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Melissa is a wife and work at home mom to 2 children ages 4 and 2. She is a Medical Office Assistant, but because she is thrilled to be at home with her children writing, she’s not sure when she will return to work in the medical field. She is also the proud owner of Writing From Home, www.writingfromhome.com, a business offering clients writing, copywriting, ghostwriting, and proofreading services. If you would like to use her business column on your website or in a newsletter, visit her website and click on the business column link for more information.
January 19, 2008
All over the world, every single day thousands of people turn their small business ideas into reality! All of them want to be successful small home business owners. To convert ideas into a home business is one thing, but to get the business efficient and successful, is a different match.
There are some success factors that you can’t afford to ignore, if you hope to succeed with your small business ideas :
You have to be confident and have a lot of self motivation
One of the most important success factors is that you believe in yourself.
When you believe in yourself, you can succeed and remain self motivated through the humps and bumps.
To turn your small business ideas into a successful home business you have to Work hard
Once you are confident that you can achieve your goals, It’s time to put yourself in gear.
To beat your competitors, you have to keep on working while others have stopped, sleeping or are enjoying themselves. This is easier said than done, but success only come to those who are prepared to do what it takes.
You will need ability to achieve your goals
Your small business success will only come if you can achieve your goals. For many people, the main obstacle for this success factor is procrastination. You can’t prolong or hesitate. If you allow this to happen, your success will be only a dream.
You need to develop a capability to take Risks
This is a very important success factor. If you are not prepared to take a reasonable amount of risks, you will never achieve success with your small business ideas.
If you wait for everything to fall into place before you take the plunge, the day will never come.
Prepare yourself to take that reasonable amount of risks.
At the same time you have to develop the ability to make a correct judgment.
You need to keep yourself updated about your small Business
The next success factor is to be knowledgeable about your business. You have to educate yourself
and keep abreast with the developments in your business area.
Keep your temper balanced
Once you decide to start your own small business, you take a certain amount of risks. Things will not
always turn out the way you want. There will be periods of ups and downs and highs and lows.Even if this is just a phase you have to get through, it is only when you have a balanced temper you will be able to carry on and convert your small business ideas into a successful home business.
Summary :
You don’t have to possess all these success factors from day one.
You will develop these over a period of time, through hard work commitment and persistence. If you
believe in yourself and remain motivated, you will acquire the necessary skills for a successful small home business.
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Ove Nordkvist is the Founder of the web site small-biz-ideas.net
where you can get help with ideas, tools and resources to start a small business.
You can download free Masters Courses for a variety of small business ideas at
www.small-biz-ideas.net
January 6, 2008
Starting a business does not always require a large initial financial investment. Careful and creative management of currently available funds can go a long way towards providing needed capital. A disciplined person possesses the potential to become a financially successful entrepreneur. The key to financing your business with little initial cash outlay is to become your own banker.
Realistically, you should have some amount set aside for start-up expenses. For example, let’s say that you have $2,500 to invest in starting your business. Calculate upcoming major expense items and set aside a certain amount for each one. Think of that item as having its own line account. You may want to go as far as to set the money aside in a specific envelope. Plan to use these funds for the designated purpose only. The amount may not be enough to cover the full cost, but it is a start. You must now determine how you will raise the rest of the required amount.
Perhaps, a major start-up expense is a piece of equipment that costs $3,000. You have set aside $1,000 for this outlay in your calculations. What are possible ways to acquire this item? Maybe you can purchase the equipment with a $1,000 deposit and work out a payment plan. Or, possibly you can negotiate a lease agreement. The goal is to initially not spend more than you have set aside, with the plan to repay the balance of this debt from future income.
As your allocation of initial funds for expenditures method becomes more sophisticated, begin to add accounts. Set aside envelopes for major future expenses. As the business makes money, add incremental amounts to the envelopes. Slowly, you will approach having saved the full amount needed to cover those expenses. Continue to tackle upcoming costs in this manner.
When the business receives income, it must be allocated to your outstanding expenses. Add to those envelopes and do not renege on these allocations. This is where discipline comes into play. When you put money into a future expense envelope, those funds become dedicated to that item. You’ve become your own banker by setting up individual savings accounts for each expense.
You are now also in the position of taking on a bank’s function of lending money. If you are saving for a large future upcoming expense, you can borrow from that account to cover a more immediate expense. Because you are borrowing from yourself, you save the added expense of finance fees or interest. Again, it requires discipline to return borrowed funds to their designated purpose.
On the other side of the coin, you must develop and stick to a strict payment plan for all outstanding debt. This applies to both paying off creditors as well as replacing money borrowed from an envelope. When you systematically work at it, debt will eventually disappear.
I once began a business with $12,000 outstanding debt in addition to my start-up expenses. An arrangement was made with the creditor to pay off the debt in installments of $500 a month for two years. With careful planning and sacrifice, I was able to meet this commitment as well as grow my business at the same time. The secret is to control your debt, not let it control you.
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Written by Brenda Weathers Hargroves, small business coach and author ? Brenda’s consulting firm, Business At Hand, is located in Lutz, Florida. Her mission is to share successful methods for implementing and operating a small business or social entrepreneurship venture. She offers individual/group entrepreneurship coaching sessions, small business workshops/seminars and encourages book signings.
To contact Brenda for assistance call (813) 962-8918 or send an email to businessathand1@hotmail.com. To purchase her book, The Heart and Soul of Entrepreneurship, or for more information about her services visit her website at http://www.businessathand.biz
January 5, 2008
A seasoned mechanic places his frequently-used tools in the top drawer of the toolbox. Make sure you stoke a supply of verbs in your Chief Marketer?s toolkit.
As head of marketing for your small business, you will no doubt be charged with producing copy for your company?s marketing efforts. Notice we said produce; some of you may hire out the actual copywriting, but it?s impossible to escape your responsibility of copyreading. You simply can?t duck it–you are in charge of the final copy produced under your direction either by an employee or an outside freelancer or agency.
Why? Because you are accountable for the sales that copy generates. The only reason to write one word about your business is to sell your product or service. No other motive exists.
In a future article we?ll cover a checklist of items to review in your copyreading duties, but today we introduce one important weapon in your copy arsenal: Verb Scanning.
Many of us follow events via newspapers or trade journals or magazines or internet news sites. If you are like most people you scan the headline and maybe the lead paragraph; those two story components supply you with enough information to keep current on events in the world and your industry. If an article catches your interest, obviously you read more.
But, there?s another valuable technique to pursue as you read your local news: scan the verbs.
High-octane verbs energize writing and compel the reader to keep moving through your marketing message. Most news just isn?t that exciting. Think marketing your product or service is a tall order? Try dredging up interest in a tired story like a long, drawn-out war or the ongoing battle with global poverty. A well-written newspaper article tows us through the news with style as much as content.
And the verb is absolutely key here. Adjectives are amazing aids in embellishing our story, but verbs thrust the story forward. Hyped-up advertising copy overworks adjectives and under-employs verbs. Effective copy engages the reader via the verb.
So next time you are reading that newspaper or trade journal, instead of merely glancing at headlines and lead paragraphs, take a marker or pen or highlighter and circle some of the better verbs the journalist hires to carry the load of pulling you through the story. Highlight those verbs that have an emotional or sensory connotation. You know how important it is to involve the prospect in the sales process; powerful verbs link the reader?s analytical mind with her senses, emotions or memories.
Jeremy Grant?s September 7, 2006 Financial Times article, ?More than 100 groups face probe on options?, employs the following verbs in the first four paragraphs: ?swelled?, ?thrust?, ?emerged? and ?struck?. Grant?s sprinkling of these verbs in the beginning of the article propels the story along while subtly elevating the reader?s perception of the story?s importance.
Just look at those four verbs in their present tense: swell, thrust, emerge and strike. Don?t those all carry connotations way beyond their presence in a business daily? Can you see where bringing to bear these expressive types of verbs in your marketing copy can bond your readers emotionally closer to your brand?
If your few minutes spent each week scanning the newspaper for effective verbs lands even a few more sales, you’ll be well-paid for your time.
Remember: Brand (who you are) + Package (your Face to the Customer) + People (customers and employees) = Marketing Success.
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Craig Lutz-Priefert is President of Marketing Hawks, a firm providing essential marketing vision for small business. Marketing Hawks also sponsors the ongoing small business adventures of entrepreneur Crystal Trino at JourneyToday.
If I were asked to associate one word with entrepreneurship, that word would be consistency. Consistency is the thread that runs through all discussions about entrepreneurship. Every aspect of successful business ownership requires practicing this trait.
Effective marketing is a result of consistent networking. Review upcoming events; check your calendar and if you have the time, plan to attend as many events as you can manage. Many times just showing up can be a positive experience. You might make a new contact, or run into someone you haven’t seen in a while, or see someone you’ve been planning to speak with about a specific topic. Many times you will leave an event feeling satisfied with your decision to come, despite misgivings.
Constantly attending community affairs helps you to feel more comfortable about working the room. It helps you to overcome the discomfort of entering a place where you don’t know anyone. After a few times in this awkward situation you will learn to introduce yourself and initiate conversation with almost anyone. It is also important that you constantly collect business cards and continuously update your mailing list to reflect new contacts.
Your business develops its brand by the way you interact with the public. And we all know the public can be fickle. If your company continuously provides the best service or product possible and is consistently fair and honest with its clients, the word will circulate. You are likely to be the proud owner of a business positioned to stand the test of time.
How are things looking internally? Does your backroom operations run efficiently? Do you meet deadlines you’ve set for yourself? Or, are you constantly trying to finish tasks at the last minute? How are you at showing up on time for appointments? Do you arrive 5-10 minutes early? Or are you 5-10 minutes late because you couldn’t find your keys?
Developing a consistent system for managing your business is crucial. Notice, I did not say a standardized system. The way you manage should be whatever successfully works for you. As long as you are comfortable that your system meets your business goals, keep on doing what you are doing.
Let’s go back to discussing the public, your target audience. We all know that the more a slogan or logo or any distinct item is ingrained in people’s minds, the more comfortable they become with its associated product or service. Consistently present something to your audience in the form of advertising. It does not necessarily have to be a slick logo or catchy slogan, you can offer a newsletter, a giveaway, or host a community event. As long as you routinely make whatever you’ve chosen available and develop a reputation for providing that particular item, you are encouraging a form of branding for your company.
The success and endurance of a small business depends on many variables. It is the owners who continuously set and achieve goals and possess constant faith in their business who generally achieve personal gratification from their entrepreneurial attempts. Remember, consistency is the key.
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Written by Brenda Weathers Hargroves, small business coach and author ? Brenda’s consulting firm, Business At Hand, is located in Lutz, Florida. Her mission is to share successful methods for implementing and operating a small business or social entrepreneurship venture. She offers individual/group entrepreneurship coaching sessions, small business workshops/seminars and encourages book signings.
To contact Brenda for assistance call (813) 962-8918 or send an email to businessathand1@hotmail.com. To purchase her book, The Heart and Soul of Entrepreneurship, or for more information about her services visit her website at http://www.businessathand.biz
If I hear the expression ‘Think Outside the Box’ one more time, I think I will explode. When faced with this challenge, where do you go from there? Below are five outside-the-box practical business tips.
1) Barter your services in exchange for assistance with your business. I know a businesswoman who is the queen of bartering. She develops mutually beneficial arrangements to swap services for both her business and personal needs. She has even worked out a way to provide services in exchange for getting her hair washed and styled and her nails manicured. This way, she ensures that she can remain attractive to her audience. You will be surprised at what satisfying deals can be struck by using your imagination. A word of caution - always assess whether the agreed upon terms merit a written contract to protect all involved parties.
2) Subcontract with other vendors. While this is not a new concept, business owners tend to overlook or shy away from this method of increasing sales and exposure. We are afraid that we may lose business to a competitor. But what if you are vying for an account whose needs exceed your capacity to supply?
For example, two small employment firms may want to share job orders using some discretion. An increased applicant pool enhances the possibility of providing a client with desirable candidates. The key is to carefully assess the benefits and disadvantages of entering into the arrangement. If both parties decide to move forward with collaboration, a well-crafted non-compete agreement should resolve any potential problems.
3) Sponsor or co-sponsor an event. This is an excellent advertising technique that does not always have to result in a major expense. In addition to financial support, a community event may need a service you can readily supply at little or reduced cost. Sponsorship recognition is many times a very effective and inexpensive form of marketing.
4) Develop simple personal systems to make life easier. We all have many details to attend to in our lives. They can become overwhelming if not successfully managed. My first job after college required finding answers for more people than I had ever been accustomed to working with at one time. I decided to date and list the requests and any associated information in a spiral notebook. Once an issue was resolved, I would draw a line through that request and move on to the next. I kept the notebooks for easy referral.
One of my clients recently complained that she was having difficulty remembering to track her mileage. After reviewing several options, she decided to keep a small notebook in her car to record her mileage. The secret of her success was to not only leave the book in her car, but to place it in a spot where she would see it when starting or turning off her vehicle. This served to constantly jar her memory.
Simple solutions can sometimes help you overcome major and minor obstacles.
5) Do something for your business every day. When discussing his business, my mentor always said ‘You gotta love it until you finish it’.
Make it part of your routine to cultivate your business in some manner every day. I’m not suggesting that you perform major tasks seven days a week, but do something, however small, every day. Make a phone call. Draft a letter. Think through a process. Spend some time reflecting upon your business when you are feeling refreshed and invigorated. If you are an early riser, you may find the morning a perfect time to exercise this habit.
These five suggestions have the potential to make both small and large contributions to the success of your business. I’m sure you can come up with others. You just have to think outside-the-box.
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Written by Brenda Weathers Hargroves, small business coach and author ? Brenda’s consulting firm, Business At Hand, is located in Lutz, Florida. Her mission is to share successful methods for implementing and operating a small business or social entrepreneurship venture. She offers individual/group entrepreneurship coaching sessions, small business workshops/seminars and encourages book signings.
To contact Brenda for assistance call (813) 962-8918 or send an email to businessathand1@hotmail.com. To purchase her book, The Heart and Soul of Entrepreneurship, or for more information about her services visit her website at http://www.businessathand.biz
December 14, 2007
Imagine yourself walking past a row of shops on a street. Some of the stores you walk by without even a glance. But one catches your attention. Something in the window makes you stop for a moment to take a look.
Something has grabbed you and pulled you out of your conversation, or train of thought, and stopped you. Just briefly. Long enough to think, ‘I like that,’ or ‘That looks interesting.’
The next thing you know, you see a couple of other interesting things in the window. You look past the display into the store. You think, ‘I’ll check it out for a minute.’
You open the door and step inside. You love what you see. ‘What a great place! I’ll look around for a minute.’ You see something that would look amazing in your house. You move from one display to the next, imagining what your life would look like with some of these beautiful things.
You feel relaxed. Happy. You love the atmosphere. This is what you want in your life. This is something you’ve been looking for. You’re falling in love.
What makes this store different? Why do you like it so much?
Connection.
The store connects and resonates with you. It fits with your imagined ideal of what you would like for your life.
Yes, the product is something you would love to have. But it’s not just the product. It’s how you feel. You feel more beautiful, sexier, happier, or more fun when you imagine this product as yours.
How you feel about the product is influenced by the store atmosphere. It puts you in a mood you enjoy. Not only do you like the merchandise, but you like the idea of shopping here. You want to be here. You want to come back. You want to buy here.
Are you making this connection with your shoppers? Does your store resonate with them?
A store that resonates with shoppers:
1. Isn’t for everyone.
We are all unique. We all have different tastes. What one person likes, another dislikes. If you try to appeal to everyone, you will end up with a store that doesn’t attract anybody. A successful store appeals to a specific group of people with certain tastes and interests in common.
Determine who your best customers are and work to attract to others like them.
2. Has something their customers need.
Face it. Shoppers can probably find a product like yours somewhere else. They don’t need your product. What they need is something else. Maybe it’s security. Enjoyment. Relief from stress. One of the most common needs that people are seeking to satisfy is the need for status, or respect.
Figure out what your customers really need. Then sell it to them.
3. Has personality.
A store just like all the others is boring. A great store has character and flair. It’s personality is conveyed through color, design, fixtures, lighting, signage, advertising and people. It has a quality that is unique and different.
Being different is a risk. But in retail, being the same as everyone else, is certain death.
Express your personality. And do it well.
If you want your store to resonate with your customers, show them what you have in common. Show them you understand them and what they need. Romance them. Make them feel beautiful, sexy, important, safe or happy.
Sounds like a relationship, doesn’t it? It is.
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Melanie McIntosh is a retail consultant and owner of Inspire Retail Solutions. She helps independent retailers who are struggling to get customers in the door.
Is your store appearance actually turning customers away?
Download the free ebook Attracting Customers here: http://www.inspire.bc.ca/attractcustomers.htm
Subscribe FREE to Retail Tips http://www.inspire.bc.ca/subscribe.htm
December 2, 2007
Imagine a situation where your company is unable to strike a good deal owing to late payment to be made by its customers. You find yourself to be really missing out on ‘that big deal.’ But now, you don’t really need to face the guilt of missing out such an opportunity. Thanks to the boom of factoring into the financial field! All that you need to do is approach a suitable factor and see yourself getting out of every dilemma.
Compared to loans and lines of credit, which require the clients to have tangible assets and strong financials, invoice factoring helps one to attain cash easily. Besides, most of the business enterprises today do not qualify for the criterion set by the traditional lending institutions. As such, invoice factoring offers them an excellent opportunity to gear up their business. Factoring allows them to avail immediate capital only at a nominal cost.
Invoice factoring is a blessing for business enterprises that are preparing to grow significantly because the factor takes up a part of the client’s credit risk for the end customers. It involves the factor’s bearing up of the loss in case the debtor fails to pay the invoice. This, therefore, is one of the critical services lent by factors to ambitious business enterprises.
One essential thing to know about factoring is that one doesn’t need to owe anything to the factor. The factor does not advance loans but buys invoices from the client. Since invoice factoring is not a loan, it is easy to qualify for it. All you need is a well-run business along with good customers. These are the only two potential prerequisites needed to avail the benefit of factoring. Many factors, infact, do not even demand high credibility on part of the customers. This makes factoring even more alluring to small business enterprises.
Besides, one of the primary objectives of any enterprise is steady cash flow. If cash flow freezes all of a sudden, there arises an immediate need to convert the receivables into ready cash. Invoice factoring thus offers the unique prospect to regenerate a dying business as it provides certain ancillary services as well as frees up internal resources.
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Suzanne is an Internet marketing professional with expertise in content development and technical writing in a variety of industries.
Small Business Cash Advance
November 23, 2007
I recently had the opportunity to interview Chris Knight, CEO of the highly successful EzineArticles.com web site. Here?s what he had to say about Internet marketing for local small businesses:
1) How is Internet marketing different than offline marketing?
Internet marketing is online in the form of web pages, permission-based emails, ezines, blogs, RSS feeds, search marketing, etc. Offline marketing is typically physical media, such as print, postcards, letters, newspaper advertising, etc.
2) Do you recommend small businesses with a local clientele use Internet marketing techniques with traditional methods of marketing? If so, how should they go about that?
Yes, of course.
They should first attempt to get the email address of every single customer and prospect along with permission to send them a weekly or monthly email newsletter or alerts of special promotions that their clients may find valuable.
The next step is to make a simple web site so that your basic core contact information, hours, directions and product lines or rate cards can be found.
The third step may include a shopping cart that allows clients to buy from you online as well as offline. Even if your current clients don?t buy online right now, you may find that your expertise can be packaged or bundled for digital sale to others all over the world.
3) What is the best way for a small brick-and-mortar business to get in on Internet marketing action?
Get the ezine started and begin an email-based relationship with your prospects, business friends and clients. It all begins with email.
Concurrently with the ezine, I?d recommend starting a blog and beginning a market discussion with your audience. It?s not that difficult as one of the core tenets of blogging is that the blogger doesn?t need to know HTML to produce frequent updates to the blog.
4) Is article writing just for those folks with an Internet site or can businesses without a Web presence benefit?
While you can engage in article marketing without owning a website, it doesn?t make sense. How much are domains these days? $10? Web hosting accounts are $15-$20 per month and HTML web designers can be hired for $8-$15/hr in most places. If you?re not on the web, it?s only because you?ve chosen to not be on the web. I?d recommend skipping article marketing until after you?ve built a very simple web presence.
5) What do you think is the biggest mistake small business owners make when they try to go online, and what advice can you give to stop people from making that mistake?
Not updating their website frequently enough. Daily would be what I recommend and weekly at a very minimum. Email newsletters should be delivered weekly at a minimum, and blogs should be updated every day or every other day if you want to achieve success online.
6) There are many ways to go about Internet marketing. There’s SEO, e-books or information products, blogs, forums, article writing, press release distribution, pay-per-click, ezine publishing and so many others. In your opinion, what is the most important Internet marketing method for small businesses with traditional mindsets?
The best method from the list you gave is ALL OF THEM, and at the same time.
The biggest mistake I see traditional mindsets making is thinking the offline world can be applied to the online world. Traditional direct marketers are often the worst offenders in terms of not honoring client permissions when engaging in email marketing.
Another mistake is thinking short term and doing highly risky ?black hat? activities to cheat or game the system. Have some integrity and use the Internet to build new, and reinforce, existing relationships with your target market.
7) How would you recommend a small business owner who is primarily interested in reaching a local clientele approach online marketing efforts?
I?d focus on making sure your web site is search engine friendly so that you attract localized search users who are trying to find your business online.
Assuming your website is up and you?ve got a few years under your belt, it?s time to test Pay-Per-Click (PPC) marketing and Article Marketing. Both will help deliver qualified visitors to your website so that you can begin the relationship and help your customers buy more from you.
 Of course, small business owners are budget minded so they’re always looking for low-cost ways to promote their businesses. What low-cost ways does Internet marketing offer?
Comparative to PPC marketing, Article Marketing is more grass roots because it only costs your time to write, produce and submit or distribute your quality original articles.
Ezine delivery and management is also a relatively low cost investment with the highest costs being your time to produce each issue.
9) Should the strategy be different for a service business? I mean, if a person is selling a service instead of a product, would they still approach Internet marketing the same way? How about article writing?
It depends if their product or service can be acquired over the web. I?m always amazed at how many service-based businesses don?t think they can acquire sales by putting their services online. How falsely they have assumed.
As far as article writing & marketing is concerned, both physical and intangible products or services make for excellent topics to write about and attract qualified visitors.
10) One final question. What is the best way to ensure ezine publishers pick up your article for their publication?
Ask yourself this question: ?Does my article make the publisher look good?? If so, my chances of being picked up are higher.
Did you use correct spelling, grammar, sentence-structure and punctuation?
Keep your articles short, 300-700 words. No one has time to read thousands of words unless they are sitting down to read a book or research whitepaper/report.
Keep your article writing and submissions on a consistent and frequent basis. The traffic rewards disproportionately go to those who submit new articles every week instead of the experts who only do article marketing once a year. If you advertise your business monthly, consider marketing with articles monthly.
Chris, on behalf of Taylor and Associates, I want to thank you for your time and energy in coming up with responses to our questions. Taylor and Associates performs all the services you mentioned here on behalf of our clients, including article writing, blog management, SEO, ezine publishing and Internet marketing. We are as committed to the success of local small businesses as Chris Knight, of EzineArticles.com is, and that?s why we invited him to be our guest this week.
Christopher M. Knight invites you to submit your best articles for massive exposure to the high-traffic EzineArticles.com directory. When you submit your articles to EzineArticles.com, your articles will be picked up by ezine publishers who will reprint your articles with your content and links in tact giving you traffic surges to help you increase your sales. To submit your article, setup a free membership account today: http://EzineArticles.com/submit/
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Allen Taylor is an award-winning journalist and freelance writer. He operates a full-service content provider for online businesses, a local small business directory in South Central Pennsylvania and Articles.pn, an article directory with social networking tools.
November 15, 2007
If you want to buy directly from the wholesaler, you’re going to need to get your business legal.
Now, there are a lot of scams on the internet related to wholesaleing. Type ‘wholesale’ into google and you’ll find tons of companies willing to get you the ‘best’ wholesale deals….for a price.
Suppose Tom wants to make a fortune on the internet selling products. He’s heard of all the people making six figures from home on Ebay, or with a Yahoo Store, and decides he can do the same.
Only question is, where to find product. Moreover, Tom needs not only product, product at the lowest wholesale price. Otherwise, he knows there’s no way to compete on Ebay and the internet if his prices are too high.
So Tom gets on google and searches for ‘wholesalers’.
Tom’s first call is to a real wholesaler (most advertisements on google for wholesalers are actually middlemen with good SEO skills, so what out). The wholesaler is happy to help, all Tom needs to do is fax an application form containing his business name, Federal ID number (EIN), and state resale tax number.
‘Application forms? Tax ID numbers? That sounds like WORK…. legal work,’ thinks Tom. So he heads back to Google to find a different wholesaler.
And does he. He finds ‘GRQ Wholesalers” website, with big bold headlines and pictures of people holding fistfuls of money and dollar signs everywhere. ‘Everyone is getting rich in wholesale!’ the site screams.
All Tom needs to do is sign up to be a reseller. Heck, GRQ will even dropship to his customers–Tom doesn’t have to stock inventory or make minimum orders. All this for only $19.95 a month, plus a $50 setup fee. No tax id number, no sales tax number, no paperwork.
Just profits.
Well, the more profits part is true….for GRQ. GRQ is a middleman, probably with high prices, inferior inventory, poor quality control, and slow shipping. GRQ is buying from a real wholesaler and marking up prices to you. Even worse, they are charging you a fee for the privilege of paying higher prices.
Another internet millionaire created….not Tom, but GRQ.
Bottom line: You must be a REAL business to get REAL wholesale prices
How to Get Legal for Wholesalers
Fortunately for you, getting legal isn’t as hard or scary as it might seem. Just find the forms, follow the directions, and you’ll be fine. The worst that can happen is the government returns your form and says you did it wrong and you have to resubmit. They aren’t going to throw you in jail or anything.
Federal Tax ID Number
If you have not incorporated your business, then your Federal Tax ID number is simply your Social Security number. This goes for those who filed as a DBA (Doing Business As or Fictious Name Register)–you can also use your Social Security number.
If your business is incorporated or an LLC, then you need to use your EIN or FEIN. The EIN and FEIN are the same thing… Federal Employer Identification Number or Employer Identification Number.
Get your EIN by filling out an IRS SS-4 Form. Download an SS-4 Form from the IRS here. You’ll need Adobe Acrobat to read this file.
Free instructions for filling out the SS-4 are here. Go to the ‘Get an EIN’ tab and follow the directions.
Sales Tax Resale Number
Besides the FEIN/EIN/Tax ID number, your state resale tax number is critical. What this number does is allow you to buy products without paying sales tax.
The government only collects sales tax on an item once-when the final consumer buys it. Therefore, retailers and others who purchase goods for resale don’t pay sales tax. Instead, they collect sales tax from the end consumer and pay it to their state.
In order for the wholesaler not to charge you sales tax, however, they need to have your resale number on file. Otherwise, they are forced to charge you sales tax and that throws their whole accounting system off and most will not deal with you.
Fortunately for us, getting a resale tax ID number isn’t that hard.
- Find your State’s Department of Revenue or Division of Taxation from this list.
- Follow the instructions on the form, including paying the fee
- Each quarter file a sales tax return and pay all sales tax you’ve collected
With these two numbers in hand, you should have all the information you need for getting legitimate wholesalers to work with your business. By buying at true wholesale prices, you’ve jumped the first hurdle to having a successful internet business.
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Simon Maher is a contributor for LLC Made Easy. Learn more about choosing and managing your business entity at LLC Made Easy.
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