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How to Start a Business From Scratch

Posted: 28 Aug 2019 09:00 AM PDT

Many people would love to start a business, but they often feel like it's an insurmountable challenge. After all, if you don't have any capital and there are no investors clawing at your doorstep to dump funding into your idea, you might be asking yourself how you would even get started. 

While it's true that you might not be able to launch a cutting-edge tech startup without some serious funding behind you, that doesn't mean business ownership or entrepreneurship is out of your reach. Just think about all the incredible entrepreneurial stories that start with "I came to this country with only $50 in my pocket … and now I'm a billionaire!"

Businesses come in all shapes and sizes, and you truly don't need a huge budget to start one. A smart idea and a small budget can go a long way in building a bootstrapped business from the ground up, but there are a few things to keep in mind that will help you get where you want to be.

There are four fundamentals of starting a business:

  1. Build a team of smart, adaptable people who are in it to win it with you.

  2. Keep your overhead as low as possible.

  3. Leverage tech solutions to set up efficient and scalable systems.

  4. Prioritize sales and marketing.

1. Hire adaptable people with an entrepreneurial spirit.

One of the biggest mistakes founders make is trying to do everything themselves.

While it is definitely valuable to intimately know and understand every aspect of your business, it's unwise to try to carry an entire business on your shoulders. In the earliest days of a business (especially a bootstrapped one), it will be necessary for you to wear multiple hats, but once the model has been proven and there is some momentum to justify outside support, it's essential to find the right type of help.

A young business is in a constant state of evolution. Things don't always go as planned. Ideas and reality don't always align. For these reasons, it's a tremendous help to hire people who are adaptable and entrepreneurial themselves. Look for people who have great soft skills on their resume and varied sets of hard skills that will serve them in different contexts. 

Experience is one thing, but attitude is perhaps even more important. A smart person can learn new skills, but they need to have drive and passion to survive in a bootstrapped business.

2. Keep your overhead low.

One of the biggest challenges of starting a business is month-over-month costs. These can pile up quickly! Office space rent, equipment, websites, SaaS tools, digital marketing and paid ads are all pieces of the business puzzle that commonly have recurring costs that inflate your overhead. If you don't have any upfront investment and haven't already started generating revenue, these costs can quickly drive you into the red. If you are not careful, you might dig yourself a hole that goes too far down.

To avoid this, keep your monthly costs as low as possible. Bootstrapping means problem-solving with hard work and creative solutions, not cash.

Granted, there are some unavoidable costs, but there is always more than one way to fix a problem. For example, as an alternative to renting and furnishing an office, there are tons of affordable coworking spaces in every major city, where you can host meetings or get down to the daily grind with your team. Keep your costs low with creative problem-solving. There are plenty of small business resources at your fingertips. 

No one is going to dump money on your desk when you first start out. You will need to fight for every penny along the way, each cent just as important as the next. Avoid spending and focus on earning at all costs.

3. Embrace tech solutions from the beginning.

When you are a small team without significant investment, you might start to notice a lot of gaps where you could use more support. So many small tasks, manual input and repeated efforts are necessary to keep the machine moving for any business. However, when you are on the bootstrap grind, it's not always as easy as going out and hiring someone to help you with whatever you need. This is where tech comes in.

Thankfully, there are tons of great tech solutions for startups that can make a huge difference in the work capacity of a small team. It's all about working smarter, not harder.

Of course, this sounds easier than it is. However, if you keep a keen eye on the daily activities of your business, taking note of the repeated and manual tasks, there is a ton of potential for you to embrace tech solutions to save yourself and your team significant time.

Too many people waste their time doing small tasks that could be automated or made redundant by applying a little creative thinking and finding the right tool. Don't be one of them – time is everything when you are starting out.

4. Make marketing and sales a top priority.

Of course, you need a clearly defined product or service before you can sell anything, but in the bootstrapped entrepreneurial world, you might not have every aspect of your business as perfect as you would like it to be yet. While there's no debate that you need to actually have something to sell before you can market it, the reality on the ground is that, if you don't have lots of time and money to sink into product development, you will need some revenue from the very start to keep the ship afloat. 

This might mean that you need to start selling before the "perfect" launch date. This gives you the opportunity to learn from your customers and improve whatever you are trying to offer.

Sales are the engine that keeps a bootstrapped business moving forward, but it's important to be honest with potential customers. Let them know that it's still early days for your business and that you might still be refining your service or developing your product. 

Consider offering early adopters a discount or "lifetime" deal. This will give you a base of customers who understand what you are trying to do and are open to providing feedback that helps you build a better solution for them. This is usually known as beta testing in the tech space, and it is actually a very important step in making sure you are headed down the right path with your business.

What's next?

These are just a few recommendations that may be able to help as you start your entrepreneurial journey. Keep in mind that every business is unique and you will constantly be faced with tough business decisions that could make or break your bootstrapped endeavor.

The most important thing is to stay creative and apply critical thinking in your work, remain flexible and adaptable within the systems you build, and always learn from your mistakes to evolve your approach.

There will be many bumps in the road, but perseverance pays off in the end!

Connecting SMBs to Federal Opportunities Makes a Better Government

Posted: 28 Aug 2019 08:00 AM PDT

  • $120 billion in federal contracts is allocated to small businesses, but only a small percentage of companies bid on government contracts
  • Governments get too little competition from too few companies, and citizens ultimately do not get best value for their tax dollar.
  • An improved procurement process would allow governments to reach more businesses, boost bid volume and grow new business opportunities by more than 55%.
  • Such a process requires support and participation by governments and a modern technical platform that reaches every local and national business.

In a historical first, the federal government awarded more than $120 billion in federal contracts to small businesses – exceeding the SBA's targets for the sixth consecutive year. Overall, the federal government spent more than $550 billion on contracts in 2018 – and the money doesn't stop flowing there. Billions of dollars in contracts are awarded at the state and municipal levels too. California, for example, spent more than $311 billion on contracts last year.

Yet, it's extremely unfortunate to think that just a small percentage of U.S. businesses bid on – or win – government contracts each year. Minorities, women and disadvantaged businesses are among the groups disproportionately underrepresented in the contracting space. Why is this? To help fix the problem, a more inclusive system is needed to provide more – and new – businesses with a better, modern and easier way of connecting with available government opportunities.

Simply put, governments have an extremely hard job to do, and they can't do it alone. They need the support and connection with suppliers. The more diverse businesses we connect to governments, the greater value governments will be able to deliver to all of our communities and everyone wins.

If connecting businesses with opportunities is the secret here for more local business growth, which benefits all communities, here's how we can all work together to get this done:

Level the playing field with technology

Technology has come a long way since the days of rotary phones and bunny ears, but there's still plenty of opportunity for technical platforms to be utilized and simplified – especially in the world of procurement. We estimate that businesses spend just under $2 billion dollars annually simply to identify government opportunities. It's a highly fragmented market that favors incumbents and well-resourced business who have sales teams specifically targeting these opportunities, but this market shuts out many small, midsized and historically underrepresented businesses.

As a result, governments receive much too little competition from too few companies, and citizens ultimately do not get the best value for their tax dollar. Independent online services are simplifying the process with competitive intelligence, real-time connections and timely updates. The more governments transition from siloed purchasing systems to shared purchasing networks, more businesses will be brought into the ecosystem.

Just think about how that will even out the playing field, giving local businesses the opportunity to respond and successfully bid for government work as a way to guarantee their company's growth and build longstanding business relationships. Most often, these bids come with a set budget, with the funds already earmarked and ready to be spent. This process ensures that a company could scale with new hires or new equipment based on the set budget, which ultimately leads to more business in the future.

Everyone can and should compete

It's not just businesses that profit from the procurement process. In fact, it's the local, state and federal government that stand to see the greatest benefits. Without new businesses bidding on new solutions, government procurement departments are missing out on new technologies, new approaches and new services and ideas.

The government recognizes the need for greater inclusiveness and has programs that help strengthen the bidding odds for disadvantaged, small and minority-run businesses. In some ways, those efforts are paying off. Last year, for instance, the federal government exceeded its goal to award at least 23% of contracts to small businesses. More than 25% of small businesses won bids in 2018, according to the SBA's annual procurement scorecard. But more needs to be done to educate businesses on these opportunities so they are aware of them and can successfully and competitively bid on these projects.

Within its stated small business goals, the federal government lays out a subset of contracting goals to help disadvantaged and minority businesses. These goals state that the government wants 5% of small business contracts to be awarded to women-owned businesses, and another 5% to disadvantaged small businesses. Additionally, they would like 3% of bids to service-disabled veterans, and 3% to businesses located in historically underutilized areas.

Businesses with these designations should seek out these government procurement opportunities once they are certified. To comply, a business needs to be 51% owned by an individual who is socially or economically disadvantaged. Gaining certification isn't as difficult as it may seem. There are several agencies that can guide businesses to earn a small business or disadvantaged business official designation, including the SBA. 

Efforts are also being made on a state and municipal levels. For example, earlier this year, the city of Los Angeles became the largest economy to formally include LGBQ-owned businesses in its contract procurement processes. Other large U.S. cities – including Orlando, Nashville and Baltimore – are also embracing LGBT-certified businesses through their procurement departments.

It's nice to see governments stepping up inclusiveness efforts, but there's still plenty of work to be done. Larger targets for minority businesses – coupled with greater multi-level incentives to incorporate diversity – would go a long way in improving the procurement process.

Businesses helping businesses

Municipal governments are a huge employer for businesses, and the support they provide to contractors trickles through the entire community. For each $100 spent at a local business, $68 stays in the community. Conversely, just $43 spent at a non-local business remains in the area. That's an impactful difference. Supporting local businesses is also a great way to promote inclusiveness; nearly half of small businesses are owned by minorities.

By awarding contracts to small businesses, governments are helping fuel local economic growth, bolster diversity, and create a continuous cycle of success. A tip for helping businesses connect with local government procurement offices is to make connections. To do so, introduce yourself and market your company to government procurement managers. Often these government offices will host a "meet the vendor day" and businesses have a chance to attend. Again, they just need to know where the opportunities exist.

One of the ways to approach that is through an online marketplace that host the bids. Going forward, governments must take a more modernized approach to the procurement process to maximize the benefits for both businesses and the public. Opening up the bidding process to new ideas and strategies can help governments connect with forward-thinking and progressive leaders, which will strengthen the community as a whole.

The process must be modernized, and simplified, to help businesses easily connect with the right opportunities. It should also help make the connection between opportunities and suppliers on a hyper-localized level. Landscapers, maintenance crews and construction workers should all have the opportunity of securing government projects. They just need to know these opportunities exist for their business and we need to lean on the government, and the businesses to understand the importance of these opportunities and how to engage with them.

After all, when the relationship between government and business is healthy, it creates the perfect breeding ground for growth and innovation.

When You Should Hire Your First HR Person

Posted: 28 Aug 2019 07:00 AM PDT

  • Small businesses spend between 18 and 40 hours a month on HR-related tasks.
  • Deciding when to hire someone to handle those tasks for them can be a tough decision for small business owners.
  • An in-house HR-person should definitely be considered if your business has, or is approaching, 50 employees.
  • If you don't want to hire a full-time employee, consider hiring a contractor or using an online service.

It's unlikely you became an entrepreneur so that you could dig through mountains of employee paperwork. Your dream was probably not monitoring ever-changing workplace compliance laws, either.

However, a recent study found that 41% of small business owners choose to handle HR themselves. On average, small businesses spend about 18 hours a month on HR-related tasks. For those also handling payroll themselves, the total jumps to almost 40 hours a month. That's a daunting amount of time for someone already pulled in a hundred directions.

Eventually, every leader needs reinforcements. As your business grows in size and complexity, hiring an in-house human resources professional becomes a necessary next step. But how do you know when the time is right? What are the signs your company is ready to take the plunge? Here are five reasons why it might be time to hire your first human resources team member. 

1. Your time is needed elsewhere

You are likely wearing many hats, sacrificing time to keep costs at a minimum. Taking on HR responsibilities, even if it means a few late nights, makes good financial sense while a company is in its early stages. There may not even be enough work available to necessitate hiring a full-time employee solely dedicated to HR.

However, if you're personally dedicating 18 or more hours a month to HR, it may be beneficial to re-evaluate how you invest your energy. What's your time worth? What other higher-value endeavors would you tackle if you had the bandwidth? Moreover, if you're overwhelmed and your to-do list is out-of-control, this can have a trickle-down effect on both morale and the bottom line. Ask yourself what really fires you up about running your business. Would doing more of it benefit your company? Are there things that nobody else can do that you'd like to spend more time on? If the benefits of focusing your time elsewhere outweigh the cost, it may be time to hire someone to take HR responsibilities off your shoulders.

2. Uncertainty has crept in

According to the same study, 86% of small business owners say they're confident their HR practices are fully compliant with state and federal regulations. However, when asked about specific tasks such as maintaining employee records, properly categorizing employees and contractors, and having up-to-date employee handbooks, more than half were not so sure. With so many moving parts, uncertainty can creep in. Business leaders we've spoken to report wondering if they are missing something critical, especially when they don't have more time to allocate to HR to make sure things are being done right.

Hiring an in-house human resources professional can increase your confidence that everything is being handled responsibly. Whether you're managing HR yourself, outsourcing certain tasks, or utilizing a non-dedicated employee, how confident are you in both your compliance and best practices? Are you spending a lot of time speaking with HR consultants or wading through the internet trying to stay on top of current laws? Based on your answers, it may be more cost-effective to bring in a dedicated HR professional. Nearly 30% of small businesses have been audited by the IRS, and the fines for non-compliance are typically serious. If you're uncertain, this may be a great opportunity to bring on an expert who can mitigate risk and relieve you of any nagging worries.

3. You're growing – with no plans to stop

As teams scale, growing pains are to be expected – and even celebrated. Each exciting milestone brings its own set of challenges. But growth also sometimes means that things get more complicated. Communication may start to break down, especially if employees and contractors are spread out over multiple locations. There may be limited bandwidth to offer employee evaluations. New hire onboarding might become a handshake and a signature. It may be difficult to answer employee questions, discuss sensitive issues and resolve conflicts. Perhaps not everyone is aware of company policies, either because you're uncertain of them yourself or because they weren't communicated, or even written down somewhere.

The key is recognizing when issues are getting out of hand. According to that same small business study, once a company reaches 20 employees, there's an equal chance that HR is handled by the owner, a non-dedicated employee, or a dedicated HR person or team. Once a company grows to between 50 and100 employees, there's a 55% chance they have a dedicated HR person.

If you're on your way to 50 employees or more, it may be time to consider hiring on an HR professional. Based on pay-per-employee and the cost of your current HR solution, is it something you can afford right now? If hiring a dedicated HR professional isn't feasible now but will be in one or two years, consider other solutions in the meantime. This could be delegating to a non-dedicated employee or utilizing an online HR service provider. The important thing is that the solution fits your particular business and you have a plan for when you outgrow it.

4. Company culture is a top priority

Most entrepreneurs set out to create a company they want to work for. Many accomplish that by building a culture that unifies everyone as part of a greater vision. And that culture can also help businesses attract and retain top talent – and gain an edge on the competition.

It is widely agreed that company culture has a significant impact on the bottom line. Clear feedback and reward systems, a positive working environment and career development opportunities all contribute to less turnover and happier, more productive employees.

If you're looking to boost morale, increase productivity and attract prospects that will help you achieve your vision, but don't have the time to do this effectively yourself, it may be time to bring in an HR professional. At the very least, there should be someone (other than you) responsible for protecting the culture you set out to create and strategically developing it alongside you.

5. The only thing holding you back is worry

Let's say you've determined that hiring an HR professional is both necessary and cost-effective, but something is still holding you back. Hiring someone to develop and manage your team and culture can feel like dropping your kids off at daycare for the first time. It requires a huge amount of trust. If you've held the reins for a long time, it's natural to be apprehensive about handing them off. However, the benefits of delegating this responsibility are well worth the investment. Employees are most effective when their skills and interests align with their responsibilities. A business owner is no exception. If you stick to your strengths and trust tasks to others with the talent and time to see them through, it'll make you a more effective leader.

If you're not quite ready today, but hiring some HR help is a must within the next year or two, consider bringing on a contractor, non-dedicated employee, or an online HR service provider.

If you've decided that you're ready to take the plunge, take your time to recruit an HR professional that will jive well with your company culture. Go slow and be picky as you choose a human resource manager. In the long run, fast hires often end up being bad for everyone involved. Choose a team player who will keep your vision front and center but not be afraid to challenge the status quo. Then, get ready to spend those reclaimed hours on other high-value endeavors.

It's thrilling to have grown your business to the point where you can bring on help to manage your team.  Celebrate that success with an investment in your most important (human) resources and you'll be set up to thrive in the face of any new challenges that come your way.

Why Your Small Business Needs an IT Partner

Posted: 28 Aug 2019 06:00 AM PDT

  • Small business can befit greatly from finding an IT partner
  • Most small business point to efficiency and support as the top reasons for finding an IT partner
  • IT partners can help with planning, scalability and support 

Most successful companies don't get where they are without forming beneficial business partnerships. And, in today's technologically driven, on-demand world, having a strong partnership with a managed service provider is essential. This is because every business, no matter what industry, relies on technology. Without such a partnership – especially if technology isn't your company's forte – you could be asking for trouble. 

Think about it as it relates to security alone. Your systems and data could be vulnerable without the right planning and protection. Your employees access the company network via your computers. Customers locate your business information on your website. Office visitors need guest access to your network. With all that going on, hackers and cybercriminals must still be kept at bay. Throw in all of the little IT issues that also come up every day, from jammed printers and software patches to setting up new employees on computers.  

By collaborating with an IT partner that specializes in IT infrastructure and processes, you can save yourself a world of hassle and, in many cases, deliver tangible savings to your bottom line. Here are three reasons you should align your business with a resourceful IT partner.

1. IT strategy and planning

Just as you have a strategy for your business's success, you also need an IT strategy. Having an IT expert as a partner can prove very beneficial in helping you to map out an IT growth path that makes the most sense for the size, scale and functionality of your organization. They can also make you aware of many useful solutions that you might not otherwise be aware even exist. 

A smart IT partner will help you develop a plan that also supports overall business operations. This means making sure your IT department can support overall business goals and aligning IT budgets with corporate budgets. 

If you're still not convinced that you need to develop an IT strategy, consider your network security. By developing a plan to protect your network, along with a strategy to keep it up to date with the latest security strategies, you will be a proactive player in protecting your organization. What you don't plan for now can cost you dearly later. 

According to Verizon's most recent Data Breach Investigation Report (DBIR), 43 percent of all data breaches target SMBs. And, cybersecurity firm 4iQ, in its 2019 Identity Breach Report, stated that cybercriminals targeted small businesses with cyberattacks in an exorbitant rate in 2018, increasing nearly 425 percent over the previous year. To top it all off, InsuranceBee's Cyber Survey of more than 1,300 SMB owners shows that more than 80 percent of businesses lack the money they would need to recover from a cyberattack or data breach. And I haven't even mentioned the repercussions of downtime or other network security issues.

Preparation is the only true way to avert or minimize disasters and ensure that business operations can continue. Protecting your business begins with understanding its vulnerabilities and safeguarding against the risks you face. By working with an IT partner to prepare for the worst-case scenario, you can avoid business disruption, downtime and other issues. By relying on an expert, you can also rest assured that your systems are available and reliable, no matter what disasters you encounter. 

2. Increased efficiency and scalability

By utilizing an IT partner, you can scale your IT infrastructure up or down to meet your needs with far greater speed and with less upfront hardware expense than if you tried to do it internally. Scalability is especially important when dealing with a growing business since you can scale servers and other infrastructure as needed without going out of pocket for new hardware. 

In most instances, you will find an IT partner will deliver better equipment and services than you could otherwise afford. Rather than purchasing new equipment and maintaining expensive hardware and software internally, you can focus on your core business. 

New hardware and software implementations will also go smoother, without disruption to daily operations. An experienced IT partner can help ensure the implementation is done right the first time. And with experts managing the migration, you can focus on the business at hand.

With the trend of cloud-based services and cloud-based servers, many companies become overwhelmed by the process and potential disruption to critical business functions during implementation. Here again, an IT partner can handle the entire implementation and save you the day-to-day headache.

And, if all goes as planned and your company grows, you'll add more employees, more computers and expand your network. While growth is great for business, it could create problems for novice IT staffs. An expert will know how to successfully scale with your growth and vigilantly protect your data repository.

3. Constant support and happy customers


Another advantage is having IT expertise at your fingertips 24/7. Why should you spend part of your day dealing with unexpected downtime, managing software upgrades or security patches and hardware and software maintenance when you can have an expert handling it for you? They understand how to better utilize your IT resources. In fact, according to a CompTIA survey, more than two-thirds of companies used an outside IT partner.

Even those with an IT department found the additional expertise and knowledge of an outside partner more efficient than hiring another full-time employee as the company grew. The same report found that 56 percent of companies with 100 or more employees ranked efficiency and support as the main reason for using an IT partner. IT emergencies can (and sometimes do) happen outside of normal business hours. IT partners are staffed 24 hours a day, 7 days a week, giving you the support required to run your IT operations whenever you need it.

Reduced downtime is another huge benefit, as every minute an IT issue is not resolved it is costing you money. A study by IDC found that 80 percent of small businesses experienced downtime, with the cost ranging from $137 to $427 per minute. If you or an employee is experiencing a problem that you are unfamiliar with or have not encountered, you could spend hours trying to figure out a problem when a trusted IT partner who has dealt with the same issue dozens of times can make a quick fix.  

With an IT partner, not only do you have an expert on-call whenever you need them, but you also often have the benefit of newer, more up-to-date hardware with managed antivirus and security services included to mitigate your risk. It also means that your employees are less likely to lose productivity due to technical issues or a downed network. Not to mention, your customers will also be happier and more likely to do repeat business with you because they had a pleasant and successful experience with your website.

So, before you decide to take on or expand the IT portion of your business, consider finding a resourceful IT partner that can help drive you to success. The entire premise of IT management is to align technology with your business goals to create value and ensure the smartest, most efficient use of your technology assets. 
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