How starting a small business helps build your future - IrishCentral

How starting a small business helps build your future - IrishCentral

How starting a small business helps build your future - IrishCentral

Posted: 01 Apr 2020 07:34 AM PDT

The future is something every student, parent, and working individual thinks about. Prices of necessities keep going higher, and the standard of living also goes along the ride. It cannot be helped that one has to think about where they will be in the next five to ten years. 

Perhaps, you are currently employed and you think that you have a stable job that you get to keep forever. Unfortunately, nothing is certain even with big companies and businesses. 

Last 2019, over 8,000 chain stores have closed in the US alone, and that's around 3,000 more than in 2018. That same year, auto company Ford announced 12,000 job cuts by 2020 to save about hundreds of millions in US dollars. With these pieces of information, you really have to wonder whether or not you are secure in your current position.  

Starting a small business

If the above statistics got your attention, you may start to think about what you can do to secure your and your family's future. Time and time again, one idea that proves to be helpful in starting your own small business. Perhaps, it is a big leap from the usual tasks you're used to doing. However, allowing yourself some quiet time to reflect on the advantages versus the cons will help you decide on taking a chance. 

Here are ways how starting a small business can help build your future:

Allows you to have full control over your life's direction

Starting a small business means you have every right to decide what it should be all about and who your target customers will be. It is also up to you to set your working hours and decide how much you want to earn. You can control the entire process without having to sacrifice anything in your life, thus helping you steer your life to a kind of future you've always wanted for you and your family.

Generates steady cash flow

Do you feel that your job is limiting your income potential?  The primary reason why employees strike out on their own and seek greener pastures is to earn more money than they are currently getting. When your salary is not enough to sustain a growing family, it is only natural to change careers or start a business of your own.

However, it would be best if you keep in mind that along with starting a small business means making smart financial decisions. You must first consider how much you want to earn and how much time you are willing to give. In addition, you may use tools or apps, such as Wave, that will help you manage and track your expenses, sales, and revenues.

When you are handling your business well, you are better assured of steady cash flow from your small venture. In time, you will have enough to live the life you want without worries.   

Shapes you to become an expert in your field

Starting a small business allows you to form the right questions, make the right moves, and improve your problem-solving skills. Suddenly, you know how to do your taxes, keep licenses updated, and follow regulations and laws related to your small business. The said skills can eventually make you an expert in your field. When you are an expert, you can approach problems in a systematic manner. 

Furthermore, you learn from various trials and errors, and you apply what you learn along the way. Yes, you may make mistakes, but you learn not to sulk over these failures; instead, you find solutions immediately so you can and move on and deal with other important matters.

Being consistent with your professional ways produces excellent results, as well as products or services that people want and need. Because of this, they eventually learn to trust you and your brand, thus gaining more loyal customers. The bottom line of all this is that your expertise is vital to the longevity of your business and its ability to continue earning revenues, thus giving you and your family better financial security in the long run.

Exposes you to more networking opportunities

By having a business, you become exposed to people who may have specific skills or enterprises that could be beneficial to the growth of your small venture. Other small business owners are also likely to contact you for a project or a collaboration. Small businesses who help each other have a more substantial chance to survive the competitive world. 

Here some of the advantages of networking for your small business:

Building connections leads to finding the right people with whom you can have collaborations or partnerships for a long time. These are like-minded people who share the same mission and goals as yours. Making such connections is also a way of making friends. When you are friends with the people you do business with, the business becomes more fun. It not only helps the growth of your business, but you also gain more positive people in your life who will be around for years to come, through thick and thin.

Networking gives you a chance to stand out and get noticed by the right people. When you offer your best products and services, they will, in turn, put out a good word for you. This way, you are able to gain more customers.

Being at the right place at the right time, such as events for entrepreneurs, allows you to meet other business people who are already veterans in their field. These individuals are fountains of information who may be able to share tips, tricks, insights, and constructive criticisms that you can apply to your own small business.

Surrounding yourself with people who encourage and empower you is also a confidence booster. They uplift and share positive messages that will inspire you to keep doing what you are doing. When you feel good about yourself and your business, you keep going and do anything that will benefit your thriving business.

Enables you to minimize loans and pay off debts

Are you having trouble making ends meet?  Do you often take small loans with hefty interest rates?  A small business can keep you from living off on loans, allowing you to live a debt-free life.

Managing your business well to keep you earning continuously will help you avoid signing contracts to get loans. You must also exercise self-discipline and control your spending habits, especially if being a spendthrift is the reason for your constant need for cash. 

Remember that it also takes money to make money, and your business needs it for operational costs. A fraction of what you earn is also for your family's needs, insurance, savings, and retirement. If you have debts, your business will also help you pay them all off, that is, if you learn to make sound financial decisions. 

Hones your creativity

Do you work nine to five in the office for a pencil-pushing position?  When you start a small business, you take on multiple roles. You are the one to brainstorm ideas, market your offerings, and make necessary changes to your products and services to make them more useful to your customers.

By having a small business, you get to improve your creativity. With this, you're able to come up with various solutions to different issues affecting your business. Creativity is also what enables you to move swiftly and effortlessly within a competitive environment. It inspires innovation and challenges your way of thinking. If you want your business to keep thriving, it is essential to make changes and adapt to them.

Moreover, a creative business person can accept multiple points of view. They can also reimagine concepts that will keep customers interested in their offerings.

You become a better decision-maker

Your decision-making skills are of the essence when you are managing a small business. Unlike large companies with processes and protocols, you are the sole driving force behind the management. Unfortunately, not all small business owners get the chance to receive training on how to handle business operations on their own. But, this doesn't mean that you can't help improve your decision-making skills.

By having a small business, you learn to identify a specific core problem and gather all the necessary information relevant to it. You learn to list down your options, as well as the pros and disadvantages of those choices. From there, you will be able to anticipate the consequences, both good and bad. Through this, you're able to become a better decision-maker, which will not only positively impact your business but also your life in general.

In conclusion...

For a regular employee who worries about the future, starting a small business is the way to go for several reasons. It allows you to have full control over where you want to go in your life and generates a steady cash flow, but only if you manage your finances well. It also enables you to build connections with like-minded people and veterans in the industry to which you belong, as well as shape you into an expert in your chosen field. Furthermore, by having a small business, you get to improve your creativity and decision-making skills. All these things contribute to better financial security and a more flourishing future for you and your family.

I can’t afford rent for my small business because of COVID-19. What can I do? - Marketplace

Posted: 01 Apr 2020 11:16 AM PDT

Over the last few weeks, most restaurants and brick-and-mortar stores have been doing a fraction of their normal business and, in many cases, no business at all. 

For nearly half of small businesses, those lost weeks could be enough to push them into the red. Enough to make it impossible to pay rent, which for many is due today for the first time since the start of the COVID-19 outbreak in the U.S. 

Even some big businesses say they can't afford rent. The Cheesecake Factory sent a letter to its landlords in mid-March informing them it would not be paying rent because the virus "inflicted a tremendous financial blow to our business."

That will likely be harder for small business owners to do.

"Small businesses clearly don't have the leverage that those big chains do," said Jared Nicholson, director of the Community Business Clinic at Northeastern University School of Law. "While the landlord is going to be willing to cut a deal with a huge customer, the tiny small businesses may not be able to get that kind of break."

If you're a small business owner who may not be able to afford rent this month or next, what can you do?

Check your lease

"Take a look through your lease and see if there's anything in there having to do with suspending rent obligations during an emergency, during a crisis, or during a time when the government forces your business to shut down," said Arthur Kats, director of the Microenterprise Project at Volunteers of Legal Service in New York. 

Your legal obligations, and your options, largely hinge on what's in your lease. In most cases, Nicholson said, "the answers in the lease, particularly in these commercial leases, are probably not going to be very favorable to the commercial tenants."

That is what Kats is finding so far with small business owners he's advising in New York. "The vast majority of our clients that we're seeing have no automatic right to suspend their rent obligations during this crisis," he said. 

Similarly, most insurance policies do not offer much protection under current circumstances.

"A lot of the policies that people would be thinking about is the business interruption insurance," Nicholson said. "A lot of times that requires physical damage to the property. Every policy is different, everyone has to look at their policy. But at first glance, a lot of these business interruption insurance policies aren't going to cover what's happening right now." 

It's also worth calling your lawyer for help deciphering your lease, strategizing about how to negotiate with your landlord, and figuring out what assistance programs you may be eligible for.

If you can't afford an attorney, there are legal services that do free consultations with small business owners, including small business clinics at many law schools, and non-profit organizations like the Microenterprise Project and Lawyers for Civil Rights, which has a project that matches small businesses with attorneys willing to work pro bono.

With shelter-in-place orders in effect across much of the country, many restaurants and businesses are struggling to stay afloat. (Mandel Ngan / AFP via Getty Images)

Call your landlord

If you've gone through your lease and found you're still on the hook for rent, the next step is to try to negotiate with your landlord.

"Call your landlord, say, 'For obvious reasons, I'm going through difficult times. I see a path where I can continue this lease, or I can continue this mortgage and support my business, and we can be long-term partners, but I do not have the cash to pay,'" said Michael Roth, a managing partner at the advisory firm Next Street.

Nicholson at Northeastern said they were getting reports of landlords willing to negotiate. For many landlords, it's mutually beneficial to work something out if it means a tenant's business survives until shelter-in-place orders are lifted.

If you do come to an agreement with your landlord to suspend or defer rent, or pay less, "write that agreement down," Kats said. "Make sure both parties sign it, even if it's by an email, talk to a lawyer, if you have the access, to make sure that that agreement is in writing and enforceable after all of this is over."

It's also helpful to go into a negotiation knowing the financial aid available to you.

"A really important one will be the federal stimulus funds, the loans available through the SBA," Nicholson said. "Rent is specifically made an acceptable use of the proceeds from the loan. And in some circumstances, that expenditure could be forgiven.

"If you call up your landlord and are interested in negotiating, my sense is one of the first questions they're going to be asking is: Do you have those stimulus funds? Is that something that we could work with?"

Apply to the new Paycheck Protection Program

Starting on Friday, small businesses will be able to apply for an emergency loan — much of which can be forgiven — using the new Paycheck Protection Program

The program, run by the Small Business Administration and the Treasury Department, came out of the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Small businesses and nonprofits with fewer than 500 employees can apply for a loan of up to $10 million. Any portion of the loan that goes toward payroll costs, rent, mortgage interest or utilities in the first eight weeks will be forgiven — as long as at least 75% was used for payroll.

This is a "phenomenal, phenomenal product and program that small businesses will be able to have access to," Roth said. But, he added, not everyone will be able to access the funds they need, at least not right away. 

"My biggest advice to any small business is get your documents in order now," Roth said. "Make sure that you have everything. If you have a banker, call them as soon as you can. You're not going to be able to reach them because they're going to be getting 10,000 calls, but just keep dialing, make sure that you are in close contact with them, and do whatever you can to be the first one to apply, because it's going to take awhile to get through."

You can also apply for an SBA Economic Injury Disaster Loan instead of or in addition to a PPP loan. Unlike PPP loans, though, EIDL are not eligible for forgiveness. If you've already applied for a disaster loan, you may be able to refinance and convert it into a PPP loan to have it forgiven.

Look for local funding sources

At city and state level, there are other sources of funding for small businesses. Philadelphia created a $60 million fund to offer loans to small businesses. Chicago just launched a $100 million fund. Other cities and states are making resources available, too. 

"Unfortunately, there isn't a one-stop shop where you can find this right now," Roth said. "But Google is your best friend. So are the small businesses on the block with you who you've worked with before. Ask them where they're getting funding from. Find your local resources."

And as with the Paycheck Protection Program, he added, act quickly: "The demand… has been out of control."

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The Small-Business Bailout Just Got a Lot Better - New York Magazine

Posted: 01 Apr 2020 01:16 PM PDT

Just business. Photo: David L. Ryan/The Boston Globe via Getty Images/2020 - The Boston Globe

When Congress passed a $349 billion bailout of American small businesses last week, the program appeared to suffer from three deficiencies.

First, the aid was already (at least) two weeks too late. The COVID-19 pandemic, and the social-distancing measures enacted to mitigate it, had already forced many small firms to cut staff by the time the Paycheck Protection Program made it to Donald Trump's desk. The bailout's belated passage made it imperative to get cash into business owners' hands as quickly as possible. And the fact that firms would ostensibly have to go through the Small Business Administration (SBA) — an underfunded and notoriously lethargic bureaucracy — raised concerns that only exceptionally well-capitalized independent companies (or pseudo-small businesses like chain restaurants) would survive the gap between the program's enactment and their receipt of funds.

Second, it was unclear whether the program would encourage firms to rehire staff they had previously cut. One of the policy's clear virtues was that (as its name suggests) it incentivizes firms to retain employees: Although structured as a loan program, so long as businesses do not lay off any staff or impose any pay cuts, the loans will be forgiven after two months (making them, in practice, conditional grants). But theoretically, a company might be able to subvert the program's intention by firing staff before applying for a loan.

Wall Street titans lobby for a cut of small business bailout - POLITICO

Posted: 01 Apr 2020 03:46 PM PDT

Sen. Elizabeth Warren (D-Mass.) and other progressives say private equity firms, which buy, sell and sometimes close companies in so-called leveraged buyouts, are harmful to workers and the economy — a theme that Warren hammered away at during her presidential campaign.

"Private equity has trillions of dollars of money waiting to be spent," said Marcus Stanley, policy director at Americans for Financial Reform. "So it takes real chutzpah for these Wall Street titans to now say they need government assistance."

The effort is the latest example of the lobbying juggernaut that has been sparked by the government as businesses seek to tap into trillions of dollars of federal aid intended to fend off an economic collapse caused by the coronavirus pandemic.

The target for Wall Street firms is the "Paycheck Protection Program," which lawmakers designed to ramp up the volume of government-guaranteed loans that banks can make available to businesses with fewer than 500 employees. A key feature of the loans is that they can be forgiven if a business keeps its workers.

Private equity and venture capital firms, which provide early funding for new companies to get off the ground, are worried that companies they own will be blocked from obtaining loans. That's because Small Business Administration rules calculate the aggregate number of employees for an enterprise seeking aid — meaning not just the individual small business but also other businesses in an investment firm's portfolio. That raises the risk that the smaller companies would breach the 500-employee threshold.

"Businesses across America are looking for support immediately in order to survive and continue to employ people," said Drew Maloney, who represents private equity industry titans such as Blackstone and the Carlyle Group as president and CEO of the American Investment Council. "It shouldn't matter if these companies are backed by investments from corporations, pension funds or others. We'll continue to work with the administration and Congress to request that federal programs support all businesses, regardless of ownership structure, and their workers."

Several other groups are joining the cause. The Institutional Limited Partners Association, which represents large investors in private equity funds, warned the Treasury Department and the SBA that prohibiting the businesses from acquiring the loans would severely cut into returns that help fund pensions, insurance policies and other investments that Americans rely upon. Its members include the the California Public Employees' Retirement System and the Dallas Police and Fire Pension System.

"We see no reason why being owned in a fund structure should result in these businesses having less access to the capital needed to keep their employees on the payroll," said Steve Nelson, the association's CEO.

It's a hometown concern for California Democrats like Pelosi and Rep. Ro Khanna. In their own letter to Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza, they said the restrictions threatened Bay Area and Silicon Valley tech startups that have equity investors.

"We urge you to issue guidance as expeditiously as possible and to afford our nation's startups access to a critical source of credit in the coming months," they said.

The National Venture Capital Association in a letter with dozens of groups representing startups said the companies would have to halt critical research and development projects, "setting back our country's competitiveness and delaying the creation of new tools to combat the Covid-19 pandemic."


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