Category Archives: business

The Folly of Putting all of Your Business Eggs in One Basket

When it comes to business and your income, it is not wise put all of your eggs in one basket.  This occurs when you have most or all of your time, energy and money vested into one business or way to make money.   I continually read these sob stories about people that lost their livelihood (and got their feelings hurt) because, for whatever reasons, an income stream dried up on them.

Examples of things that could go awry when you put all of your eggs in one basket:

  • Your Squidoo account is banned or your lenses are locked.
  • A writing platform decides that your posts aren’t high quality and they end up getting deleted without you being notified.
  • A free blogging website determines that you have violated their terms of service agreement in some way and takes down your blog.  There goes your content, the ads, and your readership.
  • Your eBay account is suspended, because too many buyers complained that you sold items “significantly not as described”.
  • PayPal freezes the funds in your account due to “suspicious” activity or just because they want to.
  • Your AdSense account is shut down because of suspected “click fraud”.
  • A major affiliate network that you are a member of changes their terms of service agreement and you are no longer eligible to participate in the program.
  • Amazon Associates eliminates their affiliate program in your state.
  • And, worst of all:  The FTC and attorney general in your state have determined the MLM that you are “affiliated” with is making false claims about their products and defrauding investors and consumers out of their hard earned money.   The government shuts the company down, seizes the company’s assets and the company files for bankruptcy.

Just in case you haven’t figured it out yet, the laws in the United States are fickle.  They can change from one moment to the next.  Something that is completely legal today, may become a criminal offense a week from now.  What will you do if your state or federal government suddenly determines that your business model is based on “illegal activity”?

Did you notice the trend with that list?  Some of those companies can get rid of you and leave you with very little or no recourse.  What it all boils down to, is that you don’t have ownership in those systems, so you actually work as an independent contractor for them (i.e. eBay, Amazon, Etsy, Squidoo, Google).  Don’t let this happen to you!  These scenarios seem very pessimistic and far-fetched, but I can assure you that these situations occur quite frequently.

These income streams are fine if you are in the beginning- intermediate stages of entrepreneurship or you aren’t sure where or how to start out.  Many of the companies that I mentioned above are awesome places to earn some money to supplement your income and to learn some new ideas that you can implement and then later expand on.

I am not knocking them; What I am doing here is “keeping it real”. You shouldn’t get hooked on them like crack.  I have earned money through some of these venues myself.  I have learned over the years that creating your own products/services and setting up residual income streams should be the endgame.

Income streams coming through third parties aren’t that reliable in the long term.  Save your money and reinvest it into something that is yours.  As soon as you are in a position to move on then, that is what you ought to do.  I read a book by Felix Dennis called “How to Get Rich” (affiliate link).  In it he says, “Ownership isn’t the important thing-It’s the only thing”.  Much more money, freedom and flexibility come with complete ownership.

It is so much better to OWN YOUR product/service or to develop YOUR OWN business system, where your livelihood is not dependent upon another’s business model.   You have more control when you develop your own system for making money, where you call of the shots. You create the rules and you get to keep (or release) your customers if you so choose.  You also get to keep more profits, since you’re not splitting your revenues or paying exorbitant fees to a third party company.

When all is said and done, you have the option to sell the business or license your products, when you are ready to retire or move on to bigger and better ventures.  An excellent book that I recommend you to read on the topic of diversification is “Multiple Streams of Income” by Robert G. Allen (Yes, it’s an affiliate link and if you buy something through the link, I’ll make a little money off the sale).  Enough said.

Six Ways to Make Money From Amazon.com

1. Amazon.com is one of the largest online retailers in the world. This company was started in 1994 by Jeff Bezos (and his first employee) from a garage. It grew from such humble beginnings, to earn great trust from consumers and brand recognition. I am an avid shopper of this website and it has certainly gained my trust and admiration! Amazon.com sells products to consumers but it allows regular individuals and companies to sell on the Amazon platform. They take a commission for every sale made through individual sellers. They also offer Amazon FBA, which stands for Fulfillment by Amazon.com.

This website is comparable to eBay’s website, but the last time I checked, Amazon.com was considered the largest online retailer in the world. Whenever a customer buys something from a merchant, amazon.com processes the payment and deposits the money into the merchant’s amazon account. The payment can then be transferred by the merchant to a bank account.

 
2. You can earn commissions through the Amazon Associates Program. It is their affilliate program, which basically allows you to earn money by promoting other people’s or company’s products. You would sign up for the program at Amazon.com and once approved you can put your affilliate links on the internet. When a person clicks through your affilliate link and makes a purchase, you are then paid a commission. Their commission starts out very low at only 4%, though.

 

3. Complete Human Intelligence Tasks (HITs) at Amazon Mechanical Turks at www.mturk.com. This is a crowd sourcing section of Amazon Web Services, where someone places a request for workers (or Turkers) to perform tasks for a set amount of money determined by the requester. The tasks are usually low-paying, tedious and easy to complete. A human being must be available to complete the tasks, so that the tasks can’t be automated. An example of a task that might be requested on M-turk, is checking for incorrect addresses in an internet listing. Workers are paid after the requester deposits funds which go to the worker’s Amazon payments account.

 
4. Create an e-book and sell it through Kindle Direct Publishing: You can self publish a book on this platform and sell it as a digital downloadable copy for Amazon Kindle e-reader. This is an inexpensive, great route to go for a little known author. The author keeps more of the profits compared to royalities that an author would receive through traditional publishing. You can also sell your e-book through other methods and portals (i.e. Facebook, your own website, etc. ).

 
5. Get your book in print on Create Space: This is a website owned by Amazon, which allows authors to design, print a book on demand and distribute it at a reasonably low cost. It is free to register for this website and there are both free and professional (paid) tools and services available to print a book on demand. Authors earn a royalty when a copy of their book is sold. There are also services available for musicians and film makers to sell products through CreateSpace.

 
6. Set up an A-store: You pick the Amazon products that you want listed in your customized A-store. When a customer purchases a product through the store, you earn a comission. This feature works best when incorporated as part of a niche website, rather than standalone.   You can also set up your own e-commerce website using Amazon Web Services for hosting. You will not be paid directly through Amazon.com. It is a platform that allows you to earn money through your own ingenuity, by designing your own website.

 

There are a number of other ways to make money with Amazon.com, but these are the ways that I can think of at this moment. I will post more about this in the future.

© Copyright 2014 Susan Broadbelt

Job Stands For Just Over Broke

Companies are in business to make a profit.  It’s really that simple.  Part of the profit scheme entails, using other people’s talents, skills, and abilities to make money.  So, in order for a company to make a profit off its employees, the company has to pay the employee just enough money to keep the employee coming back for more, so to speak.  This arrangement is an agreement that the company provides employees with and (usually)a steady stream of income, in exchange for the employee giving the company his or her time and labor.

Now, on the surface, there is nothing wrong with this business model.  It is part of the way that capitalisim works.  The business owner will pay the employee what he or she thinks the employee’s time is worth.  The business owner will also consider how much money the business generates, minus the business expenses (overhead, taxes, insurance, etc).  It stands to reason that the owner or executives will pay employees the least amount of money possible for a given job, in order to have a higher profit margin.

For instance, a moving company hires two employees, paying each one $9 per hour.  The owner/manager of the moving company charges a couple $1,500 to move the contents of their 2 bedroom  apartment.  The process takes an entire 5 hours, using only the two employees.   The owner of the company paid the two employees only $90 total for their labor, but the moving company received $1,500 from the couple.  Even after operating costs and expenses are deducted, the company still manages to make a decent profit.

Years ago, a prior employer gave me a 20% raise, since I was doing “such a great job”.  This sounds higher than typical, but a 20% raise only turned out to about $1.8 cents more per hour.  I am very certain this is all that my former supervisor was able to offer me.  The department had a certain amount of money alloted to bonuses and annual merit increase.  So, I feel that she was being truthful.

At the same time, I feel that the company executives are full of baloney.  They leveraged all of my hard work,  and paid me pennies for what they made off of me.  I don’t harbor much resentment, because that is the way that business works.  I understood this when I accepted the position.  That main point that I am driving at here, is that when you work for someone else, they put a ceiling on what you earn as their employee.

My philosophy about jobs is this:  Unless the job is a high paying career or profession, it is really just a means to an end.  A job is a parking space, until you can move to a parking space that gets you closer to your destination. You should take a job, knowing that your tenure there is not gauranteed and knowing that you will not get rich from it.  Do your best when working for someone else.  Do the work that your boss pays you to do (and perhaps then some to keep your job). But, always be looking for a side hustle and plan an exit strategy in advance.

Start a Business with Little or No Debt

I was watching an interview of billionaire Mark Cuban by Bloomberg, about business.  If you are a basketball fan, then you probably know that he is the owner of the Dallas Mavericks.  He is also an investor on the reality show, “Shark Tank”.  All of that aside, he said something during his interview that goes against the grain of what novice business owners probably think about business ownership.  He said, “First of all, if you’re starting a business and you take out a loan, you’re a moron”.

Mr. Cuban was a little harsh and abrasive in his wording, but in general, he is correct.  People spend too much money getting their business started.  They put themselves heavily into debt and deplete their savings in order to get their business started and to sustain it. Depending upon the industry that is entered, a small business can be started with little or no money.  Some types of businesses may require a small loan in order to get started, but it is not very wise to take on massive amounts of debt.

Should a new business owner decide to incur debt to start a business, these conditions should exist prior to starting that business:

  1.  The business owner needs to have a very thorough understanding of the market that he or she is getting into and the competition.  In other words, do the research.
  2. The business owner needs to have a solid plan and objective for the business.  Some people manage to fake it until they make it, but this is not typical for a successful start up. In other words, know what you are doing.
  3. Have some customers willing and ready to buy.  In other words, if you take out a loan to start up, you better make sure that the business will generate enough money to cover your business expenses and living expense.

The idea that you must use OPM (other people’s money) in order to start a business, is an old, outdated idea.  The first few times that I heard the words, were from Donald Trump’s lips.  OPM is usually borrowed money from banks or investors. Honestly, I don’t think that this idea works too well in this economy (for small business owners).  Banks are hesitant to loan money to individuals or businesses unless the loan is backed by good credit, a high income, and/or valuable collateral.

There is a common misconception that a business should be some sort of complicated, sophisticated operation.  Nothing could be further from the truth.  I think that this myth is a major factor in why people may believe that going into debt to start a business is the norm. A successful business could consist of just one person or a small group of people.  If you dream of running a mega corporation, then start small, set some of the business profits aside and parlay some of your profits into bigger and better projects.

The basic key to starting a business with little or no money is to start small and make sure that you minimize business expenses and overhead.  So you should try and avoid or minimize spending on rent, utilities, and unnecessary niceties that give you the illusion of business success. That is why a home based business is one of the least expensive forms of business.  You could even make your “office” a Starbucks and a laptop.

Another way to start a business with little or no debt is through forming partnerships, outsourcing and bartering. In all of these business relationships, you are basically leveraging the power of other peoples’ efforts.  It may also reduce dependence on full-time employees. This will save a lot of time and money.

A nice quick-read, that delves into starting a low-cost business is “The $100 Startup”, by Chris Guillebeau.  It lays out an easy to follow blueprint for starting a business by serving others and providing value. Most of the people that he interviewed for the book, were “unintentional entrepreneurs” , who started a successful business with under $1000.  There are plenty of jewels and nuggets throughout this book.  If you don’t learn anything else, know that the author’s definition of a business is this:  offer a product or service (of value), that people are willing to pay for, and have a method to be paid.

Link to the video that I refer to:

http://www.youtube.com/watch?v=KYneLGRTgy8

© Copyright 2014  Susan Broadbelt

Make Some Extra Cash on Fiverr.com

Fiverr.com is a website where people can sign up to buy and sell Gigs for a base price of $5. A Gig is simply a task or service offered by a seller on Fiverr.com. The thing that sets this website apart from similar websites is that sellers may offer Gigs ranging from the mundane to bizarre and outrageous. Almost anything goes (of course users must operate within the terms of service agreement).

The seller is limited by his or her own imagination. A Gig buyer might also be able to work something out as far as modification of the Gig. I have purchased a few Gigs on this website and they worked out well. I am considering further use of the website by selling my own services. The following are examples of Gigs that I have seen offered on the website:

  • Graphic artistry (creating web banners, editing photos, digitally produced drawing, etc)
  • Transcription services
  • Proofreading and copyrighting services
  • Writing essays and website content
  • Voice over work
  • Crafting
  • Internet marketing and SEO consulting

Here are some of the more strange and unusual types of Gigs that I have seen offered:

  • “I will get ghetto on video.”
  • “I will translate your message into Jamaican patois”
  • “I will do an impersonation of Christopher Walken”
  • “I will do an impersonation of Robert DeNiro”
  • “I will hold your company logo and take fun photos”

These are just a few of the things that people are willing to do for only $5. The way that sellers receive payment is through PayPal or via a Fiverr Revenue car. The seller receives $4 into their account after a Gig is paid for and completed. Fiverr receives $1 out of the five dollars earned by the seller. PayPal also, charges a small percentage of the $4 deposited into a PayPal account.

 

 

Five dollars does not seem like much money. It does add up quickly for the seller that is able to build up a large base of repeat customers. The marketplace on Fiverr is very competetive. Good marketing and word of mouth advertising are useful tools in winning more business on Fiverr.com.

 

There several sellers that are able to make a full time living from Fiverr.com, but I think that the majority of sellers probably earn a part-time income there. It is evident that sellers with feedback in the thousands have made thousands of dollars through Fiverr. The most successful sellers offer a very unusual service or products, which are not easily replicated, thus minimizing competition in the same niche.

 

The website has a ratings system, and buyers are able to leave feedback about their experience. Sellers that provide consistent great service, will naturally receive good feedback and the opportunity to offer “Gig Extras” for more money than the basic $5. There are some people that are able to upsell Gig Extras, that cost $5 to $100 or more. Some people also make money through purchasing Gigs on Fiverr and then reselling the service at a premium. It is a form of arbitrage and I wouldn’t recommend it unless you know what you are doing and you find a reputable and reliable seller on Fiverr. I think that is where the real money is.

 

If you decided to sell a Gig on Fiverr, be sure to create a very thorough description. Spell out exactly what you will do as part of the service that you offer, as well as limitations. It is best to suggest that buyers ask questions prior to placing an order. Always make customer service and getting Gigs completed as quickly as possible a priority.

 

I placed a few Gigs on Fiverr and the next day, someone placed an order for my service. The Gig was cancelled, because the purchaser wanted much more than what I offered through the Gig. So far, I’ve had positive experiences with the sellers that I did business with. I bought a Gig and was very satisfied with the level of service that I received. Let’s see what happens with this website.

 

© Copyright 2013 Susan Broadbelt

Can you run a small business under the table?

Disclaimer:  I am not an attorney, financial adviser, or an accountant.  The information provided here is mainly commentary.  I encourage you to do your own research and seek the advice of qualified and licensed professionals.

Some people run “under the table” when operating a small business.  What I mean, is that they don’t advertise their small business and rely on word of mouth.  They run on a cash only basis and they don’t report their earnings to the IRS or the state government if required.  Some people that run businesses under the table might be able to get away with it for a long time.

 

At some point, if the business owner operates long enough, he or she will be caught and reported. The obvious advantages of operating a business under the table is that business owner chooses to evade the red tape of obtaining business licenses, forming a legal business structure, getting insurance, collecting federal taxes, and Social Security taxes from employees, etc.  So people that don’t want to go through all these hassles and headaches may choose to evade the system.  They save themselves lots of upfront costs and time in the beginning.

 

Obviously there are both advantages and disadvantages to running a business this way. One disadvantage to operating a business under the radar is that if the local government finds out, the business can be shut down.  On top of that, the government has the authority to levy fines against a business owner operating without the proper license.  It is a minor inconvenience to have to go through the trouble of obtaining a license from your city, county, and or state.  At the same time, a business license does not cost much and it will go a long way towards protecting the business owner from inquiries by the police, code enforcement officers, or other government officials.

 

Another disadvantage that I see with operating a business under the radar is that you forfeit tax benefits.  There so many tax deductions available to business owners that would reduce a businesses tax bill.  A few that I can think of off the top of my head are the Keogh plan and the SEP-IRA.  Both of these are tax-deferred retirement plans for business owners.  They both allow the business owner to contribute more money to the each plan, per year than the traditional IRA.

 

Receiving tax deductions from the IRS or state government entails filing business tax returns and keeping very meticulous records.  Business owners have to know where all of the money is flowing to and from in the business.  Business owners are wise to keep good records in the event of an audit, also.

 

What about liabilities?  Depending upon the type of business that you run, you may need to obtain liability insurance to cover your business and your property.  Most reputable insurance companies will want proof that you are operating a legitimate business before providing coverage.  The last thing that any business needs is a lawsuit or some sort of catastrophe that threatens to deplete the business’s financial resources.

 

Many cities, counties, or states will require businesses to collect sales tax from customers for products sold and services rendered.  Of course, this depends upon what the local ordinances and laws are in the state where business is headquartered. Also, business owners need proof of income at some point in order to obtain credit.  What if you want to purchase a home or a car? What about renting an apartment or applying for a credit card?  These things all require some sort of proof of income. A business owner operating under the table, won’t have enough proof or documentation to get credit.

 

You probably don’t need to form a legitimate business if you are engaged in a hobby and aren’t making much of any money at all.  It all really depends partly on the type of business and what the laws are in your jurisdiction.  Some types of businesses do not require a license and may not be regulated by the state or local government where the business is located.  You will have to determine for yourself whether the risks of operating a small business under the table are worth the reward.

© Copyright 2013  Susan Broadbelt

www.cashmoneyhustle.com