"A plan? I don't even have a pla." **

Interesting article posted to BusinessWeek.com today:

"Rethinking How Women Build Businesses"

It's a worthy read (for both women and men). One interesting part that stood out:

"...and when you talk about entrepreneurship there is [usually] one way to start a business: Start with a business plan and raise money. It's a very structured approach. We talk about just starting and proving the concept first.
Women often start their businesses without a plan. Women are good at bootstrapping and figuring it out as they go along. "

I find this particularly interesting because if you've spoken with me or have read other parts of this blog, you know that I'm a huge supporter of having a business plan. I'm hoping that no one who read this said to themselves "Oh goodie! I can rent some space, get some product to sell and Boom! I'll have a business!" That's not the point.

The point is (and I've said this before, too) that a full-blown 60-page color-glossy super professional business plan is not needed for everyone who plans to start a business.

Something written down is needed. Something. Anything. The purpose is to solidify for yourself what you're doing - what is your business? what are your goals for the next year? expenses for the next year? where will your find your primary customers? Answering a few key questions like that is all many people really need to get going.

So get going!

[** title is a reference to one of the first episodes ever of "Friends". Kudos to anyone who caught that. :) ]

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Starting with nothing...

Last night I was asked to give a short presentation on my business as part of a panel of "Women In Business." The following is a short except:

When I started The Pot & Bead I started from nothing.

What I didn't have:

• Formal business background - I'm an engineer. I don't have an MBA, I had never taken a business class and I didn't have any prior experience managing a business or a retail store. My experience in retail was pretty limited to working the cash register at a supermarket when I was in high school.
• Hidden stash of cash - I didn't start my business with any savings. In fact, I had a bit of debt (house, car, student loans, credit cards)
• Experience with the product - Did I mention I was an engineer? I'm not an artist, I didn't know about clay or painting or anything related.

What I did have:

• Books on how to write business plans - A business plan was necessary to acquire financing for the business. There are many good books out there on how to write a business plan and what to put in it.
• Ideas - Opening up a paint your own pottery studio wasn't my first idea or thought. I went through several, researching, learning, and trying to write a business plan. The idea for The Pot & Bead was the one that gelled.
• Resources - There are a wealth of resources out there for anyone who wants to start a business. I am particularly fond of my local Small Business Development Center that holds seminars on starting a business. They also will review your business plan.
• Determination - This, of course, was the key. I spent a great deal of time learning, researching and planning. I wanted to be in business for myself. I was determined to make it happen.

And I did. :) If you have a desire and determination, you can do it, too.

A good business begins with a good plan

I receive a lot emails from people who read this blog and tell me that they are almost ready to start their business, just starting to think about it or they are someplace in between. So today, I thought we'd discuss that monster of a task that needs to get done at the very, very beginning: Your business plan.

If you've written your business plan already, fantastic!

If you haven't, why not? What's holding you back?

Is it that you think you lack time? Well, if you can't make the time to work on a business plan, then you're not going to have the time to plan the business. :) Carve out the time. It might 30 minutes before bed. Or maybe set the alarm to wake up 30 minutes earlier in the morning every day until it's done.

Is it that you don't know the first thing about business plans? That's an easy fix... there are dozens of books out there on business plans. If you are truly starting from scratch, then start with a book such as "Business plans for dummies" (I have it, it's one that I used when writing my business plan).

Is it that you started, but it's not coming together in the way you hoped? Ah ha! This is most interesting. This happened to me quite a bit when writing my business planS. Yes, that's plans with an "S". Before starting my paint your own pottery studio, I had thought of other kinds of business ideas I'd like to try. When I had an idea, I would start writing the plan. If it didn't come together, it was because it really wasn't right. It wasn't right for me at that time. For example, while lots of folks have businesses they run buying properties and acting as landlord or flipping them, it just wasn't coming together for me when I started outlining and writing the plan. It wasn't right. I moved on and went through about 6 different ideas before thinking about my retail store. The business plan for The Pot and Bead just fell into place so easily for me at that time... that's how I knew it was right.

Here is an interesting resource for you: For a while, I ran a second business as a consultant helping people get their business plans together. I'm not really a consultant at heart, so that business, Now Plan This, only lasted a year or so. I shut it down, but I still have one of the tools I created. It's a business plan questionnaire that I'm now giving out for free:

Download the PDF business questionnaire.

It's similar to a business plan template, but instead of headings of sections to fill in, it asks the question for you to answer.

The theory is, if you're starting a business, you darn tootin' should be able to answer these questions. If you can't answer the questions, that might be a red flag before you get started in really opening the business. Note: since Now Plan This no longer exists, this is not a form to submit back to me or anyone else. It's provided free for your reference. However, if you have a specific question, please don't hesitate to ask.

More about the early days of getting The Pot and Bead into existence can be found in my book: Cute Little Store.

Thanks for reading!

What does it cost to run a retail store?

I get asked this question by people looking to start or buy a retail store... what are the costs involved? Now, I could go into a whole thesis on the cost on your family, time and sanity, but I think the folks are asking about "the green". How much moola, greenbacks... etc.

Here's a list of the costs involved in running the store. It's related to my specific business of paint-your-own-pottery, of course, but the list is applicable to retail in general. In planning your business, if you believe that the item in the list is relevant, then you'll need to do a little research to determine what the actual $$ might be. Publishing my specific numbers would just not be kosher, and could be misleading if you're in a different area of retail or a wildly different location. If you have questions, aren't sure if an item is applicable, or need help, send me an email or leave a comment.

The assumption here is that this list would be used in the planning stages of a business. If you're already in business, and have something to add, please leave a comment!

The Basics (i.e., things you can't do without):
Rent - plus CAM or triple net; plus real estate taxes that may get passed from landlord to you; plus association fees
Payroll - which may or may not include yourself
Taxes - sales tax, payroll taxes, property taxes, unemployment taxes, etc. This will vary wildly based on your location. Call an accountant to get a good understanding of your tax liability.
Inventory replenishment
Utilities - electric, gas, water, telephone, internet, trash removal (if not covered in CAM by landlord). I also consider having a website a necessity, so add in the cost to maintain the site and your URL.
Insurance - business insurance, works comp, etc. Give your insurance agent a call and get their opinion on what you might need. Note that a lot of what the agent comes up with might be optional (one option I had was to insure the cash in our register - that's not necessarily covered in case of a break-in)
Credit card processing fees - I'm not sure if there's any business starting out today that can consider not accepting credit cards.
Advertising - many newspapers publish their basic advertising costs online
Printing - flyers, brochures, forms, etc
Office supply replenishment - for us, this is everything from computer printer ink and paper to pens to sticky notes to new sets of dry erase markers every now and then
Cleaning supply replenishment - trash bags, floor cleaner, window cleaner, etc. And my employees have become very fond of swiffer dusters and swiffer wet jet .
Other supply replenishment - toilet paper, hand soap, paper towels, etc Shopping bags could go in this list, too.

"Optional" things that we do have at The Pot and Bead:
Security - if you choose to have a system such as ADT or Brinks
Bottled water delivery - a little nicety for my employees and customers. Drinking lots of water is healthy. :)
Muzak - Did you know that it's illegal and you are subject to fines by playing CDs or even the radio in a public place like your store? Having a service like Muzak (XM offers a service for businesses, too) takes care of all that and sounds great.
Accountant - I choose to have an accountant prepare my taxes each month rather then wade through all the papers I don't understand myself.
We also use a couple online services that go into the cost of running the business. Constant Contact ( www.constantcontact.com ) is for managing and sending out e-mail newsletters to existing customers. The best thing I've found for clocking employees in/out is an online service called Time Clock Online ( www.timeclockonline.com ).

Lastly... if you are starting or running your business on any type of credit (i.e., bank loan, credit cards, etc) don't forget to take into account the monthly payments you'll be making, including interest.

These are just the recurring costs. This does not take into account any cost associated with getting the doors open like deposits, fixtures, initial inventory costs and advertising costs. It also doesn't take into account the random unexpected costs that come up from time to time usually when something breaks (the toilet, the water heater, chairs, etc etc).

You can read more about some of my specific money issues in my book, Cute Little Store.

Any questions? I have to go pay a bunch of bills now...

Checklist for opening a retail store...

I've had many requests for this kind of a list, so here goes. It's based on my experience and anecdotes of other small business owners I know. If you've had experience in this area, please feel free to comment or add your own ideas.

Here's the checklist. It's broken down roughly into 3 sections, and can be followed in the order presented.

1 - Research and Planning
1a) Create a Business Plan. This is a must. It does not have to be a 50-page polished fancy document. It can be as simple as listing your main products and services, your mission and philosophy and some other details. But it absolutely does need to exist.
1b) Create a Financial plan. This is also a must. It can be included as part of your business plan. You have to have an idea of what your expenses will be and a conservative guesstimate of what your income will be. This can't be in your head, it needs to be written down.
1c) Create a Marketing Plan. This can also be part of your business plan. How are potential customers going to know about your business when you start/open? At a minimum, this will be a simple list of things you will do (i.e., obtain a website, attend related networking events, post flyers around town, etc)

2 - Money and Space
2a) Find your space and secure a lease. If you're a retail store, by definition, you'll need space. Most landlords will also require a business plan, by the way.
2b) Secure funding. You might have money in the bank, or you might need a loan. By the time you've completed steps 1 and 1a, you'll know how much you'll need to get through the first 1-2 years. Oh... if you need to seek funding through a bank loan, most will require a business plan. Good thing you've already completed that step.

3 - Get ready to open
3a) Design your store. This might have been done as part of securing your lease. Some landlords will require that you submit a "site plan" for your store during the leasing process. But now you'll need to obtain all your furniture and fixtures, point of sale system, extra lighting and anything else you need.
3b) Purchase inventory. Chances are you'll have one or more regular suppliers so you'll need to arrange with them your first and probably largest shipment ever.
3c) Create operational procedures. This was one of the last things I did before opening, and my procedures are always in need of tweaking, but it was good to know what to do when we opened and was good to have something ready for when I hired my first employees.
3d) Hire some employees. I opened The Pot and Bead knowing that I wasn't going to be in the store at all times, so I started the hiring process right away. Lots of businesses, if they can afford to, hire and train some key employees before opening their doors. You'll need to decide for yourself if this is right for your business.

Now, before I opened, I had a "To-Do" checklist that was more detailed than above and was very specific to my situation - the above list is a simple overview, not meant to be 100% comprehensive. I encourage you to take this as a starting point, and expand each item to create your own detailed list. (Note: I'm in the process of writing the sequel to Cute Little Store and am considering including a more detailed checklist there.)

If you're still thinking about starting a retail business and haven't read my book yet, pick up a copy of Cute Little Store today. It's an easy read and will give you a feel for what it's like to leave the safety of the career you've been in for so long and try something else. I made a lot of mistakes in those first couple of years, which I write about, so you don't have to (make those mistakes, that is).

:)