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Start: Entrepreneurship, Still an Option
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How to Transition from Employee to Entrepreneur

Several weeks ago, I discussed starting your business in a recession and also mentioned a few famous companies that launched during economic slumps. So if you’re thinking about starting a business, don’t give up just because the economy looks bleak. But, do make decisions now that will help you succeed.

  1. Find a quiet and dedicated office space away from any distractions (and yes, the television counts). Even if it’s just a desk in your bedroom or family room.
  2. Set aside specific days and times to work on starting your business. A few hours after work and on the weekend can go a long way. If not, you’re likely to get distracted by the daily hustle and bustle of life.
  3. Start networking. Create accounts on several key social networking sites such as ZoomInfo, LinkedIn and Facebook. This lets your friends and colleagues know that you’re open for business. Attend free events in your area where you can connect with potential clients and others in your industry. Above all, get a business card and give it out to everyone.
  4. Take advantage of your current income. Do some pro-bono work or create a few free product giveaways. I used this method and within a month I had more requests for paid work than I could handle. Remeber, during a recession, your best tools are quality and customer service.
  5. Start small, expand slowly. Live off the income from your day job and re-invest profits back into your business. Continue to take on small projects until the revenue from your business is not only stable, but also sustainable. Make sure you have a solid plan and talk to a mentor before finally leaving your day job. This will help create a solid foundation for success.
  6. Think outside of the box. During difficult times, it’s the innovative entrepreneurs that flourish. Find ways to us the current situation to your advantage. Above all, stay creative. I recently heard the story of a regular guy who happened to be handy. At the beginning of the recession last year, he started boarding up houses after fires and storms for a friend that owned an insurance company. Because no one else was offering this specialized service, he soon became the go-to man. Within a year, his accidental business had grossed over $1 million in revenue…and all this during a recession.

Read more about succeeding during a recession. I’d love to hear your stories of how you made the transition from employee to entrepreneur. Or, if you have specific questions about transitioning, please leave a comment below.

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Upcoming Small Biz Contests

Intuit Biz Story Competition
Grand Prize: $25,000 grant and $2,500 in products
Deadline: March 23, 2009
Dell Small Biz Contest
Grand Prize: $50,000 in Dell products and services
Deadline: April 3, 2009
Women 2.0 Startup Competition
Grand Prize: Win a meeting w/ Michael Moritz (Sequoia Capital) and more
Deadline: April 10, 2009
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-Jacalyn Barnes, SCORE
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SCORE
For 50 years, SCORE has helped aspiring and current small business owners achieve their dreams. Through a network of over 11,000 volunteer business mentors in 340+ chapters across the country, SCORE connects decades of business experience and knowledge with those who can best use it.
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Finance: Cut Costs Now
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Q: How do I cut my business costs during a bad economy?
istock_000006667499smallA: Look at both fixed and variable expenses and start cutting variable expenses. Your variables are discretionary items. For example, you may postpone an equipment purchase or the launch of a new product. Continue to spend on critical marketing expenses. You need to promote your business. Look to cut costs that don’t produce a sale or drive client service.

Your fixed costs are overhead items, such as a lease, phone service, etc. You have to have these items. The key with fixed overhead is to ensure that you are getting a competitive rate and not paying any more than you absolutely must.

The first step in good financial management is to really understand how your company is doing financially. If you don’t have a Profit and Loss Statement and Cash Flow Report–gather your info and get these reports. You can meet with a SCORE counselor near you to help get an understanding of what these reports are and how to use them.

The second step is to get your financial record-keeping in a system that holds your data and makes it easy to use a menu and select a report that auto-generates. You might use Quickbooks or another accounting software that puts a system in place for consistently tracing your expenses.

The third step is to know your target. Ask yourself, “Am I on target?” A savvy entrepreneur knows the numbers, because sales, cash flow and profits are what the success of business comes down to in a bottom-line way. In this economy, you can use financial reports to closely monitor what’s happening in your business.

For help with financial management or reporting, contact a SCORE business mentor. Find SCORE near you or Ask SCORE online. Also, check out SCORE’s Business Tools and Template Gallery. If you have a question, post a comment.

Barbara Lippard, Guest Blogger
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