Entrepreneurs Find New Way To Finance Dream

Statistics show that more than one million people in the United States start a new business each year. That number would be much higher if all the would-be entrepreneurs had the financing required to get a business up and running. In order to accomplish their dream of business ownership, entrepreneurs are finding new and innovative ways to finance their new ventures.

According to Leonard Fischer, President/CEO of BeneTrends, one of these new financing options is the use of a person's existing retirement funds-a pension, profit sharing, 401(k), IRA-which allows that person to start the business he or she has always dreamed of without tax penalties, consequences or mountains of debt.

Under the Employment Retirement Income Security Act (ERISA), retirement funds can be transferred into usable capital for business investments or operations. If a person has more than $40,000 in a retirement account and is not currently employed by the company that holds those funds, he or she qualifies for this Small Business Administration (SBA)-recognized financing approach to start a business.

Retirement funds can be used for any business purpose, including:

• Purchasing a franchise or existing business

• Start-up expenses, such as purchasing property, equipment, etc.

• Working capital, including paying salaries, franchise fees, etc.

• Business expansion, such as funding additional franchises, locations, etc.

• Equity toward SBA or other loans.

The thought of dipping into one's retirement can cause some apprehension. Through this investment strategy an individual actually has more control over his/her retirement-instead of gaining minimal growth dependent on the stock market, those savings are actually being invested in one's own business. This approach often allows an individual to set aside more money for retirement than ever before.

"Today's entrepreneur faces an environment of tremendous competition, complexity and opportunity, so starting a business the right way is more important than ever," says Dr. Germain Boer, Director of Vanderbilt University's Center for Entrepreneurship. "This financing method is a good option for an individual who has accumulated funds in his/her retirement accounts."

The entire process generally takes two to four weeks to be completed, and can be done by phone, email, fax, FedEx and regular mail.

Working with an experienced employee benefits plan expert, starting a business is as simple as these four steps:

Step 1: Establish a C-corporation.

Step 2: The new corporation creates a retirement plan.

Step 3: Funds are rolled over into the corporation's new retirement plan.

Step 4: The new retirement plan purchases the stock of the corporation.

"So many people have watched their dream of owning their own business go out the window due to lack of funding options. We help people achieve that dream every day using money they already have," says Fischer.

If you're ready to explore this innovative financing option, be sure to consult an expert to guide you through the specialized process

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Why Even A Simple Contract Can Save Your Bacon

Every business owner says it; "Do I really need a written contract?" The answer is "YES, YES and YES!" Using a written contract is like buying insurance for your business deals, but much better.

What Is A Contract?

Simply put, a contract is an enforceable agreement between two or more parties. The contract contains the promises made by the parties to one another, which is legally known as "consideration." These promises define the relationship being undertaken as well as what happens if the business relationship doesn't work out. If one party fails to act according to their promises, then they have "breached" the contract and can be found liable for damages. The damages typically equate to what the non-breaching party would have received if there had been no breach.

Oral Contract v. Written Contract

You go to a party with a friend and meet someone interested in your product or service. Eventually, you agree to provide him with 1,000 units of your product in exchange for a discounted price. You have created what is known as an "oral contract." He has promised to order products and you have promised to provide them at a discounted price. Is the agreement worth anything? Unfortunately, the answer is probably no. Why? In most states, oral contracts are not enforceable if they carry an inherent value in excess of $500. Since it is so difficult to establish the terms of an oral contract in a dispute the legal system tries to discourage them. In fact, this legal restriction is generally known as the "Statute of Frauds."

Turning back to our example, what if you thought you were going to give a 10 percent discount and he thought it was 20 percent? What if you can't resolve it and he insists you provide the discounted products? You will end up in court with the dispute coming down to which party the judge or jury believes. Are you really willing to take that gamble?

With even a simple written contract, you can create a clause containing language that states you will give a 10 percent discount. If the dispute ends up in court, he is asked if his signature is on the bottom, the clause is read and you win. The contract should also contain a clause requiring the "prevailing party" to be reimbursed for their attorneys fees and costs. In short, he has to pay your legal bills as well.

An additional benefit to using a written contract is the due diligence element. I realize you will be shocked to learn that there are unethical businesses. In negotiating a contract, very specific requirements are put in writing. What if the other party starts squirming? It may be a sign they are unable to meet their obligations. Might that give you pause before you commit to tying up your inventory? You can save yourself a lot of headaches by discovering this information in advance.

In summary, even a simple written contract should be a mandatory bullet in your arsenal. Much like car insurance, you will be glad you have one if a business transaction falls apart.

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5 Tips for Mom Entrepreneurs: How to Make and Take Time for You

You are busy at both work and at home. Some days it may seem impossible to find time for YOU. You may wonder how other busy Mom Entrepreneurs make time for themselves, but you don't have time to stop and ask. Here are four quick tips:

If it's too late and you are already stressed…

1. Take a break.

Have you ever been overwhelmed and feel you can't stop for fear you will fall further behind? When you're in a high-stress situation, your thinking is often cluttered making you less productive. Michele Dortch, The Integrated Mother, suggests that you take a break when you become stressed. Whether you choose a 15-minute nature walk or a full day doing activities you love, stopping can actually provide amazing clarity and help you complete your tasks on time. This may seem counterproductive, but it really works!

To prevent going on overload, try the following tips on a regular basis…

2. Take time out to socialize each week.

Alice Seba of Mom Masterminds advises taking time out is invaluable to the Mom Entrepreneur. Alice makes a point to have a few opportunities to socialize each week-with girlfriends, her partner, or to just have some time alone. It revives her and makes her more focused when she comes back to being a mom or a businessperson. Alice says, "All work and no play not only makes you a dull mama, but it makes you a stressed out and ineffective one, too!"

3. Take a few "Mommy Minutes" as often as possible.

Ponn Sabra, author of Empowering Women to Power Network, puts herself on "time out" and takes "Mommy Minutes" as often as possible. Ponn sits in a self-made sauna in the bathroom with the hot shower running or enjoys a favorite goodie (she sometimes hides special ice cream sandwiches in back corner of her freezer where no one, even her husband, can find them.)

Ponn also insists that "adults need naps, too!" Whether for ten minutes or forty-five, it is important just to take a nap. The revitalization you receive from a catnap is very powerful. If you are unable to nap in the middle of a chaotic day, it is important to take yourself out of the situation to regain focus. You will have more energy if you meditate and clear your head.

4. Go "off duty" regularly.

In Linda Goodman Pillsbury's Survival Tips for Working Moms, she recommends choosing a regular time when you are "off duty." For example, you might say that after 8:30 every night, the kids cannot bother you with "Where are my blue jeans?" "I need cookies for a school party tomorrow," etc. (Of course, you are there for emergencies.) Children will soon learn to ask for what they need before you go off duty or wait until the morning. This works on very young children up to teenagers--but you should make exceptions for talking to the kids when they come in from a date!

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