 purses a month.
When I wasn’t designing and sewing purses, I was buying raw materials, balancing my books, checking on orders, juggling consignments and wholesale contracts. I’d had this idea that success is where you get to stop and relax, and maybe let someone else take up the slack. But in reality, more success meant more work and longer hours.
I didn’t have a problem with the work itself. I still loved my work. The problem was just that I had no structures in place that were growing with me. It felt like I was always playing catch-up. Even if there were steps I could take to improve things, those steps took time. And time was not a resource I could spare.
After Renata sold her work to a couple of high-end boutiques in Chicago, the Fiery Angel line of purses was picked up by a New York showroom. Suddenly, she had more work than she could handle.
I woke up one day and realized that I missed my office job! I missed being able to just walk out the door at the end of the day and leave the job behind me. But much more than that, I missed having time for my parents and my friends.
…
Integrating Business and Personal Goals
A growing business is very likely to become a central part of your life, so it’s important to make sure your business goals are in tune with your personal goals.
Here are some typical business goals:
Grow your business by 20 percent a year
Grow the business to a certain size and sell it to someone else
Grow the business to a certain size and open a second location
Hire two employees in your first year
Capture 25 percent of your market
Revitalize a struggling community
And here are some typical personal goals:
Use your creativity or talent
Move to a bigger home
Save money for your child’s education
Sponsor community events (concerts, lectures, afterschool programs)
Spend plenty of time with your family
Help to solve a community problem
Of course, these goals are not mutually exclusive. In other words, striving to grow your business by 20 percent per year does not rule out spending time with your family. The purpose of listing goals is simply to set priorities and identify potential conflicts—both within and between the two categories.
The Personal and Family Considerations Worksheet and the Business and Personal Goals Worksheet will help you assess whether your business goals are likely to conflict with your lifestyle and personal relationships.
Personal Assessment
As the leader of your business, you’re responsible for all business tasks, including sales, marketing, bookkeeping and cleaning. Even if you hire someone else to do these tasks, you still need to know enough about them to judge your employee’s performance.
Complete the Personal Assessment Worksheet to take an honest look at the skills you will need to run a growing business.
Strategies for Success
Business success can be defined in all sorts of ways—including business size, market share, profitability, efficiency, the ability to innovate, and serving customer needs. Whatever your definition of success may be, the following skills and resources will help you achieve it:
Bootstrapping
Mentoring
Networking
Time management
Stress management
Professionalism
Bootstrapping
Bootstrapping means getting by with as few resources as possible and getting the most out of the ones you have.
Bootstrapping isn’t just a way to launch a new business. It’s also a way to keep it lean, flexible and profitable while you grow. Whether you’re just starting out, or you’re opening your third location in three years, you should always be looking for creative ways to cut costs, increase profits and forge useful alliances. This will keep your operating costs down, and it will also allow you to maintain equity in your growing business. Here are some tips:
Share a rental space with another business. Or form a cooperative or collective with likeminded or complementary businesses.
If you need special equipment or work space, find another business that will let you rent it during off-peak hours.
Test-market new products online. You can learn a lot about customer demand, price sensitivity and preferences by offering a product on sites like Etsy or eBay. Best of all, you get paid for it!
Look at crowdfunding options such as Kickstarter.
Choose policies that save money while giving you a positive brand image. For example, send marketing materials, catalogs and invoices electronically instead of printing and mailing them.
Cut down on the need for full-time employees by using independent contractors, temp workers, or services from other businesses.
Use barter arrangements to procure supplies, or trade the expertise you have for expertise you don’t.
Budget carefully for purchases of consumables and capital investment.
Mentoring
A mentor is a person who agrees to give you ongoing guidance and support as you work toward your business goals.
A good mentor offers smart advice without trying to run your business. Someone who tries to control your business decisions doesn’t have the right attitude to be a mentor. Look for a guide instead of a boss.
Your mentor should meet with you regularly to assess your progress, offer constructive criticism and motivate you to excel. A mentor can also offer an objective take on your ideas and help you to improve them.
How often you meet with your mentor is up to the two of you, but an hour per month or quarter is typical. Your mentor’s time is valuable, so prepare for each meeting by organizing your information. You can also keep your mentor informed by sending a brief monthly email.
If you have a good relationship with someone who’s given you business advice in the past, you can simply ask that person to be your mentor. Other options include approaching a successful business owner in your community, or contacting your local Small Business Development Center (SBDC); visit www.sba.gov/tools/local-assistance/sbdc to find an SBDC near you.
Networking
Networking means making connections with people who can help you succeed. It’s never too early to start making these connections. Start by writing the names of everyone you know on notecards.
Family members. This may seem too obvious to mention. However, your family members may have talents that will help you down the line. Do you have a nephew who knows all about social media, or a cousin with drawing or painting talent? You may find these skills very useful as your business grows.
Friends. In addition to their own skills and resources, your friends have their own networks. They can promote your business, ask favors and get advice.
Business contacts. Employees, contractors, suppliers and other people you meet through your business can be very valuable assets as long as you won’t be competing with them directly. This is also a good place to look for mentors or even business partners.
School contacts. Schools bring people of all types together, which makes them a great networking resource. Your fellow students probably have a wide variety of skills, contacts and useful information. You may also know teachers, staff or counselors who could be helpful.
Online groups and forums. If you spend time on an online forum, you may be able to get advice from fellow members. Deal only with people you know and trust. Also, don’t join a forum just to talk about your business, unless that’s the stated purpose of the forum.
Interest groups. Do you have a hobby, belong to a club or play a sport? Can you join your chamber of commerce or a local business support group? Attending local meetups and events is one of the best ways to build your list of contacts.
Once you’ve made your list, think of the things you’ll need to get your business up and running. Could anyone on the list help you? If so, make a note of it. As you meet new people, add them to your file. Keep track of their personal information for future reference. For instance, you could make a note about issues important to that person, the person’s birthday, the names of any children, and so on.
When networking, keep three things in mind. First, don’t treat networking as a sales opportunity. The point is not to promote yourself, but to build long-term relationships, connections and trust. With that goal in mind, always make an effort to stay positive and listen more than you talk. If you take an honest, friendly interest in the people you meet, they’ll be more likely to do the same for you. If your interest is phony or self-serving, people will know it.
Second, don’t treat networking as a one-way street. It’s not just about looking for people who can help you; it’s also about looking for people, groups and causes you can help. Relationships based on networking should always benefit both parties. The more you’re willing to give, the more you’re likely to get.
Last, keep your network “warm” by scheduling time on your calendar to stay in touch. Ignoring members of your network for months, and then calling them out of the blue on the day you need something, isn’t likely to be successful.
…
Why was Renata so overworked? Part of the problem was that her purses were a lot more popular than she’d expected. But there were other problems, too.
Renata knew she could save money and time by buying materials in bulk, but she never seemed to have enough cash on hand. Therefore, she had no choice but to buy raw materials every week or two, make her purses as fast as possible, and repeat the process. It was costing her a lot of time and money to scour the city for new and exciting materials week after week. But without those materials, she didn’t have a business.
She asked friends and relatives to be on the lookout for unusual cloth and trinkets. That helped a little. But none of them had her eye; they usually brought things she didn’t like and wouldn’t use.
One night I was complaining to my mom about all this, and she told me that what made me strong was making me weak. What made people love my purses was that no two were alike, and they had all these weird materials no one expected to see.
But once I started selling them, people did expect to see those materials. So I had to keep using them, and that was making it hard for me to succeed. She was right: My strength was my weakness!
…
Time Management
Entrepreneurs who fail to manage their time often fall into a cycle of inefficiency and poor performance. As they struggle to get a new idea off the ground, they may be too busy to teach employees how to work effectively, so they end up trying to do too many tasks themselves. They don’t have time to weed out mistakes and improve practices. They can’t build strong relationships with customers and suppliers, nor can they fully enjoy their leisure time.
Effective time management leads to effective business management. Entrepreneurs must be able to delegate duties and give people the authority to perform tasks in the most effective ways. After all, you should focus your efforts on the tasks that only you can do: guiding your business by setting goals, and devising strategies that will achieve those goals.
Balancing Business and Personal Time
Because you have so much flexibility in creating your own work environment and schedule, you also need to address personal priorities very early in your venture. Where will you draw the boundaries between work, family and leisure time?
It’s easy for entrepreneurs to focus too much on the needs of their growing business. This sometimes alienates them from family and friends, and leaves them with no time for community, athletic or creative pursuits.
From the start, smart entrepreneurs evaluate their personal priorities and plan a schedule that allows them to fulfill these priorities. If you’re not already an organized person, attend classes or hire a planning expert to help you set up your business systems.
Setting boundaries
One of the biggest challenges of running a business is setting strict boundaries between home and work. When it’s 5 p.m. in an office, people can get up, go home and leave their jobs behind. When you’re a business owner, your work tends to follow you wherever you go.
This can put a huge strain on family relations. You may have to negotiate with your family to get chores done that you previously handled. You may even have to let some chores go entirely. Be honest with your family from the start, and make sure you begin with their blessing.
If you can get your spouse or kids to help out from time to time, that’s great. But don’t expect them to drop everything and come running every time you get overwhelmed. If you need ongoing help, set up a formal arrangement and stick to it.
It’s vitally important to set boundaries between family time and work time. There should be a clear cutoff point for work each day, after which you apply yourself to family life and refrain from talking about business unless you’re asked about it.
It helps to have some kind of ritual—like having dinner, watching a movie or working out at the gym—to help you switch gears and feel that work is over for the day. If possible, have it be something you do with friends or family members, so you have a commitment you can’t break easily.
If it’s hard to stop working on the weekends, consider taking a trip early Saturday morning. Have a picnic, or visit the farmers’ market or a museum. Find something you like to do, and get into the habit of doing it, so that your free time has some structure.
Sometimes, you’ll have to work in your free time. The goal is to reduce these times to the bare minimum. If work keeps infringing on your personal time, you need to restructure your working habits, not your time with family and friends.
If you’re constantly overwhelmed with work, you might have to consider hiring an employee or independent contractor, or finding an apprentice.
…
I was facing a lot of challenges. Some big, some little. But almost all of them came down to time. It wasn’t just my business, either. After the orders started coming in from New York, I woke up one morning and realized it had been two months since I’d visited my parents and six months since I’d been on a date. I’d skipped my high-school reunion. I’d even missed my niece’s wedding. I was living in a bubble, and it was getting smaller all the time.
Renata was too busy to shop or cook, so she usually ordered food to go from local restaurants, often paying as much as 5 dollars extra to have it delivered. Since she had no time to jog or go to the gym, she’d gained 10 pounds.
On paper, she was making good money. But for some reason, it was never there when she needed it. She felt like she was always struggling to make ends meet. She never had enough time to balance her books, collect past-due payments or keep track of her consignments.
As you can imagine, I was starting to have serious cash flow problems. I had to spend money to fill new orders, but the old orders weren’t getting paid quickly enough to cover my expenses. A couple of times, I had to put the materials on my credit card.
I knew I needed help, absolutely. But how could I afford it? And how would I ever find the time to sit down and talk to someone?
…
Stress Management
Entrepreneurship puts your time, money, credit, personal relationships and pride at stake. Even a viable businesses can face long periods of uncertainty; many of America’s most successful entrepreneurs have had moments when they felt sure they would fail. With so much at stake, it’s no wonder that many entrepreneurs see stress as one of their biggest challenges.
That’s why it’s good to create a plan for dealing with stressful situations. Knowing you’ve got a plan in place may even reduce the amount of stress you feel.
Your plan should include stress management techniques, as well as sources for help such as online forums, support groups or counselors. Also, think in advance about how much stress is too much. For example, if you’re losing a lot of sleep, or having frequent conflicts with your family, that might be a warning sign to get help, slow down or possibly even sell your business. Having a plan in place will make these tough decisions easier.
Stress Management Tips
Take a break. If you step away from the problem for a while, a solution might come to you. Even if it doesn’t, getting some distance will clear your head and help you make better decisions.
Get some exercise. Research shows that exercise reduces stress and eases depression. It can also help to reverse the physical effects of stress. It can even keep you from tossing and turning when you should be sleeping. Before beginning an exercise program, consult your doctor.
Eat well. We all know people who seem to live on donuts and coffee, and others who end up eating fast food at every meal because they have no time to shop or cook. A business is only as healthy as its owner, so get your priorities straight. Structuring your workday should include making time to eat healthy, balanced meals; a good breakfast is especially important. Different people have different needs, so ask your doctor for advice on eating right and staying fit.
Get enough sleep. The combination of high stress and little sleep is very dangerous. Do your best to get at least seven hours of sleep every night. Apart from worrying about business, common causes of poor sleep include having alcohol, caffeine or heavy meals within three hours of bedtime. Try to improve your sleep by changing habits like these, instead of taking medications that can affect the quality of your sleep (and may have other dangerous side effects).
Think positively. You may not have control over stressful events, but you can control how you react to them. A stressful situation can make you feel like everything in your life is awful. Don’t fall into this trap! Situations are rarely as bad as they seem to be when we’re feeling stressed. Keeping the problem in perspective will help you cope and may even lead to a solution.
Find support. No matter what you’re going through, someone else has survived it and can help you get through it. Local support groups and online business forums are good places to seek advice from fellow entrepreneurs.
Slow down. Many people are calmed and strengthened by prayer or meditation. If that’s not your style, set aside some quiet time every day to reflect and relax. It doesn’t matter what method you use to calm down and unwind, as long as you make it a daily routine.
Stay motivated. Carry an inspirational quote with you. This could be something a famous person said, a favorite religious text or a personal note from someone who believes in you.
Get help. If you have a hard time overcoming negative thoughts, cognitive behavior therapy (CBT) is proven to reduce anxiety and depression.
…
Finally, Renata called up her friend Alison, who was an accountant, and offered her a custom handbag in return for a few hours of consultation. To her relief, Alison agreed.
The first thing Alison discovered was that Fiery Angel’s biggest clients were taking a crippling 90 days to pay. No wonder Renata was having cash flow problems!
Furthermore, Renata was spending an average of $680 per month on prepared and delivered food, because she simply didn’t have time to cook.
Alison also noticed that Renata had about $3,700 in unsold merchandise gathering dust in 15 consignment stores, at a time when she was struggling to keep up with demand. By pulling her unsold merchandise from those stores, she could fill her outstanding orders, earn some cash and get a little bit of breathing room.
She soon realized that Renata hadn’t kept track of the money she spent on materials, so she asked her what the average purse cost to make.
“Usually, I’m just paying for thread and fabric,” Renata said. “I find most of the other stuff I use.” With a little more probing, Alison found that on average, each purse took about eight hours to make, once she factored in the time it took Renata to find all her “free” materials. On top of that, she regularly bought glue, trinkets and charms. And when she was in a hurry, she sometimes even bought high-grade material from fabric retailers.
When Renata saw the breakdown of costs, she realized that she’d been significantly undercharging customers. She’d also been missing out on more than $800 in tax deductions.
What Alison showed me was just amazing to me. I’d never thought about how my lifestyle was affecting my cash flow. But between paying a fortune for food, and being too busy to manage my accounts, I was causing all kinds of problems for myself.
It was a vicious circle, but I didn’t realize it until I got that outside perspective. Before, I hadn’t known what was going on, so the idea of changing things hadn’t meant much to me. Back then, I would’ve said, “Change what things? How?” Now, I could see what had to be done, and I was excited to do it.
…
Professionalism
Many high-growth companies have started out as part-time or home-based ventures. Whether you’re working full-time or part-time, at home or in an office, developing a professional business image is an important precondition for successful growth.
If your business is home-based or operates out of a small office, consider these issues:
Do you need a professional address (e.g., a PO box instead of a rural address)?
Does your neighborhood fit your business image?
Do you have professionally designed and printed business graphics (logo, business cards, letterhead, signage, etc.)?
Does your business have its own phone number, voicemail and email address? Responding promptly to messages is perhaps the most important factor in projecting a professional image.
Do you have a separate place of business? If not, find an area of your house that you can devote exclusively to your business. Decorate and light it differently, so it really feels like you’re going to work when you walk through the door. Not only will this help you to maintain a professional image, but it may also entitle you to take a home office deduction when you file your tax return.
Can you keep regular office hours? Even if you work part-time, customers may expect full-time service.
Do your correspondence, business cards, labels, online presence, email address, signage and packaging work together to project a competent, professional image?
If you’re running a business from home, zoning laws may affect your operations. We will discuss this in greater detail in Chapter 6 Laws, Regulations and Taxes.
Setting Up your Office
Small or home-based offices can look and feel professional, provided you set them up with your business goals in mind:
Electricity. If you’re going to be running a lot of new office machines, have an electrician check your wiring. To keep your energy costs down, look for appliances that have earned the Energy Star® designation, which are designed to use very little electricity. You should also buy an uninterruptible power supply (UPS) to protect your equipment from power surges and outages.
Internet connectivity. If the infrastructure in your neighborhood is poor, your connection speed may be slow or erratic. Depending on where your office is located, you may also need to have new outlets or cables installed.
Lighting. Good overhead lighting reduces eyestrain and makes your office more pleasant for you and your clients. Compact fluorescent and LED bulbs are bright and economical. Skylights and solar tubes are another option.
Air conditioning. Your office must have good ventilation and air conditioning. The ability to make your customers feel comfortable and relaxed in all kinds of weather is a basic requirement.
Next Steps: Your Action Plan
An action plan is a simple but effective project management tool that lists the steps required to complete a task or achieve a goal. As such, it’s different from your daily calendar or scheduler.
If you were planning a party at your house, you might write “Party” on your calendar to remind you of the date. By contrast, an action plan lists all the steps for arranging the party, such as send invitations, plan menu and go shopping.
Use the Action Plan Worksheet to prioritize your action items, and then begin working on them systematically.
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While going through Renata’s accounts, Alison discovered almost $1,200 in past-due receivables that Renata had been too distracted to collect. At Alison’s urging, Renata collected these invoices and used most of this money to buy bulk materials. She also put an ad on Craigslist offering to buy fabric scraps and worn-out vintage clothing. This saved her considerable time and money, and brought in material she might not have found otherwise. Some people were so happy to empty out their closets, they gave her the fabric for free.
Alison came up with new payment terms for stores and distributors, including a discount for buyers who paid within 30 days. Most of them took advantage of this discount, which did a lot to improve Fiery Angel’s cash flow.
With some of the pressure off, Renata started cooking for herself again. This cut her food costs in half, and allowed her to hire a part-time worker to do some sewing, piecework, packing and mailing.
Alison was a huge help with the financial side of my business. But more than that, she helped me organize my personal time. I’m still very, very busy, but now it’s a good kind of busy. Once I stopped wasting so much time, I stopped feeling so overwhelmed and crazy.
These days, I take a break every day at 4 p.m., and go for a run or visit the gym. I meet up with friends two or three nights a week, even if it’s just to have a cup of tea at a café. I’ve even been on a couple of dates. My most important rule is, no work after 9 p.m.
Now that I’ve finally gotten organized, I can’t believe there were days when I actually missed working in an office!
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Conclusion
An entrepreneur is no ordinary small-business owner. Entrepreneurs are passionate innovators driven by creativity and curiosity. They’re visionaries who see opportunities that other people ignore. They’re risk-takers who know how to manage and profit from radical change. They’re explorers rather than settlers, always on the lookout for new lands.
These qualities are invaluable in launching a new business, but they may be less helpful when it comes to everyday tasks, which are often neither exciting nor creative. Although you don’t have to master all the day-to-day business chores your business requires, you must be able to delegate tasks, manage employees, negotiate contracts, foster teamwork and handle stress.
As important as inspiration and creativity are to entrepreneurial success, a growing business also needs a firm structure, clear policies and well-defined boundaries to survive and thrive. A strong personality and a clear vision can get a business up and running, but to achieve lasting growth, you need plans, rules and systems.

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Time Management Tips List all your activities and record how much time you spend on each one during a week. Identify wasted time and gaps that you could be using more efficiently. Make a list of tasks, starting with the most important and ending with the least, and cross them off as you do them. Learn to tell the difference between being busy and getting things done. On any given day, there are tasks that keep you busy without increasing your productivity. Always prioritize! Don’t try to do several things at once. Focusing on one task at a time, and working until it’s finished, will increase your productivity and reduce your frustration. Schedule breaks and personal time. When you know you have a set amount of time for yourself, you’ll find it easier to focus on work tasks. Studies show that people who take frequent, short breaks do more and better work than people who don’t. Disorganization is a huge time waster. File important papers immediately and keep your work areas clear of clutter. Set a timer or alarm clock for things like lunch, breaks and personal phone calls, so that you don’t drag them out too long.

| NxLeveL® TECH TIP BUSINESS RESOURCES AND THE WEB
Break and Exercise Apps Sitting at computers for long periods of time can cause serious health problems. In addition, studies show that people who take regular breaks and move around tend to be more productive than people who don’t. Although most of us know this, very few of us can remember to take regular breaks throughout the day. To address this problem, many developers offer free or low-cost apps that will interrupt your work and remind you to stretch, refocus your eyes and take a break. Some apps—such as StretchClock—will even give you exercise recommendations and instructions. Look for a customizable app that allows you to set break periods and lengths that make sense for you; it’s also best to use an app that covers or fades your screen to prevent you from continuing your work until break time is over.