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If you are trying to start a small business,my advice is go with the low-hanging fruit,which simply means pretend you are a monkey. Do you want to climb all the way to the top of the tree to find a banana? Maybe, but that’s only because some smarter monkey already grabbed the bananas on the lower part of the tree, barely had to even stretch their arms to get a great breakfast. Everybody has some low-hanging fruit and you would be crazy not to reach for it first.

This exercise is called “Who Do You Know?” and it works.

You aren’t seriously going to tell me you don’t know anyone who needs to buy a product you could supply are you? Basically, you review a guided list and discover how extensive your personal network really is. Do you know anyone who matches these relationships or occupations?

Family Members - These people are probably your closest connections,not only do these relationships and roles vreate product needs, these close contacts also have their own businesses and interests that quickly expand into a new web of potential connections

• Father
  Mother
  Grandmother
  Grandfather
  Brothers
  Sisters
  Aunts
  Uncles
  Cousins
  Girlfriend
  Boyfriend

Hobbies and Interests - This is a powerful motivating force forpurchases and specialty items, and even better almost everyone you know has a high level of expertise in some hobby or interest,unless they just watch TV all day. There are a lot more than this, but this is a great start.

1. Aerobics
2. Antiques
3. Art
4. BibleSchool
5. Bicycles
6. Books
7. Boys Club
8. Cameras
9. Camping
10. Fisherman
11. Girls Clubs
12. Girls Clubs
13. Golfing
14. Gymnastics
15. Handicapped
16. Hunting
17. Helath Club
18. Karate
19. Miniture Golf
20. Music
21. Painting
22. Pets
23. Photography
24. Religion
25. Scuba Diving
26. Sewing
27. Skiing
28. Soccer
29. Softball
30. Volunteers
31. Wine
32. Woodworking

Professions and Jobs - Most everybody has one unless they just sit around watching TV all day.

Accouting
Acting
Advertising
Air Force
Airline
Alarm Systems
Architect
Army
Auctoneer
Babysitter
Banking
Barber
Beauty Salon
Bookkeeping
Brooadcasting
Brokers
Builders
Buses
Cable TV
Credit Union
Day Care
Dentists
Dermatologists
Designers
Detectives
Diet Industry
Direct Mail
Disc Jockey
Doctors
Dry Cleaners
Electrician
Engineering
Entertainment
Eye Care
Farming
Film & Video
Fireman
Florists
Food Service
Furniture
Gardens
Gift Shops
Government
Grocery Stores
Hair Care
Handyman
Helath Insurance
Hospitals
Hotel
Income Tax
Insurance
Investments
Janitor
Jewelry
Lawn care
Leasing
Libraries
Loans
Lumber
Management
Manufacturing
Mechanics
Mobile Homes
Mortgages
Motels
Movie Theaters
Museums
Navy
Newspapers
Nurses
Nutrition
Office Machines
Office Furniture
Optometrists
Orthodontists
Pediatricians
Pedicures
Perfume
Pest Cintrol
Pharmacies
Phones
Pizza
Plumbing
Police
Pools
Preschool
Printing
Property Management
Psychiatrists
Publishers
Radio
Railroads
Real Estate
Rehabilitation
Rental Agents
Reporters
Resorts
Restaurants
Roofing
Sales
Satellites
Secretaries
Security
Shoe repair
Signage
Social Services
Sporting Goods
Steam Cleaning
Surgeons
T-Shirts
Teachers
Telemarketing
Therapists
TitleCompanies
Towing
Training
Transmissions
Trucking
Unions
Universities
Vending
Weddings

Yep,these are long lists but this kind of data mining of yourown big juicy brain can really pay off. Find out who you know explore those connections and see if it doesn’t give you an idea you can use.

How To Find Buyers For Your Imported  Products

The standard way to run a business is to select a product, find the market you can sell to and adapt as necessary to that buying population’s needs. But, you can escape the competition if you disrupt that process and work a better, less exploited angle. Why not go the opposite direction, find buyers, get their product needs and then get a product that meets their needs.

I am lucky in that I am easily interested in the details of other people’s occupations. If I’m at a party or a wedding, I am likely to engage the person next to me in a discussion about what they do. For me this is fun, but it is also away to investigate and find underserved markets. Toward this application,ask these people what kind of products they need, or that are popular that are imported,or difficult to find. A good friend of mine overseas, was talking about the popularity and low quality of the health pamphlets in local pharmacies. That kind of marketing intelligence is pure gold. He was actively looking for people that could produce pamphlets on a wide range of health topics, that he could bundle with simple displays and offer to local pharmacies.That’sexactly the kind of vacancy that you could never find out about without talking to your contacts and if you were in a position to move on it,could make you a killing,

If you meet a service provider or advisor like a banker or accountant, ask them what kinds of needs their customersare frequently seeking.My accountant has recently gotten into the insurance business, why did he do that? Because,he recognized that many of his customers had the need, but who wants to go out actively seeking insurance quotes? Nobody unless they absolutely have to. That’s why the TV is full of advertisements touting how incredibly easy it is to get a good quote.  Because they know you will probably go without insurance rather than seek out the unfamiliar market and try to navigate it on your own. An insurance product that meshed with small business needs and could be competently sold by a CPA means you have a powerful influencer advisor working for you.

Visiting flea markets is one of my favorite ways to get ideas. You can see a lot of shoppers quickly and really get an understanding about what they will plunk down hard cash for, at a wide range of price points.

Take a look at the attendance figures for trade shows to find an expanding market. According tothei Trade Show Week article about 2007 trade show attendance, the consumer trade shows are hurting but motorcycle shows, specialty recreation shows (like snowboard shows) and pet industry shows grew like crazy.

Get to know your local retailers and find out who they are buying from. That’s the 2nd best ways to find a wholesaler (the best way is linked).

Why would someone buy from you?

The best way to get someone to make a purchase from you is if they know you and trust you.That’s why its always a good idea to treat your friends fairly. They don’t know you when you cold call.They don’t know you if you shout at them as they walk by your storefront or your trade show booth. The quickest way to be successful is to find someone in your country or someone in the world who will invite you to be their supplier. Often its an item that anyone could get but it’s too much bother for them to worry about. This is an opportunity, bundle this customer with other customers and sell them the same item and you have a channel.

Thousands of foreign buyers visit this country every year, looking for products they need for their businesses abroad. You go to a show with foreign buyers and you pay attention, these buyers get together, buy each other drinks and talk about their problems. Their problems are oftenr your opportunities. When you hear someone talking about the problems sourcing a quality item,get their contact information, don’t let an opportunity go by the wayside. Whatever country you are in, brokers are used by foreign businesspeople. Brokering import and export purchases is not difficult to do, in fact its competitive for precisely that reason. It’sjust competitive to land the business,so keep your eyes and ears open at all times.

You Can Easily and Cheaply Open a Bank Account for Your Small Business 

No matter what form of business organization you choose, you should probably open a bank account dedicated toyour small business. There are nominal costs, my bank charges about 6 bucks a month. If you are importing or exporting,go with a national bank because you may need assistance with international payments and other issues that your neighborhood bank won’t be up on.If you are working with foreign wholesalers, you will want one that can issue letters of credit etc. which really means a large international bank like Citi, Bank of America or Wachovia.

You may or may not need a big initial deposit to open a bank account, but if you want to open it with $10 or something very small, their acceptance may well depend on your personal credit history. I usually open it with the first proceeds of my business.  The current climate may affect this but I would try to open it and apply for a revolving line of credit at the same time.

Revolving line of credit - The bank will loan you money and as soon as you have paid it back or a portion of it, you can borrow against it again, or borrow against whatever portion is available. It’s just a credit card,but its been around a lot longer and it’s probably going to increase faster and do more to establish you as a serious business.

Just go to the bank with identification ad a copy of your business organization documents, including any state filings.If you have an S-corp, bring your EIN and sales tax permit if you have one. If your state requires a corporate seal, bring that too.

You can build a good banking relationship by

• introducing yourself to the bank manager(s) and establishing a personal relationship
• never bouncing a check

Your bank will also become a source of timely loans,and other services like credit card processing and payroll, they get into everything now.

Limited Liability Company

The limited liability company (LLC) is a relatively new form of business organization in the US, but is available in every state. You can pay taxes as an individual and you have good liability protection. Check your state, but mostly you must have at least 2 owners to form an LLC. You issue sharesof stock but stock certificates are not required. An LLC is a great choice for a small company if you have foreign owners or investors, as they are restricted from participating in an S Corp.

An LLC files Articles of Organization with its home state rather than the Articles of Incorporation that a corporation would file. An LLC in some states has a built in dissolution date i.e. the comapny can’t have an unlimited duration, but states are examining this and many of them are changing the laws.

A key component to the Limited Liability Company is a separate document called the Operating Agreement (or Management Agreement). You can file a pro forma operating agreement easily enough butin general you dowant tospellout the obligations of the members of the company in some detail,this is where your lawyer makes his money:)

Pass through taxation is really the chief benefit of the LLC. You can reflect the profits or losses of the company in their entirety on your personal income tax returns this means that you will not suffer double taxation on corporate profits.

Like I said, check your state but if the fees are not too much (I’m looking at you California) then an LLC is often the best choice for a new company with multiple owners.

Relate Posts on Other Blogs:

How to Become an LLC

Six Different Types of Public and Proprietary Companies

The Corporation isn’t just for the Fortune 500

We’ve already covered the 2 types of business organizations that are easy to set up, the partnership and the sole proprietorship. A corporation requires a little more work to formally create but carries separate advantages from these. Unlike the other two,a corporation creates a separate legal entity, (corpus), and it can raise money by offering shares of stock to investors. It also can continue under new ownership if the original owners separate from the organization.

Corporate ownership protects your personal assets against advers legal action. So if a product you distribute injures someone,the damages that might result against you would not impact yourpersonal assets, such as your home. However, it will not always protect your personal assets. You generally can’t rely on this protection if you are found to have incorporated solely to shield yourself from a particular liability.

You register your corporation with a state government for a nominal fee. These forms are usually available for download — here is a list of incorporation forms by state. The forms are simple enough but there are several variant types of corporations that you can form,”stock”,”non-stock” etc. These choices impact you in many ways,and you should definitely consult a lawyer or accountant about which makes sense with your individual situation. I would strictly avoid companies that advertise on the internet to assist you with setting up a corporation. They charge just as much as an independent lawyer would, and they are essentially no better than you doing it yourself. A former business partner insisted I use one of these firms and they were expensive,unnecessary and ill-suited to an individualized situation. So learn from my mistake.

Incorporating in Delaware or Nevada is a popular notion because of a perception that they have friendly taxes, lower cost and greater protection from liability. Youdon’t really need to do this. For the most part, you will still have to register as a foreign corporation in the state where you do business,which will negate likely negate any savings you incur. And the record-keeping and compliance burden is doubled.

The corporation pays taxeson its net profit. It can hold on to some profits for expenses and then distributes the remaining profits to shareholders as a taxable dividend.

If you dealwith products that are dangerous in any way,you should incorporate from the beginning of your business. Be aware that almost any commercialproduct can be dangerous in the wrong hands. Have you ever seen the statistics on children who drown in five-gallon buckets?

A customer with a grievance is going to sue whoever is closest at hand and probably work up the supply chain as far as their attorney feels it is actionable.

A variation that might work for the independent businessperson is the Subchapter S Corporation or “S corp” The S stands for “small,” You incorporate and then you elect the S version. This variant restricts the number of owners, public stock offerings and other matters,but protects you from liability and still allows you to pay the business taxes as personal income taxes.

Related Posts Elsewhere:

Make That 1000 Shares

Ten Decisions You Need To Make To Become Rich