Top 10 Home Improvement Franchises

Retrieved on 17th November 2009 from http://www.entrepreneur.com/slideshow/195088.html

Setting The Right Price

written by Rosalind Resnick

How to balance costs and profits when charging for the items you sell

Q: I want to turn my hobby of making gift baskets into a homebased business, but I don't know how much to charge for the items I sell. Should I take the cost of the materials and add a small profit? Can I charge the same price as the gift baskets sold at the mall?

A: Setting prices has always been more art than science. Set your prices too high, and you scare customers away. Set your prices too low, and you lose money on every sale. Amazingly, most business owners still set prices the old-fashioned way--by charging the same as the guy down the street.

Ask yourself the following five questions before you put your products or services on the market:

· Do you know how much it costs to produce your company's products or services? This may seem like an obvious question, but it isn't. Especially in small professional services firms, lawyers, doctors, accountants, architects and other professionals often neglect to factor in the value of their own time when it comes to pricing their services. That's why an accountant who charges fixed fees to prepare tax returns may think that he's making a ton of money during tax season, when he's actually selling his time for a fraction of his hourly rate. His practice might be far more profitable if he hired a junior-level accountant or a bookkeeper to prepare the returns so that he could spend his time on the higher-level tasks of reviewing the returns and dealing with complex tax questions.

· Do you know how much money you make on every sale? Most business owners focus on two metrics--sales and net profits--to gauge their business success. Gross margin, the ratio of gross profit to sales revenue, measures your company's efficiency in turning raw materials into income. Think of it this way: For every $1 of sales that your company takes in, how much do you have left over after paying for labor, materials and the other components involved in making your product or providing your service? If the answer is 50 cents, your gross margin is 50 percent. Remember that this does not include rent, utilities, sales and marketing costs, debt service and other general operating expenses that you need to pay to run your business day to day.

· Do you have administrative or selling costs you need to cover?Just because your company's gross margin is 50 percent or higher doesn't necessarily mean that you're making money. That's why your pricing needs to reflect your total cost of doing business, which, in many cases, can be much higher. As businesses grow, they often fail to factor in the cost of their administrative staff--the receptionist, the office manager, the customer support person, the bookkeeper, sales reps and all the other front and back office employees who keep the organization running. When you set your prices, remember that you need to pay your employees, too.

· Do you need to pay commissions to a third-party broker, reseller or sales force? If you run a restaurant or a retail store, customers walk in the door, and you don't have to worry about paying for sales leads and referrals. But that isn't true of a manufacturing or service business. Many small businesses without their own sales force rely on independent reps or agents to bring them business. Depending on the industry, these reps can charge commissions as high as 20 percent on every sale. That may not be a problem for a company that sells a product with a 50 percent gross margin, but it can be a huge problem for a company with a gross margin of only 10 percent. That's why, if you need to rely on third parties to help sell your product or service, it's important to build in enough margin to give your resellers a cut and still make a profit.

· Do you remember the last time you reviewed your company's pricing? Once a business owner goes through the painful exercise of setting prices, he generally doesn't want to do it again. After all, nobody wants to break the news that prices have gone up and risk losing a customer. That said, it's a good idea to review your pricing every quarter--especially if the price of one of your key components or labor costs have increased.

If you had trouble answering any of these questions, it's probably time for a pricing tune-up. If you've got a good relationship with your customers and a specialized product or service that the market wants and needs, you should be able to raise your prices without losing business--and build a solid financial foundation for your company's future.

Rosalind Resnick is the founder and CEO of Axxess Business Centers Inc., a storefront consulting firm for start-ups and small businesses. She is a former business and computer journalist who built her Internet marketing company,NetCreations Inc., from a two-person homebased start-up to a public company that generated $58 million in annual sales.

Retrieved on 16^th October 2009 from http://www.entrepreneur.com/homebasedbiz/money/article65484.html

How to Sell at Craft Fairs and Shows

written by Rosalind Resnick

Interested in turning your artistic hobby into a business? Find out how you can make money by selling your handicrafts at art shows and craft fairs.

When Terry Speer was a struggling art student in the 60s, he put himself through college by selling his prints and paintings at local art shows. In 1979, after eight years as an art professor, Speer left academia to do the show circuit full time with his wife, Deborah Banyas, a fellow artist and quilt maker.

"I had tenure and benefits," Speer recalls, "but I was miserable. I thought, 'Why am I torturing myself as a professor when I can have more fun doing this and make more money?'"

Speer hasn't looked back once. Today, he and Banyas run a homebased business selling their whimsical mixed-media sculptures at art festivals and craft shows around the country, including the recent Coconut Grove Arts Festival in Miami where they rang up sales of several thousand dollars over the three-day Presidents' Day weekend. Despite an estimated $3,000 in travel and other miscellaneous costs, Speer and Banyas ended up making a tidy profit. Then they packed up their truck and headed home to Oberlin, Ohio, where they stayed for less than a day before traveling to another show in Baltimore.

"This isn't an easy way to make a living," says Banyas, who estimates that the couple exhibits at 12 shows a year. "You've got to be willing to drive a truck and get up at four in the morning."

Still, Speer and Banyas can't see themselves doing anything else. And they're not the only ones who feel that way. Though it's impossible to know how many artists and craftspeople sell their wares full or part time at shows and festivals, their numbers appear to be growing as crowds turn out by the thousands to buy paintings, sculptures, woodwork, metalwork, glasswork and jewelry and to meet the artists and craftsmen who make them. And as Speer and Banyas have discovered, there's real money to be made. Last year, the Coconut Grove festival drew more than 150,000 visitors who purchased approximately $4 million in artwork from more than 330 exhibitors over the course of the three-day show. (Figures for this year's show were not available at press time.)

"I think it's a great opportunity for the public to connect with artists," says Lisa Remeny, a Miami artist whose painting was picked to be the official poster art of this year's Coconut Grove show. "You don't have that in a gallery where people buy from dealers."

For homebased artists and craftsmen, selling at fairs and shows provides an opportunity to ring up sales and find new customers at little cost and no overhead. Typically, shows charge just a few hundred dollars for a booth and allow artists to enjoy big markups on the work they create--profits they don't have to share with a gallery or store owner. But making money at fairs and shows isn't as easy as it seems. It requires research, planning and the ability to keep a smile on your face while standing on your feet for long hours. And that's not for everyone.

"To be successful at shows, you need to have a retail personality and that's not me," says Debra Sachs, who creates fanciful wooden canes with her partner, Marilyn Keating, at their company, The South Jersey Museum of Curiosities LLP in Gloucester City, New Jersey. Even though Sachs says she and Keating made a profit at every show they attended, the shows took them away from doing what they really loved--creating art. "We're doing public art projects now," Sachs says.

Think selling your work at shows and fairs might be for you? Follow these 10 road-tested tips to success:

1. Walk the show. Just because your Mom used to tack up your drawings on the refrigerator doesn't mean your work is professional enough for people who aren't related to you to buy it. First, attend a few shows to see if your stuff is good enough to pass muster. Some shows are juried, which means that judges review your work and select you; others are open to everyone.

It's also important to find the right venue for your work. While an indoor art show may be beyond your grasp, a craft show or Renaissance fair may fit the bill just right. You can find out a lot of information about the shows by talking to artists and craftsmen you meet there. "The best way is to ask other vendors where the best shows are," says Christopher Spelman of Wax Creations in Oceanside, New York. "They'll tell you which fairs to not even bother with."

2. Do your homework. Find out who typically attends the show, what kind of turnout you can expect and how much it will cost to exhibit there. Even though booth space typically costs just $200 to $300--the Coconut Grove festival charges $550--you need to factor in travel costs, shipping costs and the cost of a table, banner and the booth itself. And don't forget the materials costs; for jewelry or sculptures made of precious metals, those costs can add up. And depending on the city or state the show is in, you may also need a license or permit to sell there. It's best to figure out your breakeven point--that is, how many items you need to sell in order to make a profit--before you decide to pack up and go.

3. Start small. Most established artists and craftspeople sell to repeat customers who frequent the same shows every year and often collect their pieces. While you're establishing your reputation and building a following, keep your expenses to a minimum. Speer suggests renting or borrowing a booth from another artist instead of buying your own. Another option is to share a booth with another artist or craftsperson. "Don't invest a lot of money until you're sure it's going to work," he says.

4. Price it right. While cheaper work is easier to sell, you've got to sell a lot more items to cover your costs and make a profit. At the same, an artist selling $10,000 paintings may go home empty-handed. That's why many art show veterans offer a range of price points to potential customers. Biba Schutz, a New York City jewelry artist, sells her work for anywhere from $150 to $900 but offers one-of-a-kind pieces for up to $5,000. "If your material costs you $10 and you double it, you've got a $10 profit," says Schutz, who works in silver, bronze, copper and gold. "If the material costs you $200 and you double that, it's $400. You need to sell less to make those numbers."

5. Bring your credit card machine. Credit cards are the common currency of shows and fairs, and if you don't accept them, you're going to lose sales to vendors who do. You also face the risks of dealing with bounced checks from strangers who may be hard to track down after the show. Especially if you're selling work priced in the hundreds of dollars, credit cards are a must. To find out more about obtaining merchant credit, see our "Resources" section.

6. Don't go it alone. While shows can be exciting and profitable, they can also be physically and emotionally exhausting. That's why it's important to bring along someone to help you work the booth and deal with customers. This will also give you a chance to get up and go to the bathroom and grab a hotdog or something to drink without losing sales. Spelman of Wax Creations works the fairs with his wife. "You need a lot of good friends and family willing to help you," he says.

7. Pack your stuff. Make sure you bring enough work to sell but not so much that you'll have to carry most of it back. Besides your artwork, you'll also need to pack your booth, several chairs, a small table, a calculator, a credit card machine, bags for customers to carry your products home in and any brochures or marketing materials you might have.

8. Put your best foot forward. People like to see a craftsperson creating artwork in his booth, not just selling it. While this isn't always possible, it's a crowd-pleasing idea that works well for jewelry makers, woodworkers, quilters and other craftspeople. At the very least, make sure your display table is clean and attractive and that your products are well displayed with prices clearly marked. Some artists, like jewelry maker Schutz, string lights in their booths and display color photos of their work to spice things up a bit.

9. Build a mailing list. Shows are a great way to develop your customer database. Try putting a fishbowl on your table and offering people a chance to win a piece of artwork in return for giving you their contact information or business cards. Giving away promotional items with your company's name and logo works, too. This way, you can send out postcards inviting prospects to your next show. Don't forget to collect e-mail addresses, too! It's a lot cheaper to send out 100 e-mail messages than it is to pay for paper and postage. "I have some customers who've bought from me every year for 10 years," Schutz says. "These days, I send more e-mails than postcards, and with my wholesale customers, I actually call them."

10. Count your money. Before you move on to the next show, sit down and figure out how much you made on the last one. For example, if you spend $1,000 on this show, did you make $1,000 back? Remember, we're talking about profits, not sales! Don't forget to include the cost of your materials, the booth space, travel, shipping and cleanup. This kind of breakeven analysis will help you figure out if you should exhibit at the same show next year.

Don't be disappointed if you don't make a fortune your first time out--or ever. Except for artists like Speer and Banyas, who sell exclusively through shows and fairs, most artists and craftspeople also sell through galleries, wholesalers, the Internet and other marketing channels. "My best year ever I made $18,000," says Spelman of Wax Creations, who does most of his business at parties and events. "I'd consider making $2,000 in a weekend to be a success. Some people live off these shows; other people use it to market their business."

Helpful Resources

Looking to break into the world of fairs and shows? Check out the web links below to jump-start your business today.

· Festival Network Online. This searchable database of 17,000-plus festivals, arts and crafts shows and other events also offers information on products, services and resources for artists and other vendors. Membership starts at $49 a year. Free demo available.

· Art and Craft Shows. Browse this searchable database of 2,000-plus open-entry craft shows and art festivals by date, city, state and region.

· The Crafts Fair Online. This website offers links to thousands of crafters' websites plus listings of craft shows and information about suppliers, publications, newsgroups, classes, software and more.

· Business Licenses and Permits. This informative article from Entrepreneur.com provides information about permits, state and federal licenses, sales tax licenses and more. Contact your state or local government website for information about local laws and regulations.

· National Craft Association. This trade organization for the crafts industry offers homebased and online craft businesses the ability to accept major credit and debit cards.

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Rosalind Resnick is president and CEO of Axxess Business Centers Inc., a boutique consulting firm for startups and small businesses. She can be reached via her website.

Retrieved on 16^th October 2009 from http://www.entrepreneur.com/startingabusiness/businessideas/article76936.html

Tapping Friends And Family For Startup Funds

written by Cliff Ennico

Make sure you cover your bases before accepting a loan or investment from a friend or family member.

Q: I’m planning to start a retail boutique. I have some savings but not nearly enough to get the business off the ground, and my credit isn’t good enough to get a loan from any local banks. A favorite uncle has offered to give me some money to help me get started. Do I have to do anything “legal,” or is it OK to just take the money?

A: With the economy in the grips of a major recession and credit crunch, many entrepreneurs have little choice but to tap friends and family members for their startup capital. But that doesn’t mean you should treat them like “friends and family.”

Nobody gives you money to start a business. People either loan you money--which you must pay back with interest over a specified time period--or they make an equity investment in your business--buying the right to receive a percentage of your future profits. Without proper documentation, there’s no way of knowing whether your uncle is making a loan or an investment. If your business becomes successful, he will want a piece of the action. If your business fails, he will want his money back with interest.

If neither of you cares about the structure, consider making it a loan--to your company (corporation or LLC), not to you personally--due five years from now. Charge a fair rate of interest (currently about 3 percent per annum), and make sure the loan can be prepaid “at any time, without premium or penalty.” That way, if your business is successful, you can pay your uncle back sooner than he expects, while if your business fails, he can write off the loan as a “bad debt.” As a lender, your uncle won’t have any legal right to manage your business or second-guess your decisions (which he will have if he makes an equity investment). A business attorney can draft a “promissory note” (a business IOU) documenting the loan in about one hour.

Even if your uncle is a terrific guy who sincerely wants to give you money, you should get something in writing--a letter will do--saying that he does not expect you to pay him back at any time. Otherwise, when your uncle dies, the executor of his estate (who may not be such a terrific guy) may insist you pay back your uncle’s “loan.”

Cliff Ennico is a syndicated columnist and the author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.

Retrieved on 3^rd November 2009 from http://www.entrepreneur.com/magazine/entrepreneursstartupsmagazine/2009/october/203528.html

10 Low Cost Weekend Businesses To Start

Retrieved on 16th October 2009 from http://www.entrepreneur.com/slideshow/10lowcostweekendbusinessestostart/157650.html

8 Great Ways To Motivate Yourself When You Just Dont Feel Like It

written by Jason Barr

Motivation is a tough thing, especially if you're in the midst of some difficult circumstances. If you're at all like me, and things aren't going the way you planned, you might have a tendency to fall into a funk. Instead of conquering the world, you might just want to put on some pajama pants, crack open some Ben and Jerry's, and watch TV.

This is a poor solution to your problems.

Seriously, sitting around isn't going to solve anything. You'll end up feeling worse about your situation the less you do about it. And, if you keep up with the B & J, you'll end up with a weight problem, too.

So, how do you motivate yourself if you're not feeling motivated? I think the feelings are key to understanding the root challenge. You're not always going to feel like doing something. You have to lead your emotions, not let your emotions lead you. Take one or more of these 8 eight concrete steps to inject some purpose into your situation.

1. Let Fear Take Hold
Fear is one of the strongest motivators we have. The "fight or flight" response is dependent on feeling fear as its source. So, let fear work for you. If you're genuinely concerned about what's going to happen now that you've lost your job, and you don't know where the money is coming from to pay the rent, you're going to do whatever needs to be done. Issues that seemed to be obstacles before are going to fade to the background.

2. Keep the Finish Line In Sight
A lot of folks have a tendency to look at the next step, rather than the big picture. While this technique has its merits, it's important to look up at the finish line occasionally. If you don't, and you're constantly focused on the day-to-day minutiae, you'll eventually wonder why it is that you're doing what you're doing. It's important to remember the payoff, because that's what got you excited in the first place.

3. Make It a Game
This one works wonders with little kids! If your goal is to clean up toys before bedtime, you parents know that it's often beneficial to race your kids to see who can pick up the most toys in the shortest amount of time. The same thing works with yourself. If you're training for a marathon, you can continually try to improve on your overall time, or your split times, or whatever. Find ways to measure yourself, and constantly try to set personal bests.

4. Remove All Other Options
Hernán Cortés landed in Mexico in 1519 in order to secure lands for the Spanish crown. One of his first orders to his men was to burn the ships that they had arrived on. This was to remove any thoughts of retreat from their minds. When things were going poorly, the men didn't have the option of thinking, "Well, we can always go home". This is a scary step, but sometimes it's the only one that will work. For a person who wants to work for themselves, even if they have developed a substantial business on the side of their full-time employment, quitting that secure day job is a "burn the ships" moment. There isn't anything to fall back on, and they have to succeed.

5. Tell Someone Else
If you have a goal you want to reach, don't keep it to yourself. Be sure to share it with people you respect. Once you've publicly acknowledged it, it becomes harder to give it up. You've made a verbal contract in a sense with people whose opinion you care about. If you were to give up on your dream, you would lose face with them. Most folks don't want this to happen, but because they're scared of failure, they keep their dream to themselves. However, if you want to succeed, you'll tell as many people as you can.

6. Tell Yourself Daily
Make an affirmation to yourself about your goal. For those of you who aren't familiar with the concept of daily affirmations, it goes a little something like this. You write down a sentence or two that specifically details what it is you're going to achieve. You need to make it specific, and you need to keep it short. Then, just before going to bed, first thing when you wake up, and at various set points during the day, you read your affirmation aloud to yourself.

This sounds a bit hokey to some, but it serves to keep your mind focused on what it is you're working toward. It keeps your mind on the task at hand, even when there are many other things that are demanding your attention.

7. Recruit a Group
In the course of telling people around you about your goal, you may run into a few of them that are excited about what you're doing. They may be so excited that they want to do something like it. If you talk to enough people, you'll find some that have goals just like you. You can take the initiative to lead these folks into a group that supports each other in reaching each of your destinations.

By having an accountability group, you put yourself in a situation where you're not only afraid of losing face with the other members, but you also have people available to provide ideas and brainstorm ways to keep going when you get stuck. It's amazing the things that members of an accountability group can accomplish together.

8. Break It Up
While I said that you need to keep your eye on the prize back up in step #2, there's nothing wrong with breaking up your big, huge, audacious goal into smaller goals along the way. If your goal is so big that it scares you, or you worry about not being able to achieve it no matter how hard you try or how many people you tell about it, this may be a good tip for you. Just break it up into chunks. The sub-goals you set for yourself should still be something you can be proud of on their own, but they should also advance you toward the main objective. By taking things in smaller doses, you won't get easily frustrated.

So, here are eight tips to keep your motivation up when you just don't feel like it. It's really all about fooling yourself into doing something that you know is good for you (like eating broccoli with cheese, right?). If there's something I missed, or you have a story about how one of these tips worked for you, share it with the rest of us in the comments.

Jason Barr writes at the personal development blog "Start Being Your Best". Follow him on Twitter here, or grab a subsription to his blog.

Retrieved on 8^th October 2009 from http://www.dumblittleman.com/2009/08/8-great-ways-to-motivate-yourself-when.html