Small Business

Finding the right type of financing is often one of the most difficult parts of starting and building a small business. You may have a terrific plan and be a talented workaholic, but finding funding is another matter. Business owners often start with too little money. It's one of the most common reasons why new businesses do not make it. Sources and types of small-business financing fall into a few broad categories. It will be either debt or equity financing from an institution or informal sources.

In many American households personal and business spending are intertwined. So smart spending on your small business can mean more dollars falling to your household's bottom line. Whether it's full-time home-based businesses, part-time eBay businesses, Internet storefronts or occasional freelancing, millions of Americans have business-related spending. Of the nation's 25 million firms nearly 20 million have no employees besides the owner, according to the U.S. Census Bureau. One key to small-business success is to be a penny-pincher, said Gene Marks, author of several books, including the Streetwise Small Business Book of Lists: Hundreds of Lists to Help You Reduce Costs, Increase Revenues and Boost Your Profits.

Small-business owners are reasonably optimistic about their own companies despite uncertainties that could rattle the economy this year, experts say.Among the unknowns are the impact of economic woes in Asia and South America, President Clinton's political viability and the year 2000 computer problem."

Small business owners in south Anne Arundel County are banding together to form a nonprofit agency to serve as champion for the independent, mom-and-pop stores that are a staple in this still mostly rural area.Despite a temporary moratorium on rezoning proposals that affects all but the most northern portions of the county, south Arundel business leaders say they have seen the writing on the wall when it comes to development."I've dedicated my life to this," said Weems W. Duvall Jr., a Churchton lawyer who has long battled proposals for development in the area.

Richard H. Shepherd Jr. learned that he had received one of the highest awards given to small-business people in Maryland last month. But barely a week later, he lost the job that helped him get it.It was days after General Motors Corp. officials warned Shepherd that he might lose his ownership of Columbia Pontiac Buick GMC that a photographer from the federal Small Business Administration went to the dealership on McGaw Road in Columbia to take his picture.That was when Shepherd knew that he had been named the state's Minority Small Business Advocate of the Year for his outstanding business performance and community service.

IF YOU ASK Richard H. Shepherd Jr., he won't blame his loss of a General Motors auto dealership in Columbia on his race. He and GM couldn't see eye to eye on how much money the business should be making after two years. But Mr. Shepherd believes that race did play a role in car sales, providing important lessons in how blacks and whites still frequently see each other through stereotyped lenses.Mr. Shepherd, an African-American, says customers, black and white, refused to believe he was the owner of the franchise.

Business owner Sarian Bouma spent one year on welfare, and she says that was more than enough.She has since used her business acumen to help others move from dependence to independence. And for her efforts, Bouma has been named a national winner of the U.S. Small Business Administration 1998 Welfare to Work Entrepreneur award.As founder and chief executive of Capitol Hill Building Maintenance Inc., a janitorial services company based in St. Mary's County with offices in Prince George's County and Norfolk, Va., Bouma has hired the homeless, poor, elderly and even people on work-release.

Richard H. Shepherd Jr. learned that he had received one of the highest awards given to small-business people in Maryland last month. But barely a week later, he lost the job that helped him to get it.It was days after General Motors Corp. officials warned Shepherd that he might lose his ownership of Columbia Pontiac Buick GMC that a photographer from the federal Small Business Administration went to the dealership on McGaw Road in Columbia to take his picture.That was when Shepherd learned that he had been named the state's Minority Small Business Advocate of the Year for his outstanding business performance and community service.

THOUSANDS OF homeowners who run businesses from their houses would be the beneficiaries of a new legislative effort on Capitol Hill to redefine and broaden the tax deductibility of office-in-the-home expenses.Spearheaded by Sen. Christopher S. "Kit" Bond, the Missouri Republican who chairs the Senate Small Business Committee, the push is designed to bring clarity -- and fairness -- to one of the most controversial sections of the federal tax code affecting homeowners.An estimated 9 million Americans now run businesses from their homes, according to Bond, and roughly 70 percent of those enterprises are owned by women.

Robert Mayo gets to the office most mornings by 7: 15, and sometimes works well into the night designing software and angling for clients. But he manages to meet his family in the kitchen for lunch, rarely has to wear a tie and relishes the breaks he takes with his children at the backyard swing set. All without the hassles of a daily commute.Mayo is no longer an anomaly. He's part of a mushrooming army of former clock-punchers who have left the meetings and the power wardrobes behind -- to run businesses from home.

Bealefeld correct on accountability In reference to the article this week "Bealefeld urges accountability" (May 20), for the most part I agree with the Police Commissioner's comments. Mr. Bealefeld is right that those convicted of crimes against African-Americans usually receive a lighter punishment than those who commit crimes against whites. Why is that? All life is important. I have run a mentoring program for 13 years and have tried to instill good morals, principles and respect in our young men. But at the end of the day, after they have left my presence, parents, guardians and others must get involved.

Four and a half years ago, Martin Haft took a deep breath, borrowed $150,000 from a bank in Carroll County with a Small Business Administration guarantee and opened Walk About Shoes, a specialty shoe store in Westminster. The store was the only one in the county with a wide range of shoes designed to meet medical or special size needs, and business grew briskly. Today, Mr. Haft finds himself beleaguered, in need of cash to buy inventory in the midst of a major economic decline. If he can't find the money he needs, there is a good chance that his shoe store will disappear, leaving an empty storefront and three people, including Mr. Haft, jobless.

WASHINGTON -Working to jump-start the economy's engine of job creation, President Obama announced yesterday that up to $15 billion will be spent to boost lending to credit-hungry small businesses. The new effort was also meant to allay criticism that the White House has focused too much on the needs of fallen financial titans on Wall Street and not enough on the economic damage to small businesses. The financial crisis has dried up most commercial lending, including the lines of credit that are the lifeblood of small business, which historically has created about 70 percent of the economy's new jobs.

If you plan to start a small business, chances are you have many questions. If you haven't already, sooner or later you may be wondering: * How do I get a business loan? * Where are the good places to advertise? * What workplace safety laws govern my business? * Should I be sole proprietor or form a corporation? * What should my pricing formula be? * Can my community support another business like mine? * How do I interpret an advertising rate card? * Should I run the business from home or rent a space?

Working capital is the difference between current assets and current liabilities. Lack of close control on working capital is one cause of business failure. The small business owner must be constantly alert to changes in working capital, the reason for them, and any resulting business implications. It is helpful to think of working capital in terms of six components: 1. Cash and equivalents. The most liquid form of working capital requires constant supervision. Among considerations: whether the cash level is adequate to meet current expenses; timing of cash inflow, cash outflow and peak cash needs; amount to borrow to meet cash shortfalls; and the timing of repayment of loans.

Time can be a small-business owner's best friend or worst enemy. It all depends on how you use it. There just never seem to be enough hours in the day to get things done. Time is extremely valuable to business owners - especially if you bill for time. Wasting time can be harmful to your bottom line. To operate efficiently, your business might need systems for managing time and keeping track of who's working on what and for how long. Most successful small-business owners are also successful time managers.

In this age of instant communication and Web-based business services, there's more than one way to start and build a business. If your budget and time are limited, and potential partners and co-workers are widely dispersed, a good model to consider is to operate as a "virtual business." This is where most of the business structure exists online. The virtual business movement has transformed how millions of small, successful firms operate. Under this model, business owners outsource nearly everything - including people and partners who can be anywhere - to create their company.

Negotiating is a specialized form of problem-solving. Two parties start with opposing positions and try to reach a middle ground. And in the context of a cost-conscious small business, wise negotiating practices can spell the difference between fiscal soundness and failure. Negotiating affects virtually every facet of a business. For many entrepreneurs, the first serious negotiation will concern a lease. As the business grows and demands more resources, negotiating skills are likely to come into play again if the business owner wants to expand by acquiring another business.

Many small businesses waste money on routine expenditures simply because they don't pay attention. And while money spent on shipping, office supplies, service contracts, Internet and others might fall into the category of "small stuff" for some businesses, these routine items can be costly. It is important to establish smart buying habits to protect your profits. The steps you can take are not complicated and do not require fancy financial formulas. When it comes to cutting costs, common sense prevails.

Operating a small business from home can free entrepreneurs from the costs of leasing space and commuting. But too many of them may short-change themselves when it comes to buying insurance. A recent survey commissioned by the Independent Insurance Agents and Brokers of America found that nearly 60 percent of the nation's 11 million home-based businesses do not have insurance coverage. Madelyn Flannagan, IIABA's vice president of education and research, explains that home-based business owners are at risk for financial losses associated with theft, accidental damage, natural disasters, vehicle accidents and liability if an employee suffers an injury while on the job or a business guest is hurt while visiting their business.