We're in an economic downturn and jobs are getting cut everywhere as businesses tighten their belts and get ready for rough weather ahead. Newspapers are laying off staff, car makers are slowing down SUV and pickup truck production. It's the same wherever you look. But it still seems different somehow when it happens to Starbucks. The company announced that it's going to close 600 company-owned outlets across the United States. (This will eliminate about 12,000 jobs by the way. If you're one of those, you already know what this means to you.)

The news seems to have shocked a nation accustomed to layoffs and soaring food prices and $4.00 gas. The company's explosive growth has become a running joke in America. The Onion ran an article about Starbucks setting up outlets inside other Starbucks. In the dog-show mockumentary Best In Show, a couple relates how they met when she was in one Starbucks and noticed him in the Starbucks across the street. Whether you laughed or gnashed your teeth over it, the expansion of Starbucks into every available open space seemed a given.

Now that the company is seeing sales fall, no doubt some people will applaud the comeuppance of a corporate giant that has ground community coffee shops and culture between its massive corporate gears. These people should keep in mind that the company has more than 15,000 stores worldwide. You're still going to be within line of sight of a Starbucks from pretty much every point on earth.

But people who applaud the decline of Starbucks should consider that Starbucks is no Wal-Mart. Its growth wasn't nearly as destructive to the local small business coffee shop market as people think. In fact, it appears to have been the best thing that ever happened to that market. Last year, Slate ran a piece that examined what effect Starbucks had on mom and pop shops and found that their business actually increased when a Starbucks moved in across the street. Dramatically.

It wasn't that Starbucks wasn't trying to be the 800 lb. corporate gorilla. In the Slate piece the owner of a Los Angeles chain of coffee shops reported that Starbucks showed up one day, tried to buy him out cheap, and said if he didn't take their deal, they'd just come in anyway, put stores right next to all of his, and squash him like a bug.

That'll put the fear of God into pretty much anyone, so the owner called a friend, who happened to run the Seattle's Best Coffee chain. The friend reassured him this was going to be the best thing that ever happened to him, and indeed it was. Sales increased so much that he started following Starbucks around and putting in new stores next to theirs.

Why did this happen? Apparently because Starbucks increases the size of the market for premium coffee. And those new coffee drinkers sooner or later move beyond Starbucks to see what other shops might have to offer.

The key thing to keep in mind about Starbucks is that coffee used to cost a nickel. It came in a chipped white cup served in a diner somewhere by an old lady in a weird pink dress, and she'd keep refilling that cup for you forever. Coffee used to be a loss leader. It was largely Starbucks that took specialty coffees like lattes and espresso out of little ethnic cafes and introduced them to mainstream America. It was Starbucks that created the idea that a cup of coffee came with a bunch of other stuff in it, and was worth three bucks or more.

Once that idea was ingrained, it wasn't just Starbucks that profited from it. The rising tide Starbucks created raised all boats. The restaurant business has always been absurdly risky. Well over half of new restaurants fail in the first three years. The failure rate for coffee shops? Ten percent.

That's because, especially at Starbucks-style pricing, the markup on coffee is so high. It's a simple business to run and it's hard to fail. A lot of people who were squeezed out of the more traditional job market over the last couple decades and went "self-employed" did it by opening up coffee shops.

So if this is the end of the golden age of coffee, we've got a lot more to worry about than Starbucks. If hard times are making Americans rethink the Iced Frappucino, if they're going to go back to a cheap cup of joe to save money, then a lot of small businesses are going to suffer. Next time you're walking through your nearest commercial district, try counting the coffee shops. Then imagine them all closing. It should be pretty sobering, even if you don't like coffee.

If you cook, why not sell your lovely cakes, biscuits, pies and so on to friends and family, and on stalls at fairs. Taking a risk with a new venture is always a big step, but the rewards of setting up a small business can change your life forever.

Set yourself up as a party organizer. Local pubs and bars might let you arrange barbeque parties, for example, on their premises for a commission. Imagine working hours to suit and the opportunity to organize your own timetable.

Offer your services as a babysitter, childminder, or set up an agency. Success however needs a firm foundation, so before you work with children, make sure you've obtained a criminal records certificate. Some kinds of business, such as child minders, require that you hold a local authority license.

If you know the music scene, promote or manage local bands, organizing gigs at local bars and clubs. Set out exactly what you want to do, who your target customers and competitors are, how you'll promote your clients.

If you're creative, make money designing your own beads and jewellery - sell on stalls, and the net. Research what your competitors call themselves and think up something better. Design your own belts, bags and accessories or import, and sell at fairs, and through your website. Consider renting your own premises. Escaping your tired old day job and finding your own perfect premises is half the fun of setting up a new business on your own.

Use your beauty skills top set up a training school, with courses for both professionals and amateurs. Check if you need certain qualifications to trade. Also design and market your own beauty products and offer services through a variety of outlets. Be aware many businesses and self-employed professionals these days need to be able to show that they have insurance, so check your options.

Pay those mounting bills by offering accommodation in your home, either by letting a room or attract tourists with bed and breakfast. Depending on the range of services you offer, you should consider taking out public liability insurance and professional indemnity insurance.

Sell the produce you make from soft fruits collected wild and fresh fruit and vegetables off your allotment. If you're working from home, such as cooking for profit, you may need to pay business rates and to obtain planning permission from your local authority, especially if clients or employees will be visiting the property.

Look for premises somewhere that you can afford for a bicycle repair/dealership and turn your hobby into an income. Stay close to your customer base and make sure you comply with all the relevant health and safety regulations.

1. Accredited Training/adult education - run training courses with a certificate at the end, training in the skills you and your associates already have.
2. Activity Holidays - sell packages to adults, families
3. Advanced Driving Courses - set up a weekend school
4. Advertising Boards - secure outside/on buildings
5. Advertisers Directory - companies pay for entries
6. Advertising Revenue - sell advertising in your self-published books and other publications
7. Aerial Photos - sell to people in the area
8. Aerobics Classes - hire local halls
9. After Dinner Speaking- promote yourself as a speaker, get an agent
10. Afternoon Teas - hold every week or daily at a hired venue
11. After School Club - parents pay a fee
12. Album (music)- artists contribute songs, or publish your own
13. Allotments - rent out your land as allotment space, or rent from the council and sell your produce
14. Alternative Health - train and offer skills from a base or mobile business
15. Amateur Cabaret - develop your act and tour pubs and clubs
16. Animal Boarding - look after pets while their owners are away
17. Animal Portraits - sell to owners, either artwork or photography
18. Antiques/auctions/dealing - if you have the knowledge, why not use it and trade
19. Aquarium- fish breeding. Sell to trade and the public.
20. Apartment Agency - charge a fee for locating accommodation and manging property for clients
21. Appliance Repairs - use your DIY skills for an extra part time income
22. Art - your Art Exhibition - sell your work and/or that of others
23. Article Writing - write for magazines, the internet and newspapers
24. Artificial Flowers - make and sell
25. Auto Jumble Sale - ask a farmer if you can borrow a field
26. Au Pair Agency - charge a fee for locating and managing au pairs
27. Baby Portraits - art or photographs for parents and grandparents
28. Badges - for children at events, or as fashion accessories
29. Baked Potatoes - sell at events, or build a local round
30. Balloons - novelty balloons, for corporate and private parties and so on

As a start up company, it defines your business. It outlines in specific and clear details every aspect of your business. A business plan is essential to obtaining financing for your company whether it is for starting a business, obtaining additional financing, or applying for a grant. External funding requires an up to date business plan that includes both an Income Statement with the Profit and Loss statement.

If you are looking to purchase a business, a business plan evaluates the future success of the business. Writing a formal business plan, you are evaluating the business' past and projecting future success of the business. It shows the lender your capacity to repay.

A business plan is part of a process. It's about your company and the desired results. It defines goals and objectives, outlining the actions necessary to obtain them. Review your business plan regularly to determine results, follow up and new planning. New services, products or future expansion of your business are evaluated, and details who, what, when, where, and how you expect to achieve them.

There are several software programs, which can help write a formal business plan or there are companies who will do the work for you. Preferably, you can write it yourself. Writing your own business plan takes research and time.

SCORE, Counselors to America's Small Businesses has many how-to and business tools online at Score. They offer free online mentoring services and templates for business plans; The Small Business Association at Sba has a wealth of information on writing your business plan. There is an online interactive Business Planner at Canada Business which is a question and answer format.

Your business plan needs to be simple, realistic, and complete or it will be difficult to implement. It should be easy to understand and act on. Objectives should be concrete and measurable with specific actions and dates. Sales goals, budgets, milestones, start and completion dates, who is going to do what, and expected costs of each. Your business plan also needs to include exit strategies. Exit strategies detail backup plans in the event goals and objectives are not obtainable as planned.

Writing a business plan is about committing to future action. The time spent researching and writing a plan for your company will lead your business in the direction you want it to go.

Take the example of an individual employed at an emerging high tech company in the Digital Resource Management (DRM) application space. Having experienced recent distinguished successes, the employee roster has grown from five people only three years ago working in a local office, to over one hundred working worldwide in every time zone. In the early years, positive progress was common, easily repeatable, and expected, as competition was fairly light. Because successes were easy to recognize and achieve the expectation of always reporting success was soon recognized as a corporate standard.

As the application matured and grew in complexity, there were more factors to account for in coding and testing, thus making it more difficult to determine and report positive progress. In this workplace, there is a condition that can only be described as behavior of "The Three Monkeys". For the uninitiated, The Three Monkeys is a reference to a common Japanese legend depicted by three monkeys in which one is covering it's eyes, another it's mouth, and the last covering it's ears. The usual understandings of the poses are: "See no evil, speak no evil, and hear no evil". The basis of the legend stems from the Koshin belief of everyone has three monkeys which refuse to speak the misdeeds of their owner. In this modern instance, the behavior can be described as "I will not speak if I have negative results to report" An example of this would be, if a person had to make a report of a project not progressing as expected, they would do their level best not to say anything. Even in the circumstance of if the report were to be neutral, the subject would still be reluctant to make the report. Only in the event of being able to produce a positive report, would they feel comfortable reporting status. The subjects studied were actually observed planning a series of "ghost" lunches in order to avoid being able to be scheduled into a meeting where they would have no choice to report negative status.

There is a noted atmosphere of ensuring positive outcomes regardless if the outcome was a stated objective. In other words, if the team were focused on creating a specific application, and for whatever reason had not made appropriate progress, the team lead would chose not to report on the progress, but instead would insist on reporting positive progress on another similar, but unrelated project, even if they were not supposed to working on the similar project. This unspoken tribal law of "speak of good, not bad” permeates the entire organization at every level. This theory of operation comes from surveying the subjects behavior over the past eleven months, following their individual progress (in the form of daily status reports), and comparing the weekly reports, which are supposed to summarize past weekly activity. The behavior is so pervasive, even in the circumstance where this condition was brought up in a departmental meeting, the subject still insisted on delivering the incorrect positive information, rather than what was written in the daily reports.

The negative business outcomes resulting from this behavior are people being required to work unexpected extra shifts or project timelines being stretched due to "unforeseen" issues appearing near project end. This is turn causes employees trust in project reports (and the managers who gather them) to decline, which goes further to make people question the ability of the company to operate in a fiscally responsible manner. The faith placed in the company processes to produce applications is shaken from the employee to the end-user.

When first exposed to this conduct with earlier companies, it was thought this behavior was an abnormality, a misperception on behalf of the author, further observation (and job opportunities with other companies) proved the facts otherwise. In the normal role of a single department manager (Software Quality Assurance), only having insight to one perspective of a multi-department effort, this perception could easily have been arrived at mistakenly. However, as the authority to govern other departments (Engineering and Customer Care) was granted to the individual, it was noted through documented reports the noted behavior was accurate, and not subject to misinterpretation. The status being reported in the weekly summaries did not reflect the status noted in the daily reports.

It appears the initial culture of not reporting negative status while the company was small had become an expected behavior, regardless of the true status, promoting the conduct as a corporate norm. This learned behavior of confused communications was subtlety passed on to new hires during corporate indoctrination. Among senior employees, the conduct is so well accepted it is not even noticed. People recently hired are quick to adopt the process in an attitude of wishing to fit into the corporate structure, seeking acceptance from their new co-workers. If the new hires displayed any compunction about the negative behavior, they would quickly overcome any negative feelings by stating this is the way they feel they are expected to behave.

A casual survey was performed by comparing six months of daily reports to the weekly summaries provided by the random individuals, in almost every example, the weekly report did not align to the daily status, where if there were issues reported throughout the week, the issues or culmination of them would not be reported in the weekly report. It was further noted, in the instance of ad hoc status reporting, the person under examination would rather defer to the positive portions of a report rather than the negative. This over riding air of “speak no evil” sets up the expectation one should never report a negative status. The unspoken pressure to report only positive progress was confirmed through formal and confidential interviews with persons within and without the QA department. Even though the people given the task of training were aware of the proper process, they still incorrectly informed the new employees of the reporting posture. In another instance, a Software Engineer would request a Quality Assurance Engineer to back up the erroneous claims of progress. This behavior was not limited to the mentioned groups. The conduct was noted throughout the organization from every level: employee to employee, manager to employee, and vice-president to manager. This manner of reporting was endemic from the junior to the most senior company officer.

To those not exposed to companies experiencing this stage of evolution, it is easy to misinterpret the described behavior as abnormal. I this conduct were to be noticed in an established company, it would be abnormal, because the larger company should have already established and communicated a truthful standard for those reporting progress, regardless if the progress were negative or positive. It is only in companies at this particular stage of growth would this behavior be considered normal. Having worked extensively with companies in this stage of growth, it is in the author's experience this type of entrenchment behavior is common amongst small companies experiencing rapid growth. If one were to analyze behavior patterns of burgeoning companies, this method of poor communication is not indicative of abnormal conduct. If anything, it would be noticed this manner of acceptance to an implied standard is considered common to companies in this state of growth. From this standard, the tribal communication standard is then actually considered normal. The perspective of abnormal is then shifted to one of predictable normal behavior of corporations at this stage of growth. The company's challenge at this point is to instill proper motivations within the working groups to report actual status, rather than what the reporters managers expect to hear.

In conclusion, if one were to critically observe the reporting style of the mentioned company, it would be easy to draw the conclusion there are abnormal behaviors being practiced and promoted, which are to the detriment of the company. The truth of the matter is while the ineffective conduct is indeed a tripping point; it is a common factor for a company in this stage of growth. The challenge presented to the company at this stage of evolution is to overcome the behavior by readdressing the need to provide actual status reports regardless of negative or positive indicators. Removing the stigma of reporting negative status by reassuring all levels of workers true status is more important than preventing conflict. A concise status will allow all aspects of the company to progress towards a predictable production environment, which is a benefit which will be appreciated not only by employees, but also the clients the employees serve, as ultimately, precise and timely reporting within the organization will benefit the customers, as products will be delivered when they are expected.

Your Personal Finances

Personal Credit

Regardless if you are a Sole Proprietor, Corporation, LLC, etc, the bank will want to look at your personal credit. Pull your credit report and order your credit scores as well. If your credit scores are 650 or under, then it may be best to do some clean-up of your personal credit before continuing. Or, you may include a letter explaining why these occurrences happened and why it won't happen again.

Personal Income

The lenders will want to know where your personal income will come from while you're operating your business. Will your sole income come from the new business or will you work full or part-time while starting your business? The lenders will also want to know how you plan to transition from working for someone else to being self-employed, if that is your plan.

Personal Assets

The assets you own are very important as they may be looked at as potential collateral for the loan. Some companies can provide a business equity line of credit, which will use equity in your home as collateral, while establishing credit in the business name. The lenders also see assets as potential sources of cash to cover you in rough times.

Personal Liabilities

This is how much debt you owe, including mortgages, credit cards, loans, etc. Get your debt level down. In regards to credit card debt, a good rule of thumb is to have no more than one-third of your available credit outstanding.

The Business Plan

This is the time to really sell yourself and your business. Your plan must be complete and presented very professionally. The executive summary should comprise the first few pages and should be very professional. Recruit someone to help you if you need to. The Small Business Administration (SBA) has some sample business plans that are very helpful.

Be sure to detail what product or service the business will provide and what sets your business apart from competing businesses, how will the business make a profit and how much profit is expected per transaction, how many transactions do you expect per month. Show any demographic information you may have about the area you'll be providing services to. (How much traffic will pass by your location? How much demand is there for your product/service? What is your target audience and what percentage of the population will your business serve?)

When projecting the revenue, profits and costs for the company, you'll want to think at least 24 to 36 months ahead and break everything down on a monthly basis. Include your payment schedules for your lease, utility costs, loan repayment, etc. Also include a contingency plan detailing how you will handle any shortfalls that may occur for a month or longer.

Experience

Another piece of your business plan should include your experience level. How familiar are you with the industry you've chosen? Do you have previous ownership or management experience? Your chances are better if you have some experience working the industry you've chosen. If you have no related experience, add working skills that you have gained that apply to the business.

SBA Myths

The SBA provides loans to small businesses: False.

The SBA works as a guarantor of loans made by other banking institutions. If you contact their offices, they will simply offer advice on finding a lender.

Here is an example of one way they will help a small business: If you go to a bank requesting $25,000, the bank will see if they can approve the full loan amount for you. If not, they will seek to qualify you for SBA backing. One possible scenario is that the bank will cover 50% of the loan, while the SBA acts as guarantor on 40% of the loan, and you will be responsible for coming up with 10%.

The SBA will help if you have bad credit: False.

The credit requirements for SBA eligibility are the same as most banking institutions. The SBA is simply there to assist with new businesses or young businesses with very little time established.

Other Loan Options

If you are unable to obtain a business loan, be sure to ask why they declined you. Their response may provide hints to changes that can be made to your business plan. Take a step back and see what adjustments you can make, and then try another lender. Try applying at large banks and at small community banks.

If you are unable to get approved for a business loan after several attempts, you may wish to consider other loan options. Using a personal loan, such as a home equity line or loan may be helpful to get you started. Once your business is more established, then return to the lenders and show them what your business is doing.

One of the very first things you will need to understand is double entry accounting. Most accounting software packages will allow you to choose either single or double entry accounting as a means of keeping track of your books. I would highly recommend double entry accounting for a number of reasons but the main one is this: it makes it much easier to keep you from making mistakes, particularly when you start out.

There is no mystical means of setting up your books, or keeping your records. You do not need to rely on guesswork or a magic eight-ball. The theory behind double entry accounting is basically that for every debit you record, there must be a corresponding credit. If you add one to the other, it should always equal zero. This is a self-correcting system that prevents you from writing checks that have no offset or paying bills without keeping track.

If you write out a check for office supplies at the store, the record for the check would be a debit from the checking account, and the corresponding credit would fall under your office supplies expense account. If you receive a bill, the debit would fall under the accounts payable liability account, and the credit would be either under the inventory asset account, if the bill is for goods received for sale, or the expense account covering the bill, if it's office supplies, freight, utilities, rent, telephone or whatever account category the bill falls into. It is just that simple. It means that as you reconcile your bank statement to your checking account, you can also reference that same transaction in the expense accounts it relates to, or for the inventory you have on hand.

So, having all that information listed above, it will make it much easier to read your reports on expense accounts, your standard profit and loss statement, and your inventory on hand, because now you know how those things were entered, and what they mean. Your expense account reports show the individual amounts that have been spent and the total over a given time period.

Your standard profit and loss statement shows all of your income or gross profit over a specific period of time, and details your expenses over that same time period. After subtracting them out, what remains is your net profit. Your inventory on hand will show you the number of items you have on hand for resale, the average cost of those items, and the total amount that those items cost or are worth.

Being able to do all of these things, or at the very least to understand them will help you to run your business more efficiently. It will also help you to understand what is going on with your finances, budget more effectively and reduce the amount of fraud or shrinkage that occurs. This basic and elementary understanding of bookkeeping and accounting will help everything move more smoothly as you pursue your goals for growth and gain. It does not have to be complicated.

Why not use the power of your local Chamber of Commerce to market your business? If you haven't discovered this marketing venue, you may be missing out on an effective and low cost marketing technique.

How can the Chamber of Commerce help you market your product or service? The Chambers of Commerce in most areas holds regular meetings where members can network. You'll be able to exchange business cards and promote your products in a relaxing and stress free environment to other entrepreneurs. These meetings are usually heavily attended and give you an opportunity to interact with other like minded entrepreneurs.

When you attend these meetings, you should take along a healthy supply of business cards and literature about your business to give to other interested business owners. Be prepared to describe your product and service to your fellow entrepreneurs at the Chamber of Commerce meetings.. It will be important to let them know how what you have to offer can help them achieve their own business and personal goals.

Another benefit of joining the Chamber of Commerce in your area is you'll get a list of members along with their contact information. This can come in handy if you want to approach particular members who might be interesting in doing a joint venture or a co-marketing arrangement with you. Look for businesses that are complimentary with what you're offering and see if you can work out a plan for mutual promotion.

Your local Chamber of Commerce may also offer free conference space where you can host your own business meetings. If you run a small business out of your home, this gives your business a more professional look. Some other benefits of membership include the opportunity to get health insurance at a discount, discounted workman's comp insurance, as well as the chance to attend specialty seminars on building a small business. Services offered by a particular Chamber of Commerce will vary by location.

Your local Chamber of Commerce can be a great, low cost marketing tool for your small business. Why not give your local Chamber a call and see what they have to offer

Wouldn't it be great if you could market your business while driving in your car around during the day? It's easier than you think. Why not place a domain plate on the back of your car? A domain plate is a simple sign that advertises the name of your business, your domain name, contact information or anything else you want to say about your business. The domain plate is attached to the back of your car using automotive adhesive tape. Your car becomes a low cost, moving advertisement for your small business.

Using this cheap advertising technique, information about your small business may be seen by hundreds or even thousands of people every day. All for an initial investment of under $50.00.

To make this technique effective, you should have a short and memorable business name as well as a descriptive dot com domain name. If it can't be short, at least make sure it's clever and easy to remember. People are innately curious. If they're parked behind you at a traffic light, their eyes will naturally wonder to the back of your car where they'll view your domain name. Because they're inquisitive or they genuinely need your service, they'll access your website when they get home.

These unique car signs are working for you all the time whether you're driving or parked in front of your house. Be sure to park your car in an obvious place so you can maximize the number of eyes who see it.

How do you track how well your car advertising is performing? To track the effectiveness of this low cost advertising method, offer a discount to customers if they mention your car sign when they place their order on your website or by phone.

If you're serious about growing your business and you need low cost marketing ideas, find out how effective car advertising can be for you.

To increase your chance for success, take the time up front to explore and evaluate your business and personal goals. Then use this information to build a comprehensive and well-thought-out business plan that will help you reach these goals.

The process of developing a business plan will help you think through some important issues that you may not have considered yet. Your plan will become a valuable tool as you set out to raise money for your business. It should also provide milestones to gauge your success.

1. Getting started: Before starting out, list your reasons for wanting to go into business. Some of the most common reasons for starting a business are:
   • You want to be your own boss.
     • You want financial independence.
     • You want creative freedom.
     • You want to fully use your skills and knowledge.
2. Next you need to determine what business is "right for you." Ask yourself these questions:
   • What do I like to do with my time?
     • What technical skills have I learned or developed?
     • What do others say I am good at?
     • Will I have the support of my family?
     • How much time do I have to run a successful business?
     • Do I have any hobbies or interests that are marketable?
3. Then you should identify the niche your business will fill. Conduct the necessary research to answer these questions:
   • What business am I interested in starting?
     • What services or products will I sell?
     • Is my idea practical, and will it fill a need?
     • What is my competition?
     • What is my business's advantage over existing firms?
     • Can I deliver a better quality service?
     • Can I create a demand for my business?
4. The final step before developing your plan is the pre-business checklist. You should answer these questions:
   • What skills and experience do I bring to the business?
     • What will be my legal structure?
     • How will my company's business records be maintained?
     • What insurance coverage will be needed?
     • What equipment or supplies will I need?
     • How will I compensate myself?
     • What are my resources?
     • What financing will I need?
     • Where will my business be located?
     • What will I name my business?

Your answers will help you create a focused, well-researched business plan. That should serve as a blueprint. It should detail how the business will be operated, managed and capitalized.

One of the most important cornerstones of starting a business is the business plan. The Small Business Association offers you a tutorial on preparing a solid plan with all its essential ingredients. Be sure to review and peruse this website.

Once you have completed your business plan, review it with a friend or business associate. When you feel comfortable with the content and structure, make an appointment to review and discuss it with your banker. The business plan is a flexible document that should change as your business grows.