I was fascinated by the analysis of the Obama campaign. In many ways, Obama’s campaign and its success is a big, bright, “LCD sign” of the times. New media has come of age in a very public way.

Most people seem to agree that the campaign used a number of techniques to capture an audience and even inspire those traditionally lacking enthusiasm for politics. Some of my favorite attributes are:

Audacity – the fact that Obama wasn’t afraid to “redefine his target audience” and go after states like Indiana who this November voted for a Democrat for the first time in 44 years.

Mobilizing Large Numbers and doing it “Grass Roots” – unprecedented fundraising success by generating large numbers of small donations rather than small numbers of large donations to raise more than an estimated $600 million (McCain raised an estimated $250 million).

The Message Consistency – the message never wavered from the idea of being an “antidote” to the status quo.

But perhaps the most obvious and (to a techie like me) inspiring elements of witnessing this campaign was its focus on social technology to support and propel all of the other techniques.

The use of “new media”, from friend building on Friendster to the seemingly simple text message, proved to be a powerhouse for the campaign, as it extended the concept of “Team Obama” far beyond campaign headquarters literally into the hands of millions of Americans who voted and vocalized with their typing fingers.

For all the small business owners who couldn’t help wondering, wow – can I do that? My answer is Yes you can! (Sorry couldn’t help myself).

In taking a closer look, the technologies used form a rather familiar list:

• Official Web site: http://www.barakobama.com and http://my.barakobama.com
• Text messaging strategy – enabled via collecting phone numbers on a mass scale
• LinkedIn: http://www.linkedin.com/in/barackobama
• Flickr: http://www.flickr.com/photos/barackobamadotcom/
• Facebook: http://www.facebook.com/barackobama
• Twitter: http://twitter.com/BarackObama
• YouTube: http://www.youtube.com/user/BarackObamadotcom
• Meetup.com: http://barackobama.meetup.com/

The list reads like a “who’s who” of social media marketing.

But the real power in these technologies is understanding that the goal is not just to “set up” one tool or another, but to understand each tool’s potential. That potential in the Obama campaign was brought to fruition by:

• Having a consistent message
• Providing free and open access to “making a connection”
• *Always* keeping the tool up to date
• Providing pertinent digestible bytes of information that could be read, downloaded, passed on
• Leveraging the sheer quantity of enthusiasts and supporters on each tool to disperse messages almost instantly across an unbelievably wide, new network of venues and communities that hasn’t been seen since the invention of television.

Think about the leverage that a database of 948,000 people on MySpace and 3.1 million people on Facebook provides when you have a message to communicate (and consider that vs. McCain’s 221,000 on MySpace and 600,000 on Facebook).

As you think about your business and consider the challenge to build brand, generate buzz and stay on the radar as a small business owner with limited time and a limited budget, there are some very simple lessons to learn here:

1. Everybody needs a team. Whether you’re trying to build a team of millions of voters or a few thousand supporters of your business, build a team by building a venue for them to get involved. Even the simplest involvement can be powerful.
2. Email, the Web, and cellular technology have created an unprecedented venue for that involvement. Know who should be on your team and know the different ways they like to be involved.
3. Use wisely. Learn how these technologies work and learn by example how they can be leveraged to build a community of supporters for you.

This is an advantage that won’t last forever. As businesses gain competency in these techniques and learn to invest wisely, these techniques will slowly become standards rather than competitive advantages.

But it is possible for a growing small business to build a strategic, cost-effective and impactful social media campaign. As “Team Obama” has shown – yes, you can.

Maisha Walker is the Founder & President of message medium, a 10-year old New York City Internet Strategy firm that focuses exclusively on Small Businesses.  You can follow Maisha on Twitter or learn about her upcoming Web site and Internet Marketing Classes.

Last night we were talking about getting angel investment, and valuation, which is one of if not the most important points in the discussion. Valuation is essentially price.

Say you want to bring in $150,000 from an angel investor. The immediate question from the investor will be something like: “at what valuation?” Sometimes that’s called “pre-money valuation,” because the instant the deal happens the valuation will change into post-money valuation, which is always higher — because your company just got some new cash.

Your answer sets your deal equivalent of an asking price. If you say $500,000, then you’re offering the investor 30% of your company for $150,000. If you say $300,000, you’re offering 50%. If you say $1 million, then you’re only offering 15%.

Which leads to the question:

So how do I know? How do I set valuation appropriately? What is that based on? Is it some multiple of sales, or intellectual property, or what?

And that’s a good question, and very hard to answer. Sure, you want some compromise between what you want to give, as a percent of ownership in your company, and what investors would want to buy. Investors will simply say no if it’s not an attractive offer. But that’s still very vague.

• In the case of an existing business, with some history, you do have some formulas you can use. For a great site on that business interpretation of valuation, for existing busineses, I suggest bizequity.com, the zillo of small business.
• When we’re talking about startups, however, you don’t have history and you can’t really apply formulas based on sales, or revenue, or even intellectual property (although that could be more relevant).

So here’s my concrete suggestion:

1. Calculate starting costs. That’s two lists, the expenses you have to incur and the assets you have to have at the starting point — except cash. Leave that blank for a bit.  Add those all-except for cash assets to the starting costs, to get an amount, a number in dollars.  Click here for a lot more on that.  

   So, for example, in the illustration here, that would be about $40,000. Yes, I know it says $38,750, but this is just an estimated guess; always round up. You never guess just right.  

2. Calculate cash flow through the lean period at the beginning, before your sales cover your costs.  Make a good guess at how much money you need to cover the deficit spending to get you to an operational month-by-month break even level of cash. That’s where the cash requirement number in the illustration came from: it seemed like this company would need about $400,000 to survive from startup to break-even.  You can’t see much in the chart below, because it’s small, but it shows a projected 12 months of cash flow (in blue) with a minimum balance, a deficit (in red), of about $400,000.

   

3. That gives you a number. In this case, it’s $400,000. That’s what your cash flow shows you you’ll need to get to cash-flow break-even. In the last two months, the cash flow is positive, so the negative balance starts shrinking. With that estimate as a best guess, you go back into your startup costs calculation, and add in the cash required. It’s $400,000. You can see what that does to the startup costs worksheet in the next illustration here.
4. Having done that, you now know that you need about $500,000 from investors (again, technically it’s $458,750, but you’re using best-guess estimates, so round up.) Set that as the amount of investment you’re seeking. Then — and here it gets hard, to be sure — you need to decide how much of your company you’re going to offer to an investor in exchange for that $500,000.

5. Get some help here if you can. Ask somebody with experience in startups, or dealing with angel investors, or both. Ask an attorney you can trust, who should also be somebody with experience. The thing is, how much of your company you offer to investors is about a compromise between what you’d like — none, free money — and what will entice the investors to write checks.

   At this point a lot depends on your overall business offering, the cards your company brings to the table. Investors want as high return as possible, with as little risk, but in relation to return. How experienced is your team? How defensible is your product? How rich is the market? All these factors determine what kind of a deal will be acceptable to investors.

   • Let’s say, in this case, you’re new at startups, you have very little track record, and you want to attract an active angel investor as a partner. So maybe you set your initial valuation at $750K, meaning you’re offering to give away 2/3 of your ownership to get the money you need. You’re being realistic about what will attract an investor. You better really, really, like that investor, because he or she will essentially own your company. But this is a hypothetical case, and without a lot of experience and defensibility, that may be the best you can do.
   • Or maybe you’ve got better cards to play: you’ve got a team with startup experience, and a defensible new product, with some intellectual property, and it looks like an attractive market. That makes you able to set a stronger valuation, and maybe — we hope — still make it an attractive offer to investors. So maybe you say you’re valuing it at $1.5 million. You’re offering investors one third of your company for $500K.

So there’s a quick and (I hope) simple summary of how you set the initial (pre-money) valuation when you want to attract investment.

What kind of business is right for you? We lay out the top new business ideas for different personalities and situations.

Home based business ideas: low-cost, low-risk

Some kinds of legitimate businesses are easy to start on a small budget. A consultant, for example, is anyone who knows how to do something better than others, and has the gumption to market himself – as well as $14 for a box of business cards. Similarly, a professional organizer needs a talent for decluttering, a couple of classified ads (or even better, free word-of-mouth), and not much else.

In general, service business ideas offer a nice mix of low buy-in and immediate returns. If you want to test the waters in an area you love, but aren’t sure you want to invest your retirement savings in your new business idea, consider the following:

• Consulting
• Professional organizer
• Petsitter
• Arts and crafts maker/seller
• Photographer
• Tutor
• Handyman

Read more about home based business ideas…

Internet business ideas: high-tech, high reward

Successful small business startups often start with the existing skills of the founder, turned to a new business idea. If you already have a talent for design, finding bargains, doing research, or connecting people with each other, you may be able to take those skills online to create a new Internet business.

Remember, the key to success is not usually having a new idea, but implementing it well, getting customers, and wowing them so that they come back for more and recommend you to others. If you’re willing to learn the basics of html, Search Engine Optimization, website marketing, and online sales, the following Internet business ideas might be for you:

• Website designer
• eBay retailer
• Internet researcher
• Recruiting

Read more about Internet business ideas…

Read articles on running an online business

Small business ideas, big dreams

Sometimes a new business idea can come from a long-held dream to turn a fun hobby into a profitable life’s work. However, most of these small businesses require significant time, energy, and initial investment to begin, so think carefully about your commitment and do your research before you start.

• Restaurant or Caterer
• Retail storefront
• Home daycare

Read more about starting a Restaurant

Read sample plans for Retail and Online Stores

Read sample plans for Day Care Services and Children’s Products

New business idea: start-up articles

The best business for you is one you love, and are prepared to make a major commitment to. Many small business owners describe starting a new business as more demanding than having a new baby – you have to be prepared to give it your full energy, time, and attention at any time of the day or night. The following articles give you tips on choosing the best business idea for you:

The Right Business for you by Nolo
The folks at Nolo give advice on finding the right new business idea for your interests and risk tolerance.

Top 15 Questions from SCORE
So, you have a new business idea, but you’re not sure how to start. These are the top questions from would-be entrepreneurs like you, with great answers from the experts at SCORE.

Business Startup Strategy
Run your new business idea through a quick feasibility analysis with this short list of questions you will need to answer about your customers, your business goals, and your finances.

Articles for implementing your new business idea

Do I Need a Business Plan?

Know Your Industry Before You Start Your Business

Planning tips from Palo Alto Software customers

How to Form a Corporation

Do You Need Funding?

Planning Tools

One of the most overlooked, forgotten, and intentionally ignored sections in a business plan is the analysis of the competition. Don’t kid yourself. You have competition. Everyone has competition. It’s a fundamental reality of being in business.

Here at Palo Alto Software, we have read hundreds of business plans over the years. Our Business Plan Pro business-planning software includes over 500 sample plans. Time and again we’ve read a plan where someone thinks they have a unique service or product and proclaims they have no competition. Wrong. So very wrong.

It might be direct competition; another business selling the same service or products. Say you sell house paint. There are probably several other paint dealers and home improvement stores in your area selling paint as well.

It might be indirect competition. Using the same example, stores which sell wallpaper, wood paneling or vinyl siding compete against you. Even the house painter/contractor may compete against you by convincing a “do-it-yourself” homeowner to pay for the job on a “time and materials” contract where the painter provides the paint, purchased from his favorite supplier.

An even greater challenge arises when “awareness” is your competitor. What if your new product or service is so innovative that potential customers don’t recognize the need, value, or desirability of your new offering? Now you must get their attention, educate them, and then sell to them.

Remember, before anything else, that every potential customer you identify has the option to not spend their money at all. They can choose not to buy from you, choose not to buy from anybody, or they can spend their money on something entirely different. Your competition is the savings account, the electric bill, the school tuition, the 401(k), the groceries, the kids’ allowance, next year’s vacation fund, etc.

A fundamental activity when you develop your business plan, whether it is a startup plan for the bank or your day-to-day operations roadmap, is spending some time thoroughly finding and analyzing your competition. From this you can evaluate what the other businesses are doing right and what they are doing wrong in marketing themselves, how well they are generating potential leads, and then converting those leads into customers.

Tim Berry discusses analyzing the competition in his book The Plan-As-You-Go Business Plan.

Competition and Buying Patterns
Explain the nature of competition in this market. This topic is still in the general area of describing the industry, or type of business. Explain the general nature of competition in this business, and how the customers seem to choose one provider over another. What are the keys to success? What buying factors make the most difference? Price? Product features? Service? Support? Training? Software? Delivery dates? Are brand names important?

Main Competitors
List the main competitors. What are the strengths and weaknesses of each? Consider their products, pricing, reputation, management, financial position, channels of distribution, brand awareness, business development, technology, or other factors that you feel are important. In what segments of the market do they operate? What seems to be their strategy? How much do they impact your products, and what threats and opportunities do they represent?

Competitive Comparison
Make a general comparison of your offering as one of several choices a potential buyer can make. Determine how your product lines and retail offering compare in general to the competition. For example:

• Your ski shop might offer better ski equipment than some other general outdoor store, or perhaps it is located next to the slopes and caters to rental needs.
• Your jewelry store might be mid-range in price but well known for proficiency in appraisals, remounts, and renovation.
• Your hobby shop has by far the largest selection of model trains and airplanes.

In other words, you want to know how you are positioned in the market. Why do people buy from your business instead of from others in the same market? What do you offer, at what price, to whom, and how does your mix compare to others.

Think about specific kinds of benefits, features, and market groups, comparing where you think you can show the difference. Do you sell better features, better price, better quality, better service, or some other factor?

For a marketing perspective on competition, visit John Jantsch’s Duct Tape Marketing and do a search on competition. Here is one of the many good articles from the list; Analyzing your competition.

Adapted from a post originally published on the Business in General blog.

One of the most economical ways of starting up is a home based business idea. What business idea is right for you? The best business for you is one you love and to which you are prepared to make a major commitment.

Many small-business owners describe starting a new business as more demanding than having a new baby – you have to be prepared to give it your full energy, time, and attention at any time of the day or night.

If you are thinking about a home based business idea, you’re not alone. Home based businesses are some of the most frequently searched on Bplans.com. Each section below includes sample business plans, business-planning tools, startup kits, and other online resources that are specific to this business idea.

From consulting businesses to personal services to pet care to yard care to computer care, home based business ideas are one of our most frequently searched startup category. The following resources can help you turn your idea into a reality.

Sample Home Based Business Plans
We have 35 different sample plans for home based business ideas, from online administrative assistants to bed & breakfasts to Tarot readers to wedding planners. All are plans for business ideas based in the owners’ homes, and 12 of these home based plans can be read in full online. See the full list of sample plans.

Start a Home Based Business Resource Page
Our start-a-home based business page contains a variety of resources and other tools that will help you effectively write a home based business plan and get your business going.

Business Startup Articles
No matter which direction you are thinking about pursuing, the following articles give you general tips and strategies to help you get started with your business idea.

The Right Business for you by Nolo
If you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: start a venture you know…

Top 15 Questions from SCORE
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics…

Business Startup Strategy
…would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible…

If you are thinking about an Internet business idea, you’re not alone. Internet or online businesses are some of the most frequently searched on Bplans.com. From strictly Internet stores to websites to complement physical stores and companies to eBay-like auction sales, business ideas on how to start an Internet business are one of our most frequently searched startup category.

What business idea is right for you? The best business for you is one you love and to which you are prepared to make a major commitment. Perhaps it is an Internet business idea.

Many small-business owners describe starting a new business as more demanding than having a new baby – you have to be prepared to give it your full energy, time, and attention at any time of the day or night.

Each section below includes sample business plans, business-planning tools, startup kits, and other online resources that are specific to this business idea, and can help you turn your idea into a reality.

Sample Internet and Online Business Plans
We have over 500 different sample plans, in many industry categories. Some are pure-play (exclusively Internet businesses), and some brick-and-mortar (businesses with a physical storefront or office and websites)  and 125 of these  plans can be read in full online. See the full list of sample plans.

Start an Internet Business Resource Page
Our start-an-Internet business page contains a variety of resources and other tools that will help you effectively write an Internet business plan and get your Web business online.

Other Internet Business Articles
This Bplans.com page, Running an Online Business, contains many articles and tools to help you develop business plans for your Internet business, marketing your e-business, legal issues, and improving your website.

Business Startup Articles
No matter which direction you are thinking about pursuing, the following articles give you general tips and strategies to help you get started with your business idea.

The Right Business for you by Nolo
If you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: start a venture you know…

Top 15 Questions from SCORE
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics…

Business Startup Strategy
…would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible…

Some business ideas come from a long-held dream to turn a fun hobby into a profitable life’s work. However, most of these small businesses require significant time, energy, and initial investment to begin, so think carefully about your commitment and do your research before you start.

If you are thinking about any of the following small business ideas, you’re not alone. These are some of the most frequently searched on Bplans.com. Each section below includes sample business plans, business-planning tools, startup kits, and other online resources that are specific to each business idea.

Restaurant Small Business Ideas

From cafes to kiosks to fast food to takeout to full-service eateries, business ideas on how to start a small business involving food are our most frequently searched startup category. The following resources can help you turn your idea into a reality:

• Sample Restaurant Business Plans
  We have over 40 different restaurant-style sample plans, and 20 of these restaurant plans can be read in full online. See the full list of restaurant sample plans.
• Start a Restaurant Resource Page
  Our start-a-restaurant page contains a variety of resources and other tools that will help you effectively write a restaurant business plan and get your business cooking.
• Other Restaurant Articles
  This article on marketing your business includes an example about obtaining statistical research on restaurants in your area, as well as suggested agencies to contact for more up-to-date information.

Clothing Small Business Ideas

Coming in a close second are requests for small business ideas involving clothing. And when you think of it, food, clothing and shelter are essential elements of survival, so it makes sense.

• Sample Clothing Business Plans
  Check out our list of clothing-related sample business plans for inspiration and ideas, including traditional retail as well as online businesses.
• Clothing-Related Planning Articles
  Tim Berry, business-planning expert, includes a couple of examples of entrepreneurs creating a small business idea by helping people who hate to shop. Check out his “elevator pitch” article series and see for yourself.

Photography Small Business Ideas

Some people have a natural eye for capturing images on film. If your small business idea involves photography, review the sample business plans for photography businesses. Also, since many budding photographers start out working from home, you should also review the following resources on home-based businesses. And the photograph studio resource page gives additional tools and kits that may be just the right fit for you.

• Sample Photography Business Plans
  Check out the variety of photograph-related sample business plans available, including pet photography.
• Start a Photography Studio Resource Page
  Our start-a-photography page contains a variety of resources and other tools that will help you effectively write a photograph business plan and get your business in focus.
• Start a Home-Based Business Resource Page
  If you are thinking of starting a photography businesses from a home office, this resource page includes additional sample plans from a variety of home-based businesses, including photography, as well as information on start-up kits and articles specifically tailored for home-based businesses.

Salon Small Business Ideas

The hair and beauty salon industry has expanded dramatically from the early days of barber shops, beauty shops and nail salons. Check out the different salon-oriented small business ideas in these sample business plans, for inspiration. And the start a salon resource page includes tools and kits that can help you get your salon business up and running.

• Salon Sample Business Plans
  Check out the variety of salon-related sample business plans available, including day spas, hair and beauty salons, and tanning salons.
• Start a Salon Resource Page
  If you are thinking about starting a beauty salon or spa business, this resource page includes additional sample plans as well as information on start-up kits and articles specifically tailored for this business type.

Small Business Startup Articles

No matter which direction you are thinking about pursuing, the following articles give you general tips and strategies to help you get started with your business idea.

• The Right Business for you by Nolo
  If you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: start a venture you know…
• Top 15 Questions from SCORE
  Research of successful entrepreneurs has documented that successful small business people have certain common characteristics…
• Business Startup Strategy
  …would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible…

What business idea is right for you? The best business for you is one you love and to which you are prepared to make a major commitment.

Many small-business owners describe starting a new business as more demanding than having a new baby – you have to be prepared to give it your full energy, time, and attention at any time of the day or night.

If you are thinking about any of the following business ideas, you’re not alone. These are some of the most frequently searched on Bplans.com. Each section below includes sample business plans, business-planning tools, startup kits, and other online resources that are specific to each business idea.

Restaurant Business Ideas

From cafes to kiosks to fast food to takeout to full-service eateries, business ideas on how to start a business involving food are our most frequently searched startup category. The following resources can help you turn your idea into a reality:

• Sample Restaurant Business Plans
  We have over 40 different restaurant-style sample plans, and 20 of these restaurant plans can be read in full online. See the full list of restaurant sample plans.
• Start a Restaurant Resource Page
  Our start-a-restaurant page contains a variety of resources and other tools that will help you effectively write a restaurant business plan and get your business cooking.
• Other Restaurant Articles
  This article on marketing your business includes an example about obtaining statistical research on restaurants in your area, as well as suggested agencies to contact for more up-to-date information.

Clothing Business Ideas

Coming in a close second are requests for business ideas involving clothing. And when you think of it, food, clothing and shelter are essential elements of survival, so it makes sense.

• Sample Clothing Business Plans
  Check out list of clothing-related sample business plans for inspiration and ideas, including traditional retail as well as online businesses.
• Clothing-Related Planning Articles
  Tim Berry, business-planning expert, includes a couple of examples of entrepreneurs creating a new business idea by helping people who hate to shop. Check out his “elevator pitch” article series and see for yourself.

Photography Business Ideas

Some people have a natural eye for capturing images on film. If your business idea involves photography, review the sample business plans for photography businesses. Also, since many budding photographers start out working from home, you should also review the following resources on home-based businesses. And the photograph studio resource page gives additional tools and kits that may be just the right fit for you.

• Sample Photography Business Plans
  Check out the variety of photograph-related sample business plans available, including pet photography.
• Start a Photography Studio Resource Page
  Our start-a-photography page contains a variety of resources and other tools that will help you effectively write a photograph business plan and get your business in focus.
• Start a Home-Based Business Resource Page
  If you are thinking of starting a photography businesses from a home office, this resource page includes additional sample plans from a variety of home-based businesses, including photography, as well as information on startup kits and articles specifically tailored for home-based businesses.

Salon Business Ideas

The hair and beauty salon industry has expanded dramatically from the early days of barber shops, beauty shops and nail salons. Check out the different salon-oriented business ideas in these sample business plans, for inspiration. And the start a salon resource page includes tools and kits that can help you get your salon business up and running.

• Salon Sample Business Plans
  Check out the variety of salon-related sample business plans available, including day spas, hair and beauty salons, and tanning salons.
• Start a Salon Resource Page
  If you are thinking about starting a beauty salon or spa business, this resource page includes additional sample plans as well as information on start-up kits and articles specifically tailored for this business type.

Business Start-up Articles

No matter which direction you are thinking about pursuing, the following articles give you general tips and strategies to help you get started with your business idea.

The Right Business for you by Nolo
If you want to work for yourself, but don’t have a particular business in mind, you’re probably wondering what kind of business you should start. Fortunately, the answer is always the same: start a venture you know…

Top 15 Questions from SCORE
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics…

Business Startup Strategy
…would-be entrepreneurs do a business plan. As a result of completing the plan you will be much better prepared and know whether or not your business idea is feasible…

This business name stuff matters. You don’t get to do it twice, or at least not without a whole lot of pain and suffering. Most companies live forever with the first name they come up with. Factors that make your company name work include practical legal ownership, ease of use, ease of marketing and branding, and simplicity, to name a few. The domain name can follow later.

Would a rose by any other name smell as sweet?

I hope you recognize the quote reference here. My view is that people spend too much anxiety on the name, and too often without much business impact.

Palo Alto Software started as Infoplan, Inc., then changed to Palo Alto Software, Inc. a year later, and that hurt a little. But the new name was so much better than the old one that we didn’t mind much. But when we moved from Palo Alto, California, to Eugene, Oregon, we didn’t consider–not even for a second–changing our name again.

So I’d like to take another look at the business of naming a new business:

1. Make sure you don’t bump into anybody else’s name. Who wants lawsuits? If you’re brand new, you don’t want to have a specific name that conflicts with an existing business. Do a really thorough Web search first and, if you can afford it, talk to an attorney. Don’t let the attorney have a blank check; get an expense estimate first.
2. Don’t get hung up on the Internet domain name. You don’t have to have your exact favorite website domain name to build a business. If it makes you feel better, compare the traffic of amazon.com (huge) to books.com (tiny). Or flickr.com (huge) and photos.com (tiny). The smaller the better, but try to avoid frequent misspellings (silent letters, fone instead of phone, phreak instead of freak, for example). We can’t get around paloalto.com for Palo Alto Software, but that one gets misspelled a lot, and we lose people searching for the misspelled “buisness plan” instead of business plan. We eventually bought “bplan.com” because we were losing traffic to it from our existing bplans.com.
3. Get a name you can use. Real-world example: In 1988 I changed the company name of Infoplan to Palo Alto Software. A friend in PR said he’d done a search and there were 26,000 corporations in the U.S. whose name started with “info.” So here are some questions to consider:
   • Is it easy to remember? To say? To spell? Think of the names that work for you, in your life–your favorite restaurants, stores, services. What works for you? Why? I’ve never been able to say Iraila, a local restaurant (named after the owner’s mother), and–coincidence or not–I don’t go there.
   • Is it confusing? Does it sound like something else?
   • Is it cute, or possibly too cute? Cute names can work well or poorly, depending on the business and the target. Rhymes, puns and so on can be great or grating. I like Rhythm and Blooms, a local flower store. I don’t like FCUK, a clothing chain in the UK.

If you follow these first three tips, don’t sweat the rest too much. A bad name can really hurt, but the difference between an acceptable name and a really good name is a lot less than you think. What really matters is the meaning you attach to the name through years of doing business well. I think this is the right focus, on the company name first, when you’re starting up.

Start-up names and domain names

It’s hard enough to set a name for your start-up. But it’s much harder when you sweat the domain name too much and let it clog the creative process.

Thank goodness, when we renamed Infoplan Inc. to Palo Alto Software, Inc. back in 1988, we didn’t think about the domain name issue. Instead, as we decided that Infoplan was too hard to market and we discovered that Palo Alto Software was not in use as a corporate name in California, so that’s what we named it. It said Silicon Valley, it said Stanford University, and we lived in Palo Alto and had offices in Palo Alto.

It took us until late in 1994 to catch on with the Internet. When we did, paloalto.com wasn’t available (we bought it years later, so it’s ours now) but we made do with pasware.com, bplans.com, bizplans.com, and a few others. I’m very glad I also registered timberry.com at that time too; and some of my kids were glad I registered their names, too.

This comes up because I watch more start-ups these days, and I see them sweating over making the company name and the domain name both work, both be exclusive and also be coordinated. That’s really tough. And then there are product names and service names, too, which makes it even harder.

Factors that make a domain name work are ownership, of course, and a different kind of ease of use (is it easy to type and hard to misspell, for example), and a different kind of marketability (easy to remember, easy to defend).

I’ve been in some naming sessions in which we forgot some of the basics. Amazon.com isn’t books.com, and Yahoo! and Google meant next to nothing when they started. But they were short, easy to remember (well, sort of–I had trouble with Google for about half a minute) and, essentially, easy to market.

Try these three sites for more insight on company naming.

• The Name Inspector’s article What’s my name?
• Word Lab Tools
• Guy Kawasaki’s blog post The Name Game

If you’re thinking about starting your own business, any type of business, one fundamental will be expenses that you will need to cover before you open your doors, launch your website, or sell your first product or service. The timing of starting expenses is what distinguishes them from ongoing expenses that you track each month in the course of doing business.

As part of your estimates for starting costs, you will also want to plan for a cash reserve to cover the actual costs of doing business during the first few months, until your sales are sufficient to cover your operating costs.

Types of Starting Costs

Expenses
How do you know what your starting expenses will be? This will vary depending on the type of business. If you’re planning to have a website, you may incur site development costs ahead of opening the business. If you’re planning to have a traditional storefront, there may be initial lease costs or deposits that must be paid for up front. Common starting costs would be:

• Legal
• Stationery/business cards
• Product or service description brochures
• Lease deposit
• Consulting
• Insurance
• Expensed computer equipment **

**In the United States a computer purchase can be treated either as an asset or as an expense, depending on conditions set forth in federal tax law. When you can choose, you normally want to expense your purchases because then you can deduct those expenses from income.

Cash Reserve
In addition to the expenses that must be paid before your business is up and running, you also want to estimate the amount of cash you need to have in your account to support the company during the early months, before sales reach a break-even point.

Starting Assets
Starting assets might be inventory, vehicles, buildings and equipment that can be depreciated over time.

Starting Costs Example

Here’s an example of a listing of starting expenses, cash reserve and assets:

The Total Requirements shows how much money is needed to cover starting costs.

How to use the Starting Costs Calculator

The Bplans Starting Costs Calculator lets you estimate total starting expenses, cash reserves and assets to be purchased. It then automatically calculates your Total Requirements.

Startup Expenses

• Click on the Edit button for Initial Expenses; this displays a listing of sample expenses
  • Double click within each expense cell and type in the expense amount (use whole numbers, without punctuation)
• Click on the Done button to transfer the combined total for Initial Expenses

Money in the bank as reserve for losses:

• Click on the Edit button for Money in the bank; this displays a listing of expenses that you will incur in the first few months you are in business
  • Double click within each expense cell and type in the estimate amount (use whole numbers, without punctuation)
• To adjust the number of months for your reserve, click and drag the circle on the sliding bar to adjust up or down between 1 and 12 months. Your total reserve will adjust depending on how many months you select.

Start-up Inventory, Other current assets, Long-term or fixed assets:

• Double click on each cell and enter your estimated total (there is no additional breakdown of assets)

The Calculator will determine your Total Start-up Requirements. Repeat the procedures above to adjust any of your estimated expenses.