In a world dominated by big-box retailers, wanting to start an independent retail business probably feels a bit like David battling Goliath. “Why bother?” you think. “I’ll only get crushed.” But these days, your small size could save your business. The big boxes have gotten so bloated.

The good news is, retail spending has remained strong through the economic ups and downs (it totaled about $3.58 trillion in 2002, according to the U.S. Census Bureau).

While the costs of establishing a permanent retail location can be steep–you may spend up to $100,000 or more, with leases spanning three to 10 years–carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk.

The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report, a quarterly trade publication for specialty retailers. And today, carts and kiosks are a $10 billion industry.

Flexibility is another advantage to staying small. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to “come in, try it out for a month, and if their product isn’t working, shift to a new product line or close up shop and move to a new location,” Norins says.

These temporary locations can also work well for seasonal businesses that only need to be open for a limited time. For example, a specialty candy shop may open just before Christmas, remain open through Valentine’s Day, Easter and Mother’s Day, then close for the remainder of the year.

The most popular site for a temporary operation is a busy mall, but many operators are also finding success in airports and other transportation facilities, at sporting events, and at other creative venues limited only by their imagination and ability to strike a deal with the property manager.

At the Mall of America, about 100 temporary tenants dazzle 40 million visitors a year. Cart rental rates are about $2,300 a month or 15 percent of monthly sales, whichever is greater. All temporary tenants must pay an initial fee of $1,500 in “key money,” which pays for a store designer to design and build a cart with the right look.

Not interested in doing business in a mall? Street vendors and swap meet and fair concessionaires need to check with the city or county in which they want to do business for the regulations and specifications for the types of products, hours and displays that are allowed.

Starting Your Business

Options for starting a cart or kiosk business include opening a permanent location in a mall and leasing a cart; buying a cart to use for outdoor events or on street corners; or renting a cart short-term.

“The least expensive option is to rent [a cart] for a short time and see how it goes,” says Bruce Stockberger, owner of Stockberger Marketing Associates, a North Palm Beach, Florida, small-business marketing firm specializing in cart, kiosk and Internet marketing. He says you’ll spend at least $600 per week for rent.

Whether you lease or buy a cart depends on your product and location. In malls, you generally lease a cart from mall management. The cost of leasing depends on the season and mall traffic volume but is usually at least $800 per month for space and a cart, and can get very high in a good location.

Some malls charge a percentage of your sales in addition to monthly rent. Wally Rizza, owner of several carts in high-profile locations like the Irvine Spectrum Entertainment Center in Irvine, California, pays more than $2,000 per month for rent on each of his five carts.

“Kiosks start higher than carts, usually $9,000 or $10,000,” says Denise Clark, author of From Dogs . . . To Riches: A Step-by-Step Guide to Start & Operate Your Own Mobile Cart Vending Business. Additional start-up costs depend on your merchandise. Items such as jewelry and crystal require a greater investment than, say, hot dogs.

Carts come in many sizes and styles with varying capabilities. There are carts for specific types of food, some with refrigerators, grills, steamers–even small ovens so you can bake on location. Determine your needs before ordering a cart, advises Jeffrey Morris, president of All A Cart Manufacturing Inc. in Columbus, Ohio, a cart design and manufacturing company.

“List your products and the equipment required to make or display them,” he says. “Also draw a simple layout of the cart to give [the manufacturer] an idea of size requirements.”

Think versatility, especially with food. Don’t limit yourself to making one item, in case it doesn’t sell well and you have to switch gears. “What sells might be completely opposite from what you thought,” says Gerardo Gonzalez, president of Gonzalez & Associates, a Piscataway, New Jersey, company that consults on mobile merchandising and food-service start-ups.

You can get a good deal on used carts, but Clark, who also sells custom-designed carts, urges caution. “People buy a cart they think is cute–only to find out they’ve purchased someone else’s headache,” she says. “It ends up costing more to modify than to buy new.”

In cart sales, location is everything. Here’s your first decision: Do you want a permanent location or should you move from event to event?

With a permanent mall location, you don’t have to worry about purchasing a cart, moving it or battling bad weather (unless it’s an outdoor mall). You can build a clientele and predict how business will go and how much product you’ll need. On the downside, rent may rise. If mall sales slump, you’ll suffer. And if your product isn’t exclusive, a neighboring store could start offering the same merchandise.

There are many upsides to owning a mobile cart, says Clark, who does most of her business at special events. “You don’t have overhead like rent and utilities,” she says, “and if sales are poor, you just move.”

Focusing on Your Target Audience

Choosing a location really comes down to one key element: “It starts with identifying who your target customer is. You want to locate close to where those customers are,” says Howard Van Auken, academic director for the Pappajohn Center for Entrepreneurship at Iowa State University in Ames.

Thinking about her target customers worked for Diane Flannery, a Ben & Jerry’s franchisee as well as CEO of Juma Ventures, a San Francisco organization that finds employment for inner-city kids. “When we started [with Ben & Jerry's] eight years ago, we were trying to find different venues where we could sell ice cream,” she says. “We figured young people love baseball and ice cream, so the ballpark seemed like a good fit.”

Once you’ve found your target customers, Van Auken says, “visit those areas and see what the traffic pattern is.” In addition, according to Van Auken, you need to check with the property managers of your target location regarding such issues as product approval and display issues, security, operating costs, cash flow, staffing and lease length.

For a mall, you’ll want to speak with mall management in charge of carts and kiosks. For a public place, contact the city or county to see if a cart is allowed and what permits are required. In a professional office building, contact building management.

Susie Grant, specialty leasing manager for the Galleria at South Bay in Redondo Beach, California, also has a list of questions you’ll need to consider:

• What type of storage is available? While the Galleria’s kiosks do have some storage space, tenants can buy more at an additional charge.
• Do you plan on leasing during the holidays? Rent goes up considerably during that time.
• How long a lease do you want to sign? Grant offers agreements that last anywhere from a month to a year.

After you’ve balanced out cost issues and decided on lease length, then it’s time to find great staffers and set a move-in date. “[Location] is always based on availability,” Grant says. “[Kiosk owners] may have something in mind that’s not available at the time they’re coming into the mall.”

You’ll also need to obtain a business license, and if you haul your cart like a trailer, you must get a license from the Department of Motor Vehicles. If you serve food, you’ll need a permit from the Department of Health, which requires a specific amount of training in food preparation and handling. Malls often already have the carts permitted and insured.

While considering all these issues, one of the smartest things you can do is trust your instincts. “Go with your gut,” Grant says. “If you have a good feeling about a location, it’s probably going to be a pretty good place for you to start.”

Make No Mistake

Beginning retailers make a lot of mistakes. Here are five of the biggest:

1. Not doing a reality check. Do you have the temperament it takes to succeed in retail? “One of the biggest mistakes people make is thinking that retailing is going to be one way, and their experience turns out to be very different,” says Daniel Butler, vice president of retail operations for the National Retail Federation in Washington, DC. “They’re not realistic about the challenges.” Retail is a lifestyle choice. Can you hack it? Butler suggests working part time in retail for a few months to find out before you start your business.
2. Failing to research. Surprisingly, many beginning retailers don’t develop a business plan or a marketing plan. “When someone comes to me and says ‘This is the research we’ve done, this is why we feel this product will sell and why we’ll be successful in this location,’ it gives me a greater comfort level [in talking further],” says Courtney Lackey, a general manager with Jones Lang LaSalle, a property management leasing company that manages rental properties.
3. Creating clutter. In retail, you’re branding from day one. If your product displays have no rhyme or reason, customers have no reason to stop and shop. “The biggest mistake a cart or kiosk retailer can make is putting [out] too much merchandise,” Lackey says. “Something that’s well-displayed, colorful and catches your eye attracts customers.”
4. Competing with big-box retailers. Face it, as an independent retailer you’ll never beat WalMart on price. But a lot of small retailers fall into the price trap of trying to compete with the big boys–a big mistake, says Bob Phibbs, a retail consultant in Long Beach, California. Instead, focus on your edge as a small retailer: customer service and a unique consumer experience.
5. Choosing the wrong location. The rental rate may be great, but if the location doesn’t draw people, you might be in trouble even if your product is good. Where are shoppers seeking your type of product going? What types of big-box retailers complement your product and will drive traffic your way? One no-cost way to find out is by sitting in a mall and watching the traffic flow. “If you decide you want upscale people, look at where they’re already shopping and how you’d get that market,” Phibbs says. “Know all these things {before} you sign leases.”

Rules and Regulations

With shopping center leases, you’re customarily charged for maintenance of common areas and for the mall’s marketing efforts. Find out what the mall’s plans are for any structural alterations or remodeling, resurfacing the parking lots, or replacing the roof.

These can be devastating assessments for a young business. Requirements for hours and days of operation, employee parking restrictions, participation in community service events, gift certificate and loyalty programs, and storefront appearance may not fit into your business plan or capabilities. Make sure you’ll be capable of conforming to these requirements.

Somewhere between scribbling your idea on a cocktail napkin and actually starting a business, there’s a process you need to carry out that essentially determines either your success or failure in business. Oftentimes, would-be entrepreneurs get so excited about their “epiphanies,” the moments when they imagine the possibilities of a given idea, that they forget to find out whether that idea is viable.

Of course, sometimes the idea works anyway, in spite of a lack of market research. Unfortunately, other times, the idea crashes and burns, halting a business in its tracks. We’d like to help you avoid the latter. This how to on researching your business idea is just what you need to keep your business goals on track.
The Idea Stage

For some entrepreneurs, getting the idea-and imagining the possibilities-is the easy part. It’s the market research that doesn’t come so naturally. “It’s a big red flag when someone outlines the size of the market-multibillion dollars-but doesn’t clearly articulate a plan for how the idea will meet an unmet need in the marketplace,” says Aaron Keller, an adjunct professor of marketing at the University of St. Thomas in neighboring St. Paul and a managing principal of Capsule, a Minneapolis-based brand development firm.

That kind of full-throttle approach can cost you. “Entrepreneurs are often so passionate about their ideas, they can lose objectivity,” adds Nancy A. Shenker, president of the ONswitch LLC, a full-service marketing firm in Westchester, New York. “Rather than taking the time to thoroughly plan and research, they sometimes plow ahead with execution, only to spend valuable dollars on unfocused or untargeted activities.”

Market research, then, can prove invaluable in determining your idea’s potential. You can gather information from industry associations, Web searches, periodicals, federal and state agencies, and so forth. A trip to the library or a few hours online can set you on your way to really understanding your market.

Your aim is to gain a general sense of the type of customer your product or service will serve-or at least to being willing to find out through the research process. “For example,” says Shenker, “if you don’t know if your product will appeal to the youth market, make sure you include a sample of that population in your research efforts.”

Your research plan should spell out the objectives of the research and give you the information you need to either go ahead with your idea, fine-tune it or take it back to the drawing board. Create a list of questions you need to answer in your research, and create a plan for answering them.

“Utilize experts in planning and conducting research sessions,” Shenker advises.

“They can recommend what type of research is most appropriate, help you develop statistically valid samples and write questionnaires, and provide you with an objective and neutral source of information.”

The type of information you’ll be gathering depends on the type of product or service you want to sell as well as your overall research goals. You can use your research to determine a potential market, to size up the competition, or to test the usefulness and positioning of your product or service.

“If, for example, the product is a tangible item, letting the target audience see and touch a prototype could be extremely valuable,” notes Shenker. “For intangible products, exposing prospective customers to descriptive copy or a draft Web site could aid in developing clear communications.”
Analysis

When working with firms on brand development, Keller first looks at a business idea from four perspectives: company, customer, competitor and collaborator. This approach allows Keller to scrutinize a business idea before even approaching the topic of brand development. Here’s what he looks at for each of the four issues:

1. Company. Think of your idea in terms of its product/service features, the benefits to customers, the personality of your company, what key messages you’ll be relaying and the core promises you’ll be making to customers.
2. Customer. There are three different customers you’ll need to think about in relation to your idea: purchasers (those who make the decision or write the check), influencers (the individual, organization or group of people who influence the purchasing decision), and the end users (the person or group of people who will directly interact with your product or service).
3. Competitor. Again, there are three different groups you’ll need to keep in mind: primary, secondary and tertiary. Their placement within each level is based on how often your business would compete with them and how you would tailor your messages when competing with each of these groups.
4. Collaborators. Think of organizations and people who may have an interest in your success but aren’t directly paid or rewarded for any success your business might realize, such as associations, the media and other organizations that sell to your customers.

Another approach is to research is SWOT analysis, meaning analysis of the strengths of your industry, your product or service; the weaknesses of your product (such as design flaws) or service (such as high prices); and potential threats (such as the economy).

“[SWOT] enables you to understand the strengths and flaws, [everything] from internal information such as bureaucracy, product development and cost to external factors such as foreign exchange rates, politics, culture, etc.,” says Drew Stevens, a St. Louis professional speaker and consultant who works with entrepreneurs in researching and marketing their ideas.

“SWOT enables an entrepreneur to quickly understand whether their product or service will make it in the current environment.”

Whatever your approach to evaluating your idea, just be sure you’re meeting the research objectives you’ve outlined for your product or service. With those goals always top-of-mind, your analysis will help you discover whether your idea has any holes that need patching.
Checking Out the Competition

Assuming your research process has helped you uncover your competition, you now need to find out what they’re up to. Shenker advises becoming a customer of the competition, whether by shopping them yourself or by enlisting the help of a friend. “Visit their Web site and put yourself on their list,” she says.

“Talk to your competitor’s customers, too-ask them what they like or don’t like about your competitor’s product or service. If you conduct formal research, include a question like ‘Where do you currently go for that product or service? Why?’”

Your aim is to understand what your competition is doing so you can do it better. Maybe their service is poor. Maybe their product has some flaws-something you’ll only know if you try it out yourself. Or maybe you’ve figured out a way to do things better, smarter, more cost-effectively.

Find your selling point. It’s going to be the core of your marketing program, if and when you’re ready for that step. It’s also going to be what sets you apart and lures customers your way.

After all this-the idea stage, analysis of the idea, competitive analysis-you might find that your idea (and not your competitor’s, as you’d hoped) is the one with the holes. Does that mean you need to scrap the whole thing and resign yourself to life as an employee? “Not always,” says Keller. “Sometimes it just needs to be reworked or retooled.”

That can be disheartening if you’ve already spent X amount of hours in the idea stage, plus X amount of hours on market research-only to find that you’re not quite ready to get started after all. But taking the time to refocus your energies and determine why your idea needs some tightening is the best predictor of future success.

“No entrepreneur wants to hear that his ‘baby’ is flawed, but only by listening and reacting to feedback can he give his idea a chance for success,” notes Shenker. “Ask yourself, ‘Is this a weakness that can be overcome?’ If you can’t create true value for your customer and your business, then it’s time to pick another idea to pursue.”

Remember, though, that many ideas simply need some fine-tuning. Before you panic and start flipping through your idea books again, closely consider whether you can make this idea work. After all, there was a reason you thought of that idea in the first place. Some ideas that seem like they’ll be total duds after doing a little research end up being great successes.

“Ideas that seem like a flop are always interesting to me,” says Keller. “Sometimes you look into an idea and find it was just luck-but many times, you find the original founder had some clear insight into the potential. That insight was his or her focus, and it seemed to lead them to success.

“I’ve seen many people launch ideas that I thought were beyond foolish,” Keller adds, “but then I learned more about the idea, the customer and the vision-and realized the true risk being taken.”

When Your Idea Is Ready to Go

The market research you’ve conducted thus far ought to be a good indicator of where you need to go next with your idea. One key factor to consider is pricing. You want to do it competitively while also considering what the market will bear. For products or services that have a close competitor, Keller advises pricing with respect to the competitive position.

“Higher-priced positioning requires an idea with enough relevance and importance to customers to overcome the gap between your idea and the nearest competitor,” Keller says.

The beauty of being in business for yourself is that you have the option to make changes at will-so if a pricing structure isn’t working, you can alter it. “Price high to start-you can always drop the price down,” says Keller. “You can never go up.”

Shenker adds that you need to be sure your product or service is delivering enough value to command the price you set. If possible, test different pricing offers as you go, and determine what works best.

When you’re ready to get started, be sure you’re selling where your target market is likely to buy. “Your marketing plan and budget should include a well-crafted distribution strategy,” notes Shenker. If you’ll sell over the Internet, budget for media to drive new customers to your site. If you’ll sell via retail distribution, you might need workers with industry experience to help you reach your target market.

Remember, too, that you can always seek help in this long, arduous process of bringing an idea to fruition. The Internet, your local library, the U.S. Census Bureau, business schools, industry associations, trade and consumer publications, industry trade shows and conferences, and new-product development firms can be invaluable sources of information and contacts.

“It’s just a matter of seeking knowledge from as many sources as possible,” notes Keller.

It’s also a matter of putting your ego aside and being willing to create a business that will not only survive, but thrive. “If you have an idea, don’t be afraid to refine it, retool it, rethink it,” adds Keller. “The more you do before you launch, the less you’ll have to do [afterwards], and the less painful the lessons tend to be.”

Get Started

Use the following online and offline resources to help you determine if your idea is a good one.

• Entrepreneur Assist offers a collection of free business planning and productivity tools, letting you access free business books, bookmark your favorite articles, schedule events and reminders and share documents to assist you in your idea evaluation and market research process.
• How to Create a Marketing Plan, will help you strategize your marketing efforts.
• The U.S. Census Bureau has the stats and demographics you need to know.
• FirstGov.gov is a well-designed, easy-to-navigate portal to the government online. Click on the tab that says “Businesses and Nonprofits.”
  Your local Chamber of Commerce can be an indispensable resource for local information for your new business.
• The Encyclopedia of Associations by Gale Group can be found in libraries, and is an essential tool for locating your industry’s associations. Also search on Google, and be sure to check whether the association has a trade publication.
• At TSNN.com, you can access a searchable database of trade shows worldwide.
  Entrepreneur’s Top Colleges listing can help you find a local school that offers entrepreneurship studies.
• Two of the greatest resources known to entrepreneurs are the Small Business Development Centers (SBDCs) and SCORE (Service Corp of Retired Executives). Each SBA service offers free and low-cost help to small-business owners and entrepreneurial wanna-bes, and should have a local office near you.

Who can sell a service? Anyone and everyone. Everyone is qualified because each of us has skills, knowledge or experience that other people are willing to pay for in the form of a service; or they’re willing to pay you to teach them your specific skill or knowledge.

Selling services knows no boundaries–anyone with a need or desire to earn extra money, work from home, or start and operate a full-time business can sell a service, regardless of age, business experience, education or current financial resources.

What Are the Advantages of Selling Services?

There are many advantages associated with starting your own business selling services. Perhaps the biggest advantage is you become your own boss, take control of your future, and in effect become the master of your destiny.

I’ve been self-employed for a number of years, and for me the lure of self-employment is the freedom and independence that calling the shots affords, which can be difficult to achieve when you work for others.

Operating your own business also gives you the potential to earn more money, in some instances two, five or even ten times more than you’re currently earning. Why? Simple duplication. When you work for someone else, there is only you and only so many hours in the day to work for an hourly wage or a salary.

When you operate a business, you can duplicate yourself by hiring employees and salespeople to increase revenues; you can duplicate your customers and find more just like them to purchase your services; and you can duplicate your business model and open in new geographical areas to service more customers and earn more profit. These are all things you can’t do when you work for others, and if you do, chances are it will financially benefit the boss a lot more than you.

Capitalize on Your Skills

Don’ t worry if you lack business skills and experience in areas such as time management, personal-contact selling, negotiating, bookkeeping and the ability to create effective advertisements. There’s no question these are all important skills to have, but at the same time they’re also skills that with practice can be learned and mastered. More important is the question,

“What skill(s) do you have that can be sold as a service?”

Any skill(s) you possess can be your best, and by far your most marketable, asset. If you know how to safely walk a dog, that’s a skill people are willing to pay you for. If you know how to plan and throw one heck of a party, that’s also a skill people are willing to pay you for as their event and party planner. If you know how to play the piano, this is a skill other people will pay you to teach them.

If you know how to sell products and services online, once again that’s a skill that people are willing to pay you for as an online marketing consultant. All are examples of skills that people pay other people to perform, or teach them how to learn.

Every person has one or more skills other people are prepared to pay for in the form of a service provided to them, or to learn. However, with that said, most people have a tendency to underestimate the true value of their skill sets and experiences.

You have to remember, what may come naturally to you may not come so naturally to others. Likewise, you might think your particular knowledge or expertise may be of little value, but if someone else needs or wants to learn about that knowledge, it’s very valuable to them.

Selling Services Part Time

The first option is to start off selling your services on a part-time basis, which is a good idea because it enables you to eliminate risk by limiting your financial investment. It allows you to test the waters to make sure that being self-employed is something you enjoy and want to pursue.

If all goes well, you may decide to transition from your current job, devoting more time to your new enterprise each week, all the while decreasing the time at your current job until you’re working at your new business on a full-time basis. There are many advantages to starting off part-time, including keeping income rolling in, taking advantage of any current health and employee benefits, and building your business over a longer period of time, which generally gives it a more stable foundation.

If it turns out you’re not the type of person who’s comfortable being the boss, you’ve risked little and still have the security of your job.

Of course, if your ambitions are only to generate extra money to pay down the mortgage, save for retirement, put yourself through school, or pay off credit cards, selling services part-time is the perfect choice. It’s important to do what you want to do and what best suits your individual needs. If selling services part-time works for you, then go for it.

Selling Services Full Time

You can also jump in with both feet and start your new business selling services full-time. This option would appeal to people without a current job or people who are confident about being the boss and operating a business. There’s nothing wrong with starting off full-time, especially if you take the time required to research the business, industry and marketplace.

You must also develop a business and marketing plan, and have the necessary financial resources to start the business and pay yourself until it becomes profitable.

The main downside to starting full time is risk. If you jump ship and leave your job, you risk loss of current employee benefits and have no guarantee of steady income, contributing spouses or partners excluded. The upside to starting off full-time is potential rewards, including the opportunity to make more money than you can at your current job, and to gain control of your future.

Your decision to operate your new business on a full-time basis will largely be determined by your current financial situation, your own risk-reward assessment, and your goals and objectives for the future. Jumping in full-time will appeal to the true entrepreneurial mindset–people who prefer to blaze the trail rather than follow behind in the wagon train.

Selling Services Seasonally

Another option is to start a seasonal business selling services, which can be operated with a full- or part-time effort. But most are run full time to maximize revenues and profits over a normally short time span. Examples of seasonal businesses selling services would include snow removal in winter, yard maintenance in summer in northern climates, income tax preparation service in spring, and serving as a vacation property rental agent. Just about any business can be run seasonally or occasionally, but some are obviously better suited than others.

A seasonal venture will appeal to people who want the ability to earn enough money during part of the year in order to do as they please with the remainder of the year–travel, pursue education, or work a job in another season.

The potential to earn a very good living operating a business only part of the year is a genuine opportunity, as proven by the thousands of people who are currently doing it. The main downside to a seasonal business, especially one that can be operated year-round, is that you don’t want to spend thousands of dollars and hundreds of hours promoting your business only to shut it down for half the year, sending current and potential customers running to your competitors while your business is closed.

Selling Services to Supplement Your Retirement

The fourth option is to sell services to supplement your retirement income or just to have fun and stay active in your golden years. Retirement businesses have become extremely popular in the past decade, mainly because the cost of living has dramatically increased, often outpacing wages and retirement savings.

The result is that many people head into retirement needing a little extra income to cover expenses and provide an adequate lifestyle or to maintain their pre-retirement lifestyle.

People are living longer and much healthier now than in decades past, and because of this many are seeking new challenges; starting and operating a business is a way to stay active physically and mentally. Older people also have a proverbial ace up their sleeves when it comes to starting a business and selling services: a lifetime of knowledge and experience that can only be acquired by spending lots of time on this planet.

Because of the value of these skills, many people are willing to pay big bucks for them. This is why many people who are reaching or have reached retirement age have chosen to start a consulting business selling their experiences, knowledge and skills for the benefit of their clients.

Before you decide to get into business for yourself selling services, there are two issues to consider regarding financial compatibility–income and investment money. First, when deciding what type of service to sell, you have to consider how much money you want to earn and how much money you need to earn.

If you need to earn $75,000 per year to pay your personal expenses, there is little sense in starting a dog-walking service. Perhaps there are a few dog walkers earning this much, but it’s not a realistic expectation. How much money do you want to earn–that is, how ambitious are you?

Again, you must be realistic and relatively sure the service you choose to sell has the potential to generate enough income to live on in the short-term, and the potential to match your income goals in the longer term.

Income doesn’t have to factor into the business startup equation for everyone. If you want and need to earn only a little money from a part-time or retirement business, the income equation will not factor as heavily as other issues.

The second big financial compatibility issue affecting your decision about which business to start or purchase is the amount of money needed to start or purchase the business. Not only will you need to have or have access to the investment needed to get rolling, but you’ll also need extra money for working capital to cover day-to-day operating expenses until the business achieves positive cash flow. This can take a week, a month or even a year.

Ultimately, financial compatibility is important when starting a business and deciding what services to sell. If you cannot afford to start the business and don’t have the financial resources to pay operating expenses and your wages until the business can break even, you’ll probably have to look at alternative options, such as starting part time, choosing a different business to start, or waiting until you have acquired the money needed to get started.

Finding a Good Match

You also must be well suited to start and operate the business and services you’re considering providing. You and your business must be a good match. You may have an interest and even experience in a specific business or in providing a specific service, but that doesn’t necessarily make it a good match. Here are a few points to consider when determining a good business match.

• Do you have the financial resources to start or purchase the business, and enough money to pay the day-to-day operating expenses until the business breaks even and is profitable? If not, it’s probably not a good match, and you should consider alternatives.
• Does the business have the potential to generate the income you need to pay your personal expenses, and does it also have the potential to generate the income you want to earn? This is very important because if you can’t pay your own personal bills, you’ll soon be in trouble. And if, over time, you can’t earn the income you want to earn, you’ll lose interest in the business–a recipe for disaster.
• Are you physically healthy enough to handle the physical strains of starting and running the business? If not, you may end up having to hire people for the job, which can be problematic if the business revenues aren’t there to support both management and employee wages.
• Do you have experience in this type of business or service, and do you have any special skills that can be utilized in the business? You can gain experience and knowledge on the job but skills that can be utilized and capitalized upon right away are extremely valuable.
• Are there any special certificates or educational requirements to start and operate the business, and are these readily available? Find out the upfront costs associated with these, how they can be obtained, and the time frame needed to obtain specific certificates. Training and certification shouldn’t be viewed negatively because often the return on time and investment is substantially rewarded financially. Anything worth doing is worth doing well.
• Will you enjoy operating the business, and does it match your personality type and level of maturity? This is very important. If you don’t think that you would enjoy it, then don’t start. Again, the loss of interest in a business is almost certainly the kiss of death. You can’t stay motivated and rise to new challenges if you don’t like what you’re doing.

Are dreams of freelancing dancing through your head? If you’re nodding yes, now’s a great time to give it a whirl. As companies scale back on their expensive, benefit-heavy workforce, they’re increasingly turning to outside freelance help. If you’ve got expertise in the right areas, there’s a good chance you can parlay it into a freelance career by sharing your knowledge and skills with a variety of clients.

Let Freedom Ring

There’s no question about it; freelance doesn’t start with the word “free” for nothing. Freedom is a major perk of freelancing. As a full-time freelancer, you’ll work when you want. You can take vacations when you want, for as long as you want. Weekend getaways won’t have to be confined to weekends, and business suits are mostly a thing of the past. There’s no boss breathing down your neck, nagging you. And there are no irritating co-workers slacking off at the water cooler, driving you nuts.

But in exchange for all those freedoms comes risk and insecurity. As a freelancer, your next paycheck is never guaranteed. Anxiety about where the next job is coming from plagues many freelancers, no matter how seasoned. But insecurity comes with the turf, and dedicated freelancers learn to make peace with it.

The best way to ensure your freelancing future is to offer a service you know people want. Just because you’d like to do something doesn’t mean that there’s a ready made market for it.

“‘Follow your heart and do what you love’ is just a slogan. You need to get real,” says Kelly James-Enger, author of Six Figure Freelancing. “If you’re not offering a service people are willing to spend money on, you’re not going to be in business [for long].”

Search your local paper and the Internet to see who’s doing what you want to do, what they charge and who their clients are. Talk to everyone you know until you turn up freelancers doing what you hope to do. Then call them up and pick their brains about which segments of the market are growing and where most of their work comes from. This information is critical to helping you carve out a niche and fill a current opening in the market.

Think about this: Ten years ago, web designers made a pretty penny freelancing their services to corporations, but today the demand has lessened as all those laid-off dotcomers have created a glut in the market. On the other hand, small-business owners are more keen then ever to learn web design themselves, as are retiring baby boomers, so teaching web design may prove more lucrative than doing the actual design work right now.

Don’t Quit Your Day Job–Yet

Once you’ve decided what aspect of your field to freelance, take the time to establish yourself. “The biggest misconception people have is that they’re going to jump right into it and start making money,” cautions Laurie Rozakis. “Not true. Just because you build it doesn’t mean they’ll come.”

Rosakis, who is a freelance writer and editor, and the author of The Complete Idiot’s Guide to Making Money in Freelancing, says it can take months–even years–to develop a reputation and client base. For that reason, many freelancers start by moonlighting while still holding on to their day jobs.

“Everyone thinks it’s going to happen overnight, but I don’t know a single freelancer who immediately started making a six-figure income,” maintains James-Enger.

A good rule of thumb is not to give up your day job until you have between six months and one year’s worth of savings, more if you’re the sole support for your household. “Don’t leave your job until you’re confident you can pay your mortgage and healthcare and put money into a retirement account,” James-Enger advises.

Of course, moonlighting while working for your current employer can be tricky-especially if you’re freelancing in the same field. Let’s say you’re an advertising copywriter who wants to start freelancing on the side. You’ll probably need to tell your employer, who may require you to sign a noncompete agreement in which you promise not to steal, or “borrow,” clients. If, on the other hand, you’re an advertising copywriter who wants to do freelance Japanese translations, your employer probably doesn’t even need to know what you’re doing after hours.

Generating Business

As in any business, your freelancing career is only as strong as the sales you make. Finding clients is the number-one challenge for any freelancer just starting out. It’s almost a catch-22: How do you attract clients when you’ve never had any? Here are some practical steps that will propel you out of the conundrum and into business:

1. Develop a portfolio to demonstrate the scope of your skills. If that means working for no pay or low pay initially, do it. Samples of your work will be your best calling card.
2. Tell everyone you know–colleagues, friends, family, neighbors–about your new freelance gig. Referrals will make up the bulk of your business initially.
3. Join professional organizations–online or in the community–that serve your field. In addition to all the other benefits you’ll gain, you’ll also pick up insider tips of where to find work.
4. Join local organizations, like the chamber of commerce or Rotary club. “Creative people often overlook organizations like these, thinking they’ll be filled with stiff bankers and businesspeople,” notes James-Enger. “And they may be–but that’s who’ll be hiring you to do your creative work.”
5. Volunteer in the community doing something you love, and you’ll broaden your network of potential clients.
6. Cold call. Yes, everyone hates cold calling, but the reason freelancers need to do this is because it works.

Another important point to remember is that freelancing doesn’t solely mean doing the thing you love. It also means knowing how to sell and market your services. When starting out, about 90 percent of your time will be spent on sales and marketing tasks. “Work won’t just stumble upon you,” says James-Enger. “You can be as talented as anything, but it won’t mean a thing if you can’t sell yourself.”

Rozakis agrees. “A lot of people go into freelancing thinking, ‘I’ve got the talent.’ What they need to realize is a lot of people have talent. What makes a successful freelance business is how strong your client list is.”

And building a client base requires that you plug away tirelessly without getting discouraged. Expect rejection. It comes with the territory–and often. But don’t let that stop you from trying again.

“Think of a salesperson at The Gap who gives you a pair of pants to try that don’t fit,” says James-Enger. “A good salesperson doesn’t sulk away, dejected. She hands you another pair and another pair until you buy something.”

Get Serious

When you see that you’re starting to make enough money that your freelancing is becoming a viable career, it’s time to start putting the business building blocks in place that will ensure that you–and your clients–take your business seriously. That means going beyond ordering hot-looking business cards.

No matter what your field, contracts are important. Many freelancers overlook developing their own, instead letting clients design contracts or foregoing them altogether. That’s a mistake–and it can be a costly one.

“Protect yourself,” stresses Rusty Fischer, who wrote Freedom To Freelance. He recommends checking out contracts used by other freelancers you know, so you can borrow the best of what they’ve got and incorporate those ideas into your own contract. Then run your contract by a lawyer to make sure your rights are protected. “It’s well worth a few hundred bucks to get it right,” he notes.

Establishing an accounting system is also imperative. Not only will it help you keep track of what you’re due, but it will simplify your life. Freelancers are on the IRS radar anyway, so good record keeping will give you peace of mind and make any possible future audit less painful.

“Get a great accountant or [take a] community college course and learn software programs like Quicken to keep your books,” Rozakis recommends. “You skip this aspect of the business, and you’ll be very sorry.”

Depending on your industry, having a website may be helpful in marketing your services. If you have visual examples of what you do, say landscape design or theatrical costuming, a website will act as a portfolio and introduce your work to prospective clients. (Websites are obviously less useful to freelancers without visual examples, say, home inspectors or medical billing administrators.)

Know Thy Self

One of the most important decision you’ll have to make before fully committing to running a freelance business is to determine if this type of lifestyle matches your personality. “Know thyself,” says Rozakis. “Really think this through before you make a commitment to a lifestyle and work style you just may not be suited for.”

And while you no longer have a boss, you do have to answer to someone–yourself. That’s why self-discipline is key to taking your freelancing gig from an interesting hobby to a viable business. “It really helps to be a Type A personality because you have to be able to motivate yourself and manage your time,” says James-Enger. “You can’t be a slacker and have a successful freelance career.”

Tempting as it may be to cut out mid-afternoon for a movie or a walk with the dog, most days those kinds of things just aren’t going to happen. “Not only will you normally work way more hours per week as a freelancer, but your schedule probably won’t wind up being as flexible as you think,” warns Fischer. “Most of your clients are working regular hours, from 9 to 5. Being available to them means that most of time, you’ll be working very regular hours.”

The freelance life is a solitary life. If you’re someone who feeds off the energy of other people, freelancing may prove too lonely a road to travel. Fortunately, for those who seek them out, there are solutions to the lack of daily social contact. Many freelancers fill their need to interact with other people by taking on-site freelance gigs, where they work–at least temporarily–among other people. Others turn to freelancer support groups where they meet once a month over a cup of coffee to swap tales of glory and woe. And others work on collaborative projects with other freelancers.

It takes time to grow a freelance business; it takes time to establish yourself; and it takes time to make money. All of this can be nerve-wracking and cause countless sleepless nights. But with talent, patience, tenacity and a touch of luck, freelancing can be among the most rewarding–and lucrative–ways to make money.

“Would I ever go back to working for the ‘man’?” laughs James-Enger. “No way. For all the struggles and unknowns, I wouldn’t give up freelancing and be somebody’s employee for anything.”

Freelancing Options

Think the freelance life might be for you? The good part is, if you do it, there’s a good chance you can freelance it. Here are some of the most frequently freelanced gigs around:

• Accountant/bookkeeper
• Appraiser
• Cartographer
• Chef
• Computer programmer
• Corporate event planner
• Data entry/processor
• Editor/copyeditor
• Engineer
• Esthetician
• Film animator
• Financial planner
• Floral arranger
• Fundraiser
• Furniture restorer/repairer
• Grant writer
• Graphic designer
• Home inspector
• Interior designer
• Landscape architect
• Massage therapist
• Medical administration (billing)
• Package design
• Party planner
• Photographer
• Political consultant
• Private investigator
• Professional organizer
• Sales/marketing consultant
• Seamstress
• Set designer
• Telemarketer
• Translator/interpreter
• Tutoring
• Upholsterer
• Web designer
• Writer

It’s a great idea: You found the perfect niche market, lots of customers, profit potential galore, the ultimate location and a stellar e-commerce site.

The only problem — where to find all the products you need to stock your shelves.

This happens all the time with entrepreneurs. Even if you come up with a brilliant idea of a product you want to sell, there’s still the tiny detail of finding the actual product. You want to sell AAA but “Where exactly can I get a supply of AAA to sell and get it for a fair price?”

The good news is, finding what you need isn’t quite the needle-in-a-haystack task it’s envisioned to be.

“My experience is, there are a lot of existing channels used to match up manufacturers and distributors of products. Trade shows and trade magazines are two of the best,” says Roger Green, co-founder of Cullinane & Green Inc.

Trade shows alone offer multiple opportunities for you to not only spot upcoming trends, but also to network with potential suppliers and hopefully find just the right product source. The New York International Gift Fair, for instance, attracts thousands of exhibitors, organized by type of product. Attending a trade show also gives you the opportunity to demonstrate you mean business. “By being there, you establish yourself as someone being in business as opposed to being a consumer.

The overwhelming majority [of attendees] are serious buyers,” says Green, who, along with partner Joe Cullinane, has a diverse background in sales, marketing and senior management that’s familiarized him with the ins and outs of product sourcing. “You also get to compare prices across a range, and you get a good sense of the business without having to put a lot of air miles into it.”

Trade magazines, meanwhile, can be an inexpensive way to find companies with which you want to correspond. Scour them frequently for mentions of any companies that might offer the products you need, then try to find out whether they’ll be exhibiting at any upcoming trade shows you can attend.

Trade organizations or industry associations related to the products you’re interested in are yet another potential source of valuable contacts, including international companies. “[These organizations] have trade missions, and they have access to manufacturers from other countries,” says Green. He notes that one of their main goals is to match up buyers and sellers.

So how do you go about finding the right industry association? Check out these resources for help in locating the proper channels:

• Directory of Associations from Concept Marketing Group Inc.
• Gale’s Encyclopedia of Associations. And if you’re not interested in purchasing your own set, most large public libraries carry a copy in their reference department
• National Trade and Professional Associations of the United States

“You should also look at companies that are regional,” adds Cullinane, author of “21st Century Selling” and adjunct professor of marketing at DeVry University’s Keller Graduate School of Management. “[Look at] retail stores that are very successful in one [geographic] area and not selling anywhere else.”

Start by contacting someone at the company or store and asking them whether they might want to sell their product in your hometown. “If something’s been successful in one area, you’ll find the company will want to expand but just don’t have the resources to do it,” says Cullinane.

Image Counts

Finding the suppliers you want is just the first step toward stocking your shelves with the proper inventory. Next, you’ve got some impressing to do. “You have to be perceived as a company and not a consumer,” stresses Cullinane.

“You have to present yourself as someone who is seriously interested in building a business,” adds Green, who advises establishing yourself as a business entity as opposed to a sole proprietorship. ” ‘Inc.’ makes all the difference in the world in [the company extending you] credit in the future.”

Keep in mind, also, that some firms, especially international ones, often prefer working with registered wholesalers of their products as opposed to retailers, says Green, so be prepared to inquire with a particular company about how you might become one. Companies that offer this option to buyers will likely ask you to fill out a few forms and provide some details on your banking history and so forth.

You may need letters of credit and references in order to prove your ability to make good on your word. The advantage of becoming a wholesaler? Wholesale rates, which are often well below the retail prices of a given company.

When making that initial contact with a potential vendor, be prepared to talk about what you do and why they would want to do business with you. Letters of credit from your bank, and letters of reference from people who know you and can vouch for your credibility, are also key-those can help you get an appointment with the vendor in the first place. Green advises starting small:

“Find an easy one, and then build from there. If you start dealing with someone local who knows you and can see you, in a few months, you’ll have a track record and can use the first one as a reference. It’s like starting a fire: use kindling first, not the log.”

Look to your social network to determine whether you might know anyone who can help you. Make sure you tell friends and family what you’re doing-you never know who they might know. “It’s amazing the results you’ll get [when you spread the word],” says Cullinane.

One caveat: If you do business with someone you know, make sure you clearly establish the terms of the relationship from the start. As Green cautions, “It’s still a business relationship at the end of the day,” cautions Green.

“There’s a saying among lawyers: The best contracts are drawn between people who don’t trust each other.”

So enlist the help of an attorney who knows the ins and outs of drawing up the kind of contract you need-the money will be well-spent in the long run.

So You’ve Got a Supplier

Once you’ve found the companies that manufacture the products you want to sell, you need to get samples and be sure they’re exactly what you want. “Be prepared to invest in that,” says Green. “Sometimes companies will supply samples at no charge, but not always. And don’t go looking for freebies-that can ruin your credibility.”

How many vendors do you need? “Just enough,” says Cullinane. In B2B situations, you’ll likely want at least two suppliers, maybe three. It’s a good idea to have backup suppliers in case something ever falls through with one of your regulars. “A lot of times you build your business around one supplier,” explains Cullinane, “and if something [happens to them], you could be out of business.”

Above all, remember the most important element of a successful retail business: the customer. Even if you’ve got a handle on where to get your product, you’ll want to make sure you haven’t forgotten the crucial step of determining whether that product will be met with a warm reception. “An entrepreneur needs to look at ‘What do my customers need that they can’t get?’ ” says Cullinane. “Satisfy that niche. Be the person who provides that.”

Click Away

• Use the Web in your search for suppliers. “With powerful search engines like Google, you can locate suppliers all over the world,” says product-sourcing guru Roger Green. “It’s a low-cost way to go exploring.”
• TheThomas Register online will help you locate companies and products manufactured in North America. You can also place orders online and view thousands of online company catalogs and Web sites.
• Don’t overlook the U.S. Department of Commerce in your search for suppliers. “Let them know you want to do business, and they’ll do some match-ups,” says Green.