The Women's Small Business Start-Up Kit

A Step-by-Step Legal Guide

The award-winning guide for any woman starting a business

Get the solid practical advice and legal basics every woman entrepreneur needs in The Women's Small Business Start-Up Kit. Learn what it takes to start and run a business, including how to:

  • write a business plan and raise start-up money
  • become certified as a women-owned business
  • market and brand your business effectively

Includes key financial worksheets and other useful forms!

  • Product Details
  • Have an idea or skill that you’re ready to turn into a business? Want to expand or improve your current business operations? This book is for you! Learn how to:

    • draft a solid business plan
    • raise start-up money
    • choose a legal structure and hire employees
    • manage finances and taxes
    • qualify for special certification programs and contracts for women-owned businesses, and
    • efficiently market and brand your business online and off.

    You’ll also hear from successful women business owners whose insights will inform and inspire you. And you will learn valuable tips for maintaining work-life balance.

    The 7th edition covers the latest tax updates, legal developments on classifying workers as contractors versus employees, implementing Diversity, Equity, and Inclusion (DEI) policies, and defining your business’s digital strategy.

    “An essential roadmap for any woman considering entrepreneurship.”—Sara Gould, Former President & CEO, Ms. Foundation for Women

    “Clearly details all the nuts and bolts of starting a business…”—Lindsey Johnson, former National Director, SBA Office of Women’s Business Ownership


    Number of Pages
    Included Forms

    • Partnership Agreement
    • IRS Form SS-4 and Instructions (Application for Employer Identification Number).
    • Cash Flow Projection Worksheet (and Instructions)
    • Profit/Loss Forecast Worksheet (and Instructions)
    • Break-Even Analysis Worksheet (and Instructions)
    • Billable Rate Calculator (and Instructions)
  • About the Author
    • Peri Pakroo, J.D. · University of New Mexico School of Law

      Peri Pakroo ( is a business author and coach, specializing in creative and smart strategies for self-employment and small business. She has started, participated in, and consulted with start-up businesses for more than 20 years. She is the founder and Director of P-Brain Media, an information technology firm that helps small, indie ventures define digital strategy and communicate online.

      Peri received her law degree from the University of New Mexico School of Law in 1995, and a year later began editing and writing for Nolo, specializing in small business and intellectual property issues. She is the author of the top-selling Nolo titles The Women’s Small Business Start-Up Kit, The Small Business Start-Up Kit (national and California editions), and Starting & Building a Nonprofit, and has been featured in numerous national and local publications including Entrepreneur, Real Simple, Investor’s Business Daily, and BusinessWeek.

      For several years Peri taught adult education courses at WESST in Albuquerque, a nonprofit whose mission is to facilitate entrepreneurship among women and minorities in the state of New Mexico. She is active in supporting local, independent businesses and is a co-founder of Sustainable Equitable Economic Democracy New Mexico (SEED NM).

  • Table of Contents
  • The Women’s Small Business Start-Up Companion

    1. Choosing the Right Business for You

    • The Realities of Entrepreneurship
    • Top Considerations for Developing Your Business
    • Maintaining Work/Life Balance
    • Mixing Business and Kids
    • Developing Business Systems
    • The Role of Business Owner

    2. Targeting a Profitable Market With a Winning Idea

    • Choose the Right Business Idea
    • Target a Profitable Market
    • Do Your Homework: Market Research
    • Government Contracting Opportunities for Women

    3. Making the Financial Transition to Self-Employment

    • Business Start-Up Costs
    • Personal Costs of Living
    • Health Insurance and the Affordable Care Act
    • Child Care
    • Funding Sources

    4. Drafting an Effective Business Plan

    • Why Write a Business Plan?
    • How Detailed Should a Business Plan Be?
    • The Narrative Sections of a Business Plan: Describing Your Business and Yourself
    • Financial Projections: Showing Your Business Will Profit
    • Finalizing Your Business Plan

    5. Understanding and Choosing a Legal Structure

    • Overview of Business Types
    • Sole Proprietorships
    • Partnerships
    • Limited Liability Companies (LLCs)
    • Corporations
    • Benefit Corporations, L3Cs, and Emerging Business Structures for Socially Conscious, Mission-Driven Businesses
    • Choosing the Best Legal Structure for Your Business

    6. Your Business Location: Working From Home or Renting Space

    • Running Your Business From Home
    • Sharing Outside Office Space
    • Renting Your Own Office or Commercial Space

    7. Dealing With Start-Up Requirements and Bureaucratic Hurdles

    • Step 1: File Organizational Documents With Your State (Corporations, LLCs, and Limited Partnerships Only)
    • Step 2: Obtain a Federal Employer Identification Number
    • Step 3: Register Your Fictitious Business Name (FBN)
    • Step 4: Obtain a Local Tax Registration Certificate
    • Step 5: Obtain a State Seller’s Permit
    • Step 6: Obtain Specialized Licenses or Permits

    8. Getting the Word Out: Cost-Effective Marketing

    • Start by Knowing Your Market
    • Develop a Strong, Authentic Brand
    • Choosing Winning Names for Your Business, Products, and Services
    • Establish Excellent Customer Service Policies and Practices
    • Plan Marketing in Advance
    • Networking
    • Engaging in Media Relations
    • Holding Special Events
    • Collaborating With Other Businesses
    • Listing Your Business in Directories
    • Joining a Professional or Trade Organization
    • Sponsoring Events, Groups, and Public Media
    • Sending Postcards and Other Direct Mail
    • Giving Out Free Samples
    • Establishing Customer Loyalty Programs
    • Preparing Print Materials
    • Publishing Articles and Newsletters
    • Advertising Your Business

    9. E-Business: Conducting and Marketing Your Business Online

    • Digital Strategy Should Serve Business Strategy
    • Specific Tactics and Tools
    • E-Newsletters
    • Blogging
    • Social Media: Facebook, Twitter, and More
    • Local Search Listings
    • E-Commerce
    • Traffic Building and SEO
    • Planning a Website Project
    • Choosing and Working With a Web Developer
    • Creating Your Website
    • DIY Websites: Do or Don’t?
    • Domain Names and Hosting
    • Intellectual Property: Who Owns Your Website?

    10. Keeping Your Books and Managing Your Finances

    • Bookkeepers and Accountants: Which Do You Need?
    • Financial Management: The Big Picture
    • Cash vs. Accrual Accounting: Which Method’s Right for You?
    • Step 1: Keeping and Organizing Income and Expense Records
    • Step 2: Entering Receipts Into Bookkeeping Software
    • Step 3: Generating Financial Reports
    • Using Technology to Manage Money, Inventory, and Projects

    11. Federal, State, and Local Tax Basics

    • Business Tax Basics
    • Minimizing Taxes Through Deductions
    • Child Care Expenses: Deductible?
    • Federal Income and Self-Employment Taxes
    • Estimating and Paying Your Federal Taxes Quarterly
    • State Income Taxes
    • City and County Taxes
    • Sales Taxes

    12. Building Your Business and Hiring Employees and Other Workers

    • Developing Systems to Run Your Business
    • Hiring and Managing Staff
    • Using Technology to Manage Staff
    • Employees vs. Independent Contractors (ICs)
    • Required Rules, Paperwork, Filings, and Taxes for Employees
    • Rules for Hiring Independent Contractors (ICs)
    • Hiring Your Kids and Other Family Members

    13. Lawyers and Accountants: Building Your Family of Professionals

    • Working With Lawyers
    • Doing Your Own Legal Research
    • Working With Accountants, Bookkeepers, and Tax Professionals

    How to Use the Downloadable Forms and Access Interviews
    With Women Entrepreneurs on the Nolo Website

    • Editing RTFs
    • List of Forms and Interviews With Women Entrepreneurs Available on the Nolo Website


  • Sample Chapter
  • Chapter 1
    Choosing the Right Business for You

    Pop quiz: What life do you envision for yourself as a business owner? I’m not talking about the business you see yourself running, but the life you want to lead. If you haven’t thought much about this, now is the time. Assuming that you want your business to serve your life instead of the other way around, you need to include big-picture life goals in your planning process. Self-employment takes many different forms and supports a wide range of lifestyles; it’s up to you to decide what goals are most important to you and plan your business accordingly.

    It’s all too easy for new entrepreneurs to be seduced by traditional notions of business success without thinking about the lifestyle implications or considering alternatives. The “success” stories we always hear about in business magazines and other mainstream media constantly focus on big dollars and rapid growth—and the classic depiction of the business owner who works 18 hours a day. If you leap into starting a business without taking the time to define your own vision for your life as a small business owner, you might find yourself among the many entrepreneurs who complain they’ve become slaves to their businesses—much like they once felt like slaves to their jobs.

    The truth is, business success can take many different forms, from major retail empires to microbusinesses with modest incomes. If you take care to explore your unique vision of success early in your business planning, you’ll be much more likely to build a business—big or small—that truly makes you happy.

    This chapter looks at big-picture lifestyle questions new entrepreneurs should consider when in the early planning stages of a venture. I’ll focus on developing a realistic picture of what it’s like to run a small business and help you understand how to approach your planning efforts so that the business fits in well with your personality and lifestyle choices.

    We’ll cover:

    • the realities of working for yourself, including what personality traits and skills are important when you’re self-employed
    • practical tips for maintaining a healthy work/life balance, including choosing the right type of business, setting realistic goals, and engaging in healthy work habits
    • the importance of implementing systems within your business to ensure that it runs smoothly, especially when you’re not around and/or if you have staff, and
    • what’s involved in the role of the business owner, separate from other roles you might play in the business, such as leading a sales team, providing professional services, or handling tasks like

    By the end of this chapter, you’ll have a good idea of the personal considerations you should address in order to ensure the business you start fits well with your ideal life. You’ll then be in a good position to start the “business” side of your business planning as covered in upcoming chapters, when you’ll focus on developing a winning idea (Chapter 2) and fleshing it out in a solid business plan (Chapter 4).

    What’s the best part of running a business?

    “Getting to do exactly what I want, how I want to … and not working for someone else.”

    — Kyle Zimmerman

    “The fact that I work in the field of my choice doing what I love, with freedom to be creative. Th e ability to model the business philosophy exactly to my standards and beliefs is something I would never have working for someone else.”

    — Sabrina Habib Williams

    “Being self-employed is pretty ideal for becoming a parent. I can decide what kind of a schedule I need (within reason) and be more in control of my life than if I worked for someone else.”

    — Rebecca Pearcy

    “Getting to call the shots—nothing quite compares to having the autonomy to decide which projects you want to take on, and when and how you want to work. Even when things are rough, it’s reassuring to know that if you want things to change, it’s in your power to change them.”

    — Lauren Bacon and Emira Mears

    “The constant newness, change. There are always new issues and challenges, and this suits my personality. I now cannot imagine working for someone else.”

    — Elissa Breitbard

    “The best part of running a business is the flexibility of my schedule. I realized how important this was when I was pregnant and after having my daughter.”

    — Leila Johnson

    “The challenge and the learning are the best parts of this business owner puzzle. After failing at other businesses, I have rejoiced in understanding that my failures have been my best lesson. I have no fear of thought-through risk, and have built a tremendous amount of confidence from this.”

    — Nicola Freegard

    “When you’re a consultant, people really are turning to you for advice. Having the intellectual freedom to speak my mind and being able to substantially influence the direction of a business entity are probably the benefits I appreciate most about the choice I’ve made.”

    — Isabel Walcott Draves

    The Realities of Entrepreneurship

    While teaching business start-up courses and advising clients for the past couple decades, I have met scores of would-be entrepreneurs with boundless energy, passion, and fabulous ideas for new businesses— including many with seriously misguided ideas about what it’s like to own and run a business. If the idea of being your own boss conjures images of sleeping late, enjoying fancy lunches with clients, or a swank corner office with panoramic views, think again. Starting a business is rarely so glamorous, especially in the early days when you could find yourself fantasizing about simple things like an afternoon off or a quiet homemade dinner.

    Even if you think you have a pretty realistic vision of starting a business, it’s worth stepping back in the early days of planning it and examining your motivations and assumptions to make sure entrepreneurship is really right for you. Here’s a quick list of practical realities.

    • Business owners need to be comfortable making decisions on their own. From big strategy decisions, such as what type of business entity to form, to details such as how much to pay an administrative assistant, a business owner makes lots of decisions every day. Even if you hire a manager for your flower shop or restaurant, ultimately the buck stops with you. If decision making isn’t one of your strong suits or stresses you out, think twice about being your own boss.
    • Pessimists need not apply. Most entrepreneurs are eternal optimists who see opportunities instead of barriers. If you immediately think of 10 or 100 reasons why an idea might fail, you’ll likely have a hard time making it far in business.

    To nurture your inner optimist, read The Art of Possibility: Transforming Professional and Personal Life, by Rosamund Stone Zander and Benjamin Zander (Penguin). The book opens with a story about two marketing scouts from a shoe factory traveling to Africa to explore business opportunities. The first scout sends a telegram back to the factory, “Situation hopeless … no one wears shoes.” But the second sends the message, “Glorious business opportunity … no one wears shoes.” The more you can cultivate the latter attitude, the more attuned you’ll be to opportunities all around you.

    • You’ll need a thick skin. The most successful business owners are unafraid (or at least willing) to boldly promote themselves, their businesses, their products, and their services. You’ll need to be able to handle rejection from potential customers or challenge from competitors, so if you are easily wounded or prone to giving up when faced with obstacles, entrepreneurship might not be the best route for you.
    • Running a business can be lonely. Many entrepreneurs are surprised to find how isolating it is to run a business. Working alone, late at night after the kids have gone to bed can really make you feel alienated from the world. It’s a common issue for solo operators, but even those with employees often bemoan their lack of peers. You might have to spend extra energy developing friendships and a social circle. Note that if you take the advice offered throughout this book and regularly engage in networking, you’ll feel less isolated while simultaneously boosting your business’s chances of success.
    • A great business idea is no guarantee of success. I can’t count how many people I have met who say they have a fabulous business idea—in many cases, it actually is fabulous—but seem to think that this killer idea will just magically transform into a profitable business. The idea is just the starting point. Even the best idea requires work and money to start the business, market the product or service, and guide the venture to success.
    • Being organized will help lower the stress of running your Below we discuss the importance of organizational skills such as keeping a schedule for yourself and developing methodical systems to run your business. In general, being organized helps save time and reduce stress, two major factors in how much you’re likely to enjoy your life as a business owner.
    • Without a boss, your motivation and discipline will need to come from For some people, it’s a struggle to find the motivation to put in long hours and do tasks they loathe (for many, this includes bookkeeping). If you need a boss to keep the fire under you, self-employment might not be a good fit.
    • You should love what you do—and remember to treat it like a business. I’ve never been a fan of choosing a business idea purely based on what’s hot and profitable at the Going with what you know and love is always a better bet. But just because you pursue a passion doesn’t mean you should be any less businesslike. If your business is making jewelry, doing photography, freelance writing, or any other creative pursuit, it’s important to treat your work like a business, not a hobby. The many different aspects of doing this—business planning, conquering the bureaucracy, keeping your books, and more— are the prime subjects of this book.

    Top Considerations for Developing Your Business

    Besides getting real about what life as an entrepreneur might look and feel like, you should also take into account some specific considerations regarding your goals, your strengths and weaknesses, and the team you’re considering putting together. Let’s look at some of the most important things to think about as you push your business idea forward.

    Align Your Lifestyle Goals With Business Goals

    Some people get into business with the intention of starting an empire; others start with modest aims to generate enough income to support their family. Both approaches are equally valid. What’s important is to think hard about what you want your life to be like before you start planning your business.

    Businesses that require significant start-up funds will put more stress and pressure on you to succeed, especially if you’re borrowing that money or getting it from investors. As I discuss in Chapter 3, there are a lot of misconceptions about the realities of getting investors to help launch a start-up, one being how much pressure and stress those investors can impose upon new entrepreneurs.

    If maintaining creative and strategic control over your operations is important to you, you’ll likely be better off figuring out how to start your venture with your own funds. In many cases, this means starting a business with low overhead and/or starting out small with modest growth goals. Bootstrapping—growing slowly using the business’s own revenues—can be a lot of work, but it can be considerably less stressful than being beholden to investors or lenders.

    If, on the other hand, you know you are “all in” on your business idea, don’t be afraid to dream big. The key will be in careful planning, money management, and staff management so that you can keep investors or lenders happy—and in pacing yourself for rapid growth without burning out your most precious resource: you.

    Honestly Evaluate Your Small Business Skills

    When deciding what business to start, it’s important to evaluate your ideas in terms of what skills might be particularly important. For a business to succeed, many skills come into play—not just the expertise at the heart of the business. In addition to that expertise (for instance, graphic design experience if you want to start a graphic design firm, or knowledge of pet products and services if you want to open a pet supply shop), a successful business relies on more general skills. For example, every business regardless of industry needs to manage its money, engage in marketing, and, if the business has staff, manage employees or subcontractors.

    New entrepreneurs are often surprised to discover that the success of their venture might depend on skills they didn’t expect would be important—and that they might not possess. Some businesses might be heavily dependent on technology, for instance, or might require sophisticated financial management. By evaluating the skills required for your business and your own related strengths or weaknesses, you’ll develop a realistic picture of how well suited you are for running that business.

    A common scenario is for an entrepreneur to have plenty of skills in the core aspect of the business but not in administrative or financial areas. This is especially true for creative entrepreneurs. A master knitter who wants to start a business teaching knitting classes might have no trouble in defining how she’ll run the classes, what techniques she’ll cover, what supplies she’ll need, and the like. But when it comes to doing bookkeeping, managing staff, or marketing the business, she might feel clueless.

    I meet entrepreneurs like this all the time—caterers, software developers, craftspeople, photographers, and writers who are great at providing their products or services but who lack skills and confidence in the more “business-y” aspects of the business.

    Example: Simone wants to start a wedding planning website that will offer information and local resources for brides (and to a lesser extent, grooms). She has been a buyer at a bridal store for nearly ten years and knows the industry well. Based upon other websites she’s evaluated, Simone believes her website can earn revenue through online advertising and affiliate agreements with local wedding-related businesses, such as florists. For example, Simone’s site could earn commissions when site visitors click through to and/or make purchases at florists listed at her site. In researching her idea, Simone talks with a couple of contacts of hers who have experience in online publishing. Both her contacts help Simone understand that the success of her business idea will heavily rely on how successfully she can negotiate affiliate agreements with other wedding-related businesses. Simone’s in-depth knowledge of bridal fashions and trends, while helpful, won’t be the key to the business succeeding. Simone is disheartened to hear this advice since she has little to no sales experience outside the realm of buying dresses for her shop—and she was never very comfortable with the negotiating aspect of her job. She reluctantly realizes that her idea might not be a good fit for her skills, and that she could be better off with a slightly different type of business, such as being a wedding consultant or planner.

    The good news is that gaps in your skills and experience can be filled, either by hiring employees or contractors, or taking on co-owners. Most entrepreneurs aren’t experts in every aspect of running a business, and sometimes they might simply loathe certain tasks such as bookkeeping or marketing. The key is to recognize those gaps and fill them with other key people. Hiring staff is discussed in Chapter 12. We discuss taking on co-owners in the next section.

    The many hats of entrepreneurship

    “Even though I had already worked for someone else as an apprentice, I think I still had the naive notion that to be a photographer I’m going to be doing something that I love and something creative all the time, and that it’s going to be great and I’m going to have all this fun. I didn’t know I was going to have to learn to be a bookkeeper and take accounting classes; I didn’t know I was going to have to learn about all these laws related to taxes and how to write them off; I didn’t know I was going to have to learn to be a salesperson; I didn’t know I was going to have to learn marketing and branding and go home and rack my brain and think of the next marketing campaign that suits our business the best, or the most creative way to network that somebody hasn’t done yet, to keep myself innovative. I thought I was going to have to be innovative with my imagery, and my photography. I didn’t know I was going to have to be creative and innovative with branding and marketing. Branding and marketing were words that didn’t pertain to my life. So, being able to wear every hat and any hat—and many hats at any time and all times. Juggling 30 things at once. It’s basically getting over that overwhelming part of it. Now I feel that we can handle it and it just comes naturally to us.”

    — Sabrina Habib Williams

    Consider Co-Owners Carefully

    Starting a business with co-owners (either partners, LLC owners, or corporate shareholders) can be easier in many ways than going it alone. At the most basic level, it can be a huge asset to have other motivated owners to share the burdens of starting and running the business, instead of being responsible for everything yourself. This is true not only with regard to the hard work involved, but also the start-up money needed—co-owners can be an important source of funding. In addition, as discussed earlier, co-owners can bring important skills to the table that you might lack, such as experience with financial management or legal knowledge.

    There are potential drawbacks to starting with co-owners, however. One is that there are more complexities involved in starting and running a business with multiple owners. You’ll need to hammer out important details—including ownership shares, work responsibilities, salaries and other compensation, and buyout provisions—and execute an agreement outlining all key terms (for partners, this document is called a partnership agreement; for LLC owners, it’s called an operating agreement). Assuming the co-owners will actively work in the business (as opposed to being silent investors), you’ll need some level of management structure to ensure the co-owners work together efficiently, fulfill their job descriptions, and put in the hours they’ve committed to. In comparison, being the only owner is considerably simpler.

    Besides more structural complexity, the existence of multiple owners introduces the possibility of conflict. This can happen even when everyone is working hard and has the best intentions. Well-meaning, reasonable people can still disagree (sometimes vehemently). All sorts of issues can be fodder for conflict: fundamental business strategy, hiring decisions, marketing and branding choices, and pricing are just a few examples. Conflict becomes even more likely when one or more owners don’t live up to their responsibilities or make poor choices. When a co-owner fails to keep the books up to date or makes a habit of missing important meetings, discord is sure to follow.

    To avoid problems like these, the most basic advice is to be very careful in choosing co-owners. As tempting as it might be to jump into business with your best friend, it’s critical to evaluate the situation and relationship first. Do you essentially trust the person’s judgment in general? Besides common sense, does your potential co-owner have good business instincts? Do they have relevant experience? On a personal level, do you have an easy rapport that facilitates getting things done and resolving conflict when it inevitably arises? And perhaps most important, do you trust this person is honest and ethical? If you have any serious doubts about any of these, co-ownership might not be wise. Trust your instincts and don’t dismiss any nagging unease. As many business consultants note, going into business with someone is much like getting married. Don’t make the mistake of finding yourself in bed with an unreliable or untrustworthy partner.

    Partnerships, LLCs, and corporations are discussed in Chapter 5. That chapter offers details on the legal and tax characteristics of these business types and what differentiates them from one another. The bureaucratic steps involved in starting various business entities are covered in Chapter 7.

    Use Caution When Working With Your Spouse or Relatives

    If your vision includes your spouse or other relatives as part of the business (either as co-owners or employees), make sure you’ve thought through the details and potential pitfalls of this setup. At a minimum, make sure that your family members are qualified for the jobs you’re planning for them. As Chapter 12 describes in more detail, you should approach the hiring process methodically, draft clear job descriptions, and pay wages regularly as you would with any hire.

    Even if your spouse, brother, cousin, or other family member is perfect for the job, ask yourself: Are you really sure you want to mix business with family? Conflicts are common in day-to-day business, and the start-up period is particularly stressful. Be honest about whether you think your family relationships can handle the stress. This can be a particular concern when working with a spouse—obviously, this is a relationship you want to protect and nurture. Some spouses work really well together, even in stressful, grueling situations. Other relationships do better with more space. Evaluate your relationships carefully before bringing family members into the business.

    Working with a spouse raises issues related to your business structure and taxes. Chapter 5 discusses the question of which legal entity is most beneficial and appropriate when working with your spouse, and the tax implications of which entity you use. Small business taxes are discussed in Chapter 11.

    When your business partner is your spouse

    “Because my partner Jeff is also my husband, our communication is fantastic. I mean, we can talk through anything. And we work really well as a team. And we have a good time together. Because we often work long hours it’s nice to be able to spend that time together. You know, as opposed to working long hours away from each other. If I’m having a hard day I’m able to get a nice hug in the middle of the day if I need to. And we can have lunch together and all these things that are all perks. The hardest things are not to bring work home or into our relationship. If we have a baby- sitter and we have a movie-and-dinner date, we’re very likely to sit and talk about business through our whole dinner, which is supposed to be our time together. So there are no boundaries, we talk about business laying in bed before going to sleep, and that kind of stuff. That to me is the lowest, the worst drawback, and it’s really hard to separate.”

    — Sabrina Habib Williams

    Assess Your Tolerance for Risk

    While starting a business is generally a riskier life choice than being employed in a regular job, some businesses definitely involve more risk than others. In a nutshell, the more money you need to start a business, the more risk is involved. If you’re putting significant savings into the business, they might be lost. If you obtain a start-up loan and the business fails, you might need to take an unsavory job to pay off the loan. For many entrepreneurs, these risks are worth the potential to turn a profit. Often, but not always, increased risk corresponds with higher profit potential.

    But don’t buy into the myth that you need to be a high-rolling risk junkie to be an entrepreneur. If you’re not comfortable with putting lots of money on the line, there are plenty of businesses that cost little to start or run. You might be able to start a service business that offers something like design consulting, house painting, or gardening with little initial outlay, especially if you already own many of the tools you’ll need.

    Examine your own risk tolerance and how important money is to you in order to pick a business that fits with your comfort level.

    Keep Networking at the Top of Your To-Do List

    One of the biggest keys to success for any business venture is maintaining a network of useful contacts and associates. As described in more detail in Chapter 8, networking and cultivating key relationships is a critical ongoing activity for every business owner.

    If you’re naturally gregarious and find yourself easily chatting with all sorts of people, you might do this without even thinking. If you’re more reserved, you might need to push yourself a little to flex your networking muscle. Without forging relationships within your local business community, your industry, your target customers, or whatever group is appropriate for your specific circumstances, you’re almost assured of missing out on opportunities that could mean the difference between success and failure.

    Networking is also a great way to find key vendors, suppliers, collaborators, staff, professionals (lawyers, accountants, technology contractors), and others who can be major factors—sometimes, the major factor—in your business’s success.

    Lots of folks new to the world of business fear that successful net- working requires unsavory schmoozing or pandering. Not so. In fact, if you adopt a sleazy, wheeler-dealer approach, you risk alienating the very people whom you want to make your allies. Instead, successful networking is little more than sincere communication with others about what you do.

    Elissa Breitbard, for instance, who founded and owned Betty’s Bath and Day Spa (and after 13 years made a profitable sale to new owners), is a study in the power of networking. Not content merely to engage in networking opportunities, Elissa made a point of creating them. Not long after launching Betty’s, she founded the New Mexico Spa Association. “I really reached out to all the spa owners and directors throughout the state,” she explained, “because I believe that to work together will better the entire industry. Plus I learn so much from others.” Networking also played a big role in getting her business off the ground. Lacking experience in the spa industry, Elissa had a lot to learn. “Some information was really hard to get,” she said, “which is why I started networking with other spa owners at the I-Spa conferences, the big professional organization. I really recommend that to women: to get involved with networking in their professional organizations. Just networking in general is one of the golden keys of a successful business, and it has been for me.”

    Creating a networking group isn’t that different from forming a book club, except that your group is focused on similar business issues, not literary tastes. For example, women who own a certain type of business—whether it involves IT, health care services, retail clothing, web development, or jewelry design—could form a networking group that meets once a month for lunch, happy hour, or dinner to talk shop. Networking is discussed in more detail in Chapter 8. For now, just remember to keep an eye out for local groups, such as a local restaurant or neighborhood merchants’ association, and if they don’t exist you should consider starting your own.

    Maintaining Work/Life Balance

    One issue that comes up over and over again for women entrepreneurs is the challenge of balancing the duties of running a business with their personal lives. Consistently, women report this is one of the most stubborn challenges they face as business owners. For many women, a business that allows flexibility and freedom is essential so they can care for a family (this might include caring for children or for aging parents), and spend time with a spouse or partner. Other women might want to preserve time for pursuing other life interests such as creative work, travel, sports, or any number of activities. Still other women might simply be committed to not being workaholics and want plenty of down time in their personal lives. The bottom line is that for all these reasons and more, flexibility and work/life balance are recurring themes in what women entrepreneurs report as important concerns.

    So what’s the best way to go about pursuing this elusive state of balance? First, it’s worth stating the obvious, that balance is fluid and there’s no such thing as achieving it with any finality. Maintaining a healthy balance between running your business and enjoying your life is an ongoing pursuit—more of a habit than something to strike off your “to do” list—so the trick is to adopt strategies and practices that will tend to bring you back to a happy state of equilibrium when things inevitably get out of whack.

    Another reality to keep in mind is that no small business runs itself, and it’s a mistake to underestimate the time commitment your venture will require. I’ve met plenty of prospective entrepreneurs who seem to think that their great business ideas will just blossom into success of their own volition. Unfortunately, this wrongheaded expectation is a dangerous setup for the business owner to become quickly overwhelmed and burned out when she realizes that every business—even those based on brilliant ideas—requires a lot of work to get off the ground. Having realistic expectations from the get-go is critical in helping you maintain your energy and passion, and pacing yourself mentally and physically in your business’s crazy early days.

    The good news is that it is possible to be a business owner and maintain flexibility and freedom in your life. First, clarify for yourself what “success” looks like. There’s no universal rule that you must strive to build a huge multimillion-dollar empire like the entrepreneurs you read about in business magazines (not that there’s anything wrong with that). Being clear about your own definition of success will help you choose the right type of business and aim for a scale and structure that don’t require more management than you want to provide. Also, be vigilant about developing healthy habits, such as taking certain days off or putting away your laptop after a certain hour, and taking time for personal, social, and family activities.

    The following sections take a closer look at each of these.

    How do you achieve work-life balance?

    “Oi! I’m working on it all the time, ‘working’ on keeping a balance with massages, art, dreams, and friends. And I make myself not do anything that’s ‘work’ on Sunday, ever.”

    — Kyle Zimmerman

    “Our hours are set to optimize personal and family time. We also opened a storefront studio; before that we were working from home, which meant we never left work. Having to leave everything behind at the end of the day makes a huge difference in our lives.”

    — Sabrina Habib Williams

    “I spend as much time as I can with my family and my son, when I’m not at my studio. We paint, draw, read, write and tell stories. I have a close community of dear friends I’ve known for many years too. They keep me grounded and support me for who I am, not because of what I do. Keeping life simple has been the best balance.”

    — Nicola Freegard

    “Honestly, this is a perennial struggle. It’s made much easier when you’ve got a business partner, like we do—we encourage each other to take time off when we need it, make sure we take the vacation time we’re supposed to, and leave work at a decent hour as often as possible. Of course we don’t always achieve balance—but who does?”

    — Lauren Bacon and Emira Mears

    “I delegate most of the front-end operations of Betty’s to our managers, so that I can work less, be with my family, and do other things that feed my soul. I work 18 to 20 hours a week, and am hands-on when I’m here, but then let others run the business when I’m away.”

    — Elissa Breitbard

    “I have a great team of people that works with us on projects, which helps me to manage my time. I can remember the early years in our business where I felt like the evenings and weekends were just the second shift of our business. Now, I have true off-hours where I can just focus on my personal interests.”

    — Leila Johnson

    “Finding balance is especially hard when your business is such an extension of your creativity and expression in the world. It helped me to really begin treating Queen Bee as a proper business and to get some perspective about it. At the end of the day, what I do is not life or death—we make and sell bags. So, it can be helpful to keep that in mind!”

    — Rebecca Pearcy

    Define “Success” on Your Own Terms

    Your personal goals and unique vision of success should guide you when choosing and developing a business idea. While some might define success as making enough money to retire at age 45 or establishing an international empire, success for you might mean earning a comfortable income that allows you to save enough for your children’s education and have a month or two of vacation time every year. Or you might define success not in financial terms but in terms of personal or creative freedom—simply being able to cover business and personal expenses could be enough, as long as you’re able to define your own schedule (being home with the kids after school or taking yoga classes a few mornings a week), pursue your passion (be it creative work or a personal cause), or travel freely (or all of the above).

    When your planning process includes a conscious consideration of your own definition of success, it’s more likely that your business will help you meet those goals. For example, people often assume that a bigger business is better—but larger businesses generally require a heavier commitment to run and manage. While you might make more money with a larger operation (and even that isn’t guaranteed), you’ll also be putting in a lot more effort. If your vision of success doesn’t include working more than 40 hours per week, a big business with employees might not be the best solution for you. There’s nothing wrong with modest goals or planning a business that is truly small in order to maximize your personal freedom. Don’t let business consultants, other entrepreneurs, or misleading stereotypes convince you otherwise.

    Of course, your ideas about success could change over time—just as your business might. Maybe a couple years down the line, for instance, you’ll find yourself wanting to devote more time to your business and grow it in size or income. Don’t worry—you can always adapt your business strategies as your goals evolve.

    Business success is…

    “It’s gone from in the past looking at the percentage of revenue growth annually, to the present, appreciating that we have low to no turnover of staff and a good reputation as being a community-minded business.”

    — Elissa Breitbard

    “At first, achieving amazing images and outdoing myself as a photographer was the only measure of success, but I quickly learned that the bottom line (finances) strongly dictate the measure for success. Without good finances there won’t be any opportunities to produce images.”

    — Sabrina Habib Williams

    “Success for me is having a business that provides enough money to take care of my basic needs and some of my wants, and allows me to have enough time for myself and with my family. I used to think it was all about having big-name clients, winning awards, and having lots of employees. I soon found that this definition did not match with my personal values and goals.”

    — Leila Johnson

    “The way we’ve always defined success is to do meaningful work for great clients; to make a good living doing it; and to have a happy and healthy work environment. What’s changed is that rather than just wanting that for ourselves, these days we’re very inspired to help that vision of success materialize for our entire staff.”

    — Lauren Bacon and Emira Mears

    “Before, I thought it was about offering a product that is unique. Now I think it’s all about consistency.”

    — Kyle Zimmerman

    “When I was young, I used to think success was defined by fame and fortune. Over the years, I have realized that true success is being able to do what I love every day, and support my husband and child in a way that gives us

    a positive and happy life. To live gratefully. This is true success for me.”

    — Nicola Freegard

    “Letting go of control is one of the hardest things to do when your business is your own creation. I always keep in mind something that my business counselor said: that it’s great when you let go of control of some aspect of the business, and the person taking on that role does it better than you did! That is success.”

    — Rebecca Pearcy

    Pick the Right Business Structure and Size

    The type of business you start and its size can definitely affect how much work it will take for you to run it. If maximum freedom and flexibility are important to you, one good approach is to start a business that uses a freelancer or independent contractor model, in which you can do most of the work yourself with few or no employees or contract staff. (I often use the term “freelancer” and “independent contractor” interchangeably; there’s no substantive difference between the two.) Of course doing all the work on your own often means you’ll be very busy, but the upside is that you’ll often be able to do the work on your own time, according to your own schedule (subject, of course, to your clients’ needs).

    Freelancers often struggle with whether it makes sense to hire a few workers or assistants to help boost productivity and income. While doing so might help you be somewhat more productive, the burdens of managing these helpers often (though not always) outweighs any reduction in your workload. Some freelancers find a happy balance with one or two key assistants (usually contractors rather than employees), and find that hiring any more than that results in too many management commitments.

    On the flip side, operating as a freelancer will limit your growth and ultimately prevent you from following the somewhat traditional arc of business development, in which an entrepreneur gradually shifts out of the day-to-day operations of the business. If you eventually want the business to run without you, you’ll of course need to hire other people who, through training and experience, will manage the business independently. This is quite a different scenario from being a freelancer, so it’s important that you clarify your long-term goals when developing your vision of your business.

    Ask yourself, do you envision doing the hands-on work of the business for the long haul, or do you see yourself evolving to a more strategic position, overseeing the growth of your company that runs under your direction? For example, if you have graphic design skills, you could start a graphic design firm with a staff of ten, or you could take the route of working as a freelancer, taking on clients and projects only when they fit your schedule. Starting a firm will undoubtedly take more work (and start-up money) from the outset, but in a few short years you might get the payoff of having a well-oiled machine of a firm that allows you to take five months off. Starting as a freelancer is usually simpler but it doesn’t offer a structure that allows you to take time off while the business continues to run.

    Bear in mind that you can always start as a freelancer and expand down the road. A few years later when your circumstances have evolved—say, you have more money in the bank, or more time due to young kids going off to school, for example—you could take the leap and launch a fully staffed firm. And you’ll enjoy the advantage of having crucial experience under your belt, not to mention loyal clientele.

    In short, working as a freelancer provides short-term flexibility and freedom, but, it will limit how much you’ll be able to get away from the business in the long term. Starting a slightly larger firm with staff will tether you to the business more in the short term, but the long- term payoff (if you manage things well) is that you’ll be able to reap the benefits of owning the business (as in, profits) with fewer day-to- day duties. The choice is up to you—and now is the time to think about your long-term vision.

    Blurring Lines Between Freelancing and Running a Firm

    A short generation or so ago, starting even a small business involved significant cost barriers. Today, it’s a different story. Armed with relatively affordable technology, legions of enterprising souls have taken the leap into self-employment. Home-based businesses, internet businesses, professional consultants, and freelancers of all stripes have never been so plentiful.

    Along with this boom in small, micro-type businesses, the line between freelancer and firm has blurred. Freelancers and independent contractors are now able to operate much more like small firms, thanks in large part to technological innovations, such as the ability to collaborate remotely.

    You could become one of the growing number of freelancers to hire other freelancers on a project-by-project basis in order to take on bigger, more complex, and more profitable projects without committing to overhead such as employees or physical office space. You might call this new model of business a freelancer-firm, reflecting the fact that you might essentially be a freelancer, but operate like a firm in that you hire other freelancers to get the jobs done.

    But with the opportunities to reap greater profits afforded by this trend, there are challenges too. You could feel pressure to grow into an actual firm with permanent employees and office space. Is growth always the right way to go, or is it possible to aim for a longer-term existence in the space between being a high-performing freelancer or a small firm?

    The answer depends on your goals and circumstances. If flexibility is a priority, it might make sense to pursue the delicate balancing act of the freelancer-firm model. But if you’re open to a greater commitment, hiring employees will give you more control over projects, both in terms of costs and the services you can offer. If in doubt, start with the more flexible model and don’t commit to lots of overhead. If and when you have the fortunate problem of having more work than you can handle with this approach, you can reevaluate whether you’re ready for a bigger commitment and more of a true firm.

    Develop Healthy Work Habits

    Amidst the many, many details you need to take care of when starting and running a business, don’t neglect to take care of yourself. Stress and burnout are real dangers for entrepreneurs, especially in the start-up days. Virtually everyone who has started a business has gone through a period of just constant work—and when not working, of thinking about (and often stressing over) work. This might be inevitable in limited stretches, but when it becomes chronic, it can have a serious negative impact on your health, life, and business.

    One of the best ways to prevent the business from consuming your personal life is to be organized. Create a schedule and stick to it as best you can. Specify which days and times you’ll work on specific aspects of the business—and, importantly, which days you’ll take off. Don’t flirt with burnout by becoming a work zombie. Take the time to recharge mentally and physically by taking well-deserved time off.

    Example: Patrice, who is starting a one-woman advertising agency, drafts a schedule for herself. She plans to work from Tuesday to Saturday; she’ll answer emails from 8 a.m. to 9 a.m., do billable client work from 9 a.m. to 3 p.m. (with an hour for lunch), do another hour of email between 3 p.m. and 4 p.m., and organize bills, contracts, and other paperwork at the end of the day, from 4 p.m. to 5 p.m. Patrice establishes Tuesday and Thursday afternoons for running errands when necessary (like getting office supplies or going to the post office); Sundays for catching up when necessary, and Mondays as her day off. Of course, in reality, she’ll likely deviate from this schedule somewhat—for example, she might have to work nights when under a tight deadline for a client’s ad campaign. But having the schedule in place will help Patrice keep her life much more organized than having no schedule at all and winging it each day.

    Besides implementing a schedule, try to establish consistent, methodical practices—in other words, systems—for the things your business does over and over again, such as client intake, doing the morning open and setup for a retail store, bookkeeping entry, or doing inventory. As described in more detail in the next section, the more that you can create and use systems in your business, the more it will run consistently and efficiently. Systems are essential for businesses with more than a couple employees; without them chaos will reign, and it becomes difficult to take time off since employees will need you around to manage things. But systems are also incredibly helpful for businesses as small as one person; they’ll save you valuable time and mental energy—two resources no entrepreneur wants to waste.

    Here are more tips for maintaining balance in your life:

    • Live a healthy lifestyle, including eating well and exercising This can be hard to do when you’re chronically pressed for time—but don’t succumb to the evils of fast food and inactivity. Personal wellness will pay off big time in terms of more physical energy and mental clarity, which in turn will benefit your business. And you’ll likely be less prone to illness that can rob you of precious work days—getting sick can be a real nightmare for the self-employed.
    • Watch out for substance abuse issues that can creep up on the self-employed. If you’re prone to drinking too much, smoking a lot of marijuana, or even abusing harder drugs, self-employment can open the door to these problems gaining real traction in your Since self-employed people often have flexible hours and aren’t subject to a boss’s supervision, they can more easily slip into alcohol and drug abuse and addiction. If this is a concern for you, take it seriously and consider getting professional help before you have a full-fledged problem. Proactive counseling (in other words, before you have a problem) can help you develop strategies to stay healthy and sober in your newly unstructured life of self-employment.
    • Create boundaries and rules to protect your private For example, don’t take work calls or check work-related email around the clock. While it’s important to be responsive and professional, don’t set up unrealistic expectations with your business contacts that you’ll available 24/7 by phone and email. And don’t let yourself check that email obsessively, even if clients aren’t expecting a response. Make a point to disconnect.
    • Schedule dates with yourself. If you’re inclined not to take your personal time seriously, it’s a great idea to put your leisure activities into your calendar just as if they were any other obligation or appointment. Doing this helps change your mindset and increase the chances you’ll actually follow through. For example, if you’ve been dying to catch up on your pleasure reading, put “Reading” in your calendar for a specified day and time—and don’t stand yourself up! It might seem strange to do this, but until you’ve developed a good habit of taking time for yourself, it’s a helpful trick.

    Nurture Personal Relationships

    It might go without saying, but when you start a business it’s important to find time for your family and friends. Launching a start-up can be pretty brutal on family and social life, which can be especially hard to swallow if you were drawn to self-employment by the desire to spend more time with family or friends. When you feel like you’re up to your eyeballs in the business, you’ll need to make a conscious effort to create space for quality time with your loved ones.

    Similar to my advice above about scheduling dates with yourself, I recommend making specific plans with your friends and family and putting them in the calendar. This might sound obvious, but in the pitch and sway of running a business you could find yourself backing off from committing to social plans or family activities. The next time you find yourself wanting to say “Hey, let’s get together soon,” instead make a point to pick a date and make a plan. And treat your commitments seriously—including ones you make to your family. For some reason, maybe because we assume our families will be understanding, it seems that people are more cavalier about changing or cancelling family activities than plans with friends. Your family relationships will surely suffer if this becomes a habit. When you make a hiking date with friends, a brunch date with your spouse, or an afternoon at the zoo with your kids, commit to it just like your other business commitments.

    If making time for personal relationships doesn’t come naturally to you, following these tips will help you develop a habit of enjoying your time off and doing the things you love to do outside of work.

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