Monthly Archives: March 2012

Surety Bonds and Other Hidden Costs Entrepreneurs Should Plan For

Hidden Costs in Business Planning from The Startup Garage

Surety Bonds and Other Hidden Costs Entrepreneurs Should Plan For

When starting a business, entrepreneurs know they need to plan a budget that funds, at minimum, the entire first year of operating costs. Unfortunately, hidden start-up costs almost always come along with starting a new business. These hidden costs often result in a shortage of funding at inopportune times. As such, entrepreneurs should identify all potential start-up costs before developing their final financial plans.

Even though many major industries legally require professionals to maintain surety bonds, their costs often come as a surprise to entrepreneurs. Bonding is often the first big budget buster because it’s typically required before an entrepreneur can apply for a business license.

So, what kind of professions require surety bonds?

A myriad of industries require business owners to purchase surety bond insurance before they can be licensed. Surety bonds provide financial guarantees that protect consumers rather than the policy holder. As such, those required to purchase surety bonds typically work in industries that provide services to consumers. The following professions are just a few that almost always require surety bonds as a part of the licensing process:

  • auto dealers
  • cleaning or janitorial companies
  • construction professionals
  • collection agencies
  • heath care professionals
  • mortgage professionals
  • telemarketers

The exact bonding requirements entrepreneurs must fulfill vary depending on state laws. For example, an auto dealer in Florida needs a $25,000 surety bonds whereas a California auto dealer needs a $50,000 surety bond.

Generally speaking, the bigger the bond, the higher the cost. Sureties also review the financial records of all clients, and those with low credit scores typically pay higher premiums for their bonds. If an entrepreneur doesn’t set aside the necessary funds to pay for a surety bond, getting a business license could take much more time than anticipated.

What are some other hidden costs to starting a business?

Once entrepreneurs purchase their bonds as required, they can apply for a business license. However, hidden start-up costs don’t stop with surety bonds. When preparing to start a business, entrepreneurs might also need to set aside money for

  • license and registration fees
  • business incorporation
  • rent
  • utilities
  • Internet service
  • office supplies
  • background checks for job applicants
  • financial advisers/accountants
  • lawyer fees

These are just a few examples of hidden costs that can adversely affect entrepreneurial budgets. Without planning for all potential costs, entrepreneurs could run out of funds and find themselves in financial ruin. When it comes to budgeting for a new enterprise, entrepreneurs should know it’s better to be safe than sorry. Eliminating the opportunity for hidden costs to pop up allows entrepreneurs to create realistic budgets they can stick to.

Kevin Kaiser is a co-founder of SuretyBonds.com, a surety bond company that issues bonds to help entrepreneurs get their enterprises up-and-running as soon as possible. As a part of its educational outreach program, SuretyBonds.com provides informational articles to help entrepreneurs understand the legal implications related to bonding and business start-ups.

 

Whether you have a question about Surety Bonds and Hidden Costs, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

A Visual Look at US Angel Investing

Visual Look at Angel Investment from The Startup Garage

A Visual Look at US Angel Investing

The image below is the first of its kind – issued by Silicon Valley Bank (SVB) and CB Insights, the Halo Report image provides us with new and graphic information regarding the Angel Investment world.

Some of the highlights we took from the report:

  • California leads in deals and dollars among individual states at 21% of investment
  • Median angel group investments grew to $700,000
  • 58% of angel group investments were in healthcare and internet companies
    • 60% of healthcare investments were in medical device and equipment companies

 

Whether you have a question about US Angel Investing, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Is New York Fostering a New Silicon Valley?

News on New York's Silicon Valley from The Startup Garage

Is New York Fostering a New Silicon Valley?

New data coming out of New York is showing that the New York’s technology venture capital (VC) scene is growing at rapid rates. As “Tech VC King of the East”, New York still can’t compare to the tech champion that is California – however, its rapid growth in the last two years proves to be a significant item of thought. The image below, courtesy of CBinsights, shows how New York took over Massachusetts’ reign of technology VC in the East and how their numbers compare to California.

So what does this mean for us? Well, if you are looking into starting a tech company and were vying for a Silicon Valley launch, you may want to set your sights to New York as well. Apparently the VCs there are itching for some emerging technologies, and you could get lucky.

 

Whether you have a question about this article, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How to Up your Networking Game

Step Up Networking Game from The Startup Garage

How to Up your Networking Game

This year’s SXSW Convention, a nine day crossroads of music, film, technology and entrepreneurship, provided us with a great amount of information regarding emerging technologies and entrepreneurial knowledge. One great article we read over at Mashable gave a play by play of some great networking tips we thought we would share here at The Startup Garage.

  • Research a Plan of Action – when networking, know your audience. This means the who, the whats, and the whys.
  • Attend With an Open Mind – although easier to mingle with people of the same interest or industry, take advantage of the fact that an array of individuals attend conferences and can offer you a wealth of knowledge or introductions.
  • Research Some Tech Lingo – if you are a new entrepreneur, chances are you haven’t gotten your feet wet with the jargon that comes along with the startup community. Do some research and know your information, or you will be quickly seen as an amateur.
  • Set Up in Hot Spots – find out where people are cycling in and out most often and set up your base camp. Don’t be shy, talk to everyone you can!
  • Leave Room for Spontaneity – maintain openness and availability when going to networking events. Too much planning could hinder your chances of new experiences and also cause you unnecessary stress.

Read the full article at Mashable.
 

Whether you have a question about the Networking Game, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Visually Understanding Telecommuting for your Business

Understanding Telecommuting from The Startup Garage

Visually Understanding Telecommuting for your Business

A visually stunning online poster courtesy of Wrike.com/Tony Keller, breaks down just how much telecommuting affects businesses in the modern age. While working from home isn’t for everyone, it is a smart idea to keep it in mind depending on the needs and wants of your business.


 

Whether you have a question about Telecommuting, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The 4 To-Do’s of Starting your own Business

Startup To Do Business Planning from The Startup Garage

The 4 To-Do’s of Starting your own Business

We read a great article over at Forbes talking about 4 imperative steps that need to be taken if you are thinking of starting your own business. So often we hear people say that they “someday” will be a small business owner, but how often do we see them put their words into action? This article helps to break down four important steps that can catalyst the journey and get future entrepreneurs on their way.

1. Make New Friends – the more people you get to know, the bigger a network you have to learn from.

2. Pick Some New Role Models – identify people in the business world that inspire you in order to emulate their personalities and leadership styles

3. Fall in Love with Small Business as a Customer – understand the difference between big and small business, and love what small businesses have to offer

 4. Demystify “Business” Speak – learning basic business jargon will definitely help you on the path to success and it’s as easy as reading business blogs, like this, or subscribing to business magazines

To read the full article at Forbes, click here.
 

Whether you have a question about To-Do’s of Starting a Business, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How iPad’s are being used in Small Business

Startups That Got Funded In May from The Startup Garage

How iPad’s are being used in Small Business

According to recent national survey, the use of Apple iPads have quadrupled in the past year for small business use. With almost 75 percent of small business owners saying they are “somewhat familiar” with the iPad, it is safe to say that the product is one of the fastest developing products since its launch in 2010.

So why the huge surge of iPad use? Godfrey Phillips, VP of research at The Business Journals, says that, “research has shown that for small business owners, productivity and efficiency, which used to be the central benefits of technology, are now declining in importance compared to accessibility.” The accessibility he speaks of is the simple fact that owners can access their business information at any given time with the ease of the iPad.

While the full survey results on how iPad’s affect small businesses won’t be available til March 31, it is safe to say that the launch of the newest iPad 3 this last week  will spark new interest in the product across all target markets.

Read the full article over at TechFlash.

 

Whether you have a question about iPad use in Small Business, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Selling Franchises

Selling Franchises Capital Raising from The Startup Garage

Selling Franchises

While franchising is often thought of as a means of building your brand with limited capital outlay, franchising can also provide an additional revenue stream for your business through franchising fees and royalties.  Typically, entrepreneurs charge an initial fee for the purchase of the franchise as well as continuing fees on total revenue.  Ongoing management fees are charged as a percentage of total turn-over in exchange for sales, marketing and additional support. In some cases, the entrepreneur also acts as a vendor to the franchisee providing supplies, in which case additional revenue is generated based on the mark up of these items.

Franchising typically is done by companies with a well established business and the ability to provide significant marketing support or well-established systems for franchisees to get started.  Franchisees pay money in return for using the brand name and relying on the proven business structure already in place. Returns from franchising your business may take longer to realize, so it is not as advisable a funding option for short-term cash flow needs, but can provide consistent, longer term revenue streams for companies in need of cash.
 

Whether you have a question about Selling Franchises, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Stride – a CRM System Catered to Small Business

Stride CRM News from The Startup Garage

Stride – a CRM System Catered to Small Business

With Salesforce gaining speed and big exposure in the CRM (Customer Relationship Management) world, it is beginning to be met with opposition gearing towards the needs of small business. Created under the need of simplicity, a CRM system focused on small business owners named Stride goes into private beta today.

By eliminating complicated reports, the adding of contracts, and dealing with multiple salespeople, Stride focuses on the basics: deal-tracking and high-level metrics. So what does that mean exactly? Stride, in essence, will easily help you to track variables such as active deal value, average values, number of active deals, etc. It’s simple and visually appealing interface will create pie charts and graphs that will illustrate time and value and compare gains and losses.

With the products pricing beginning at FREE and going up to $7/month of unlimited deals alongside a soon-to-be integration with Quickbooks, Freshbooks, and Rapportive, this simple CRM machine might just become the annoying thumbtack stuck in Salesforce’s foot.

Read the full article over at TechCrunch.
 

Whether you have a question about the CRM Stride, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Equipment Financing

Equipment Financing Business Planning from The Startup Garage

Equipment Financing

Equipment financing provides funding for companies looking to purchase equipment, but lack traditional funding sources to pay for the purchase.  Typically with equipment financing loans, the cost of the equipment is spread out over the course of a payment plan which extends over a number of years.  For these loans, the equipment is used as collateral to help secure the position of the lender and lower the interest rate on the loan.

Equipment financing is often used by growing companies to purchase necessary equipment, but may also be used by established companies to replace tired equipment or upgrade equipment to remain competitive.  Some equipment financing companies require a business history of at least 3-years and rates may vary based on how long the company has been in operation.

 

Whether you have a question about Equipment Financing, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!