If you have every wondered what the difference would be between Startup costs and purchasing an existing business... here is a great tool from the Wall Street Journal online (WSJ.com).
Startup expenses are one-time expenses that occur before you can open your doors for business and start selling your product or service. Expenses are money you pay for services, like legal expenses, or design services, or rent - intangible things that you don't get to keep. Expenses reduce your taxable income, but cannot be depreciated over time. After startup, expenses are accounted for in our profit & loss table.
To learn more... and calculate your possible startup costs... click here.
Showing posts with label starting a business. Show all posts
Showing posts with label starting a business. Show all posts
Friday, June 24, 2011
Sunday, October 24, 2010
Is This a Good Thing????
Small Business Administration redefines 'Small Business'
New size standards will now classify more than 18,000 additional businesses as "small business," making them eligible for SBA programs
By Lauren Drell
AOL Small Business
October 11, 2010
Small businesses are getting a little bigger, thanks to new size standards form the Small Business Administration. Effective November 5, 2010, the change will make nearly 18,000 more businesses across 70 industries, including retail and hospitality, eligible for SBA programs, including loans and help winning federal contracts.
SBA size standards vary by industry, and caps are typically set based on the number of employees or average annual receipts -- criteria that have been in place since 1984. This recent "comprehensive review" of size standards will at least double the cap on average annual receipts, taking them from $7 million to as much as $35.5 million.
The change is said to benefit car dealers most of all, as they represent nearly one-third of the 18,000 deemed "small businesses." Whereas the cap for car dealers used to be revenue based, the new rule hinges on the number of employees: 200 is the limit. About 90 percent of all car dealerships will now be considered small businesses, some with revenues up to $20 million, according to a report by The New York Times' You're the Boss blog.
"These increases in the size standards mean more of America's small businesses will be eligible for and can access the resources and services the SBA and other federal agencies have available," SBA Administrator Karen Mills said in a statement. The new size guidelines are aligned with current economic and industry indicators and are meant to ensure that small businesses have the tools they need to grow and create jobs, since small businesses have created 65 percent of all the new jobs in the past 17 years and employ half of America's private-sector workforce.
New size standards will now classify more than 18,000 additional businesses as "small business," making them eligible for SBA programs
By Lauren Drell
AOL Small Business
October 11, 2010
Small businesses are getting a little bigger, thanks to new size standards form the Small Business Administration. Effective November 5, 2010, the change will make nearly 18,000 more businesses across 70 industries, including retail and hospitality, eligible for SBA programs, including loans and help winning federal contracts.
SBA size standards vary by industry, and caps are typically set based on the number of employees or average annual receipts -- criteria that have been in place since 1984. This recent "comprehensive review" of size standards will at least double the cap on average annual receipts, taking them from $7 million to as much as $35.5 million.
The change is said to benefit car dealers most of all, as they represent nearly one-third of the 18,000 deemed "small businesses." Whereas the cap for car dealers used to be revenue based, the new rule hinges on the number of employees: 200 is the limit. About 90 percent of all car dealerships will now be considered small businesses, some with revenues up to $20 million, according to a report by The New York Times' You're the Boss blog.
"These increases in the size standards mean more of America's small businesses will be eligible for and can access the resources and services the SBA and other federal agencies have available," SBA Administrator Karen Mills said in a statement. The new size guidelines are aligned with current economic and industry indicators and are meant to ensure that small businesses have the tools they need to grow and create jobs, since small businesses have created 65 percent of all the new jobs in the past 17 years and employ half of America's private-sector workforce.
Thursday, April 1, 2010
Starting a Business with Limited Time and Money
By STEVE STRAUSS, AOL SMALL BUSINESS
Q: I would like to start my own business, but my problem is that I don't have a lot of money. I also have a job which I cannot quit. How do I start a business that way?
A: It is actually good that you have a job, since that makes starting a business on a shoestring much more viable: You keep the job while starting the new venture and work on it in the evenings and weekends. It will help pay the bills as you get started.While it would be nice to have a surplus of money to start your business, it is equally true that most small businesses are begun with less than optimal funding ... maybe not shoestring funding, but it can be done.
The most important thing is to pick the sort of business that can be launched inexpensively. Here are your best bets:
1. an online business
2. a service Business
3. a home-based business
4. a part-time business
to read more… click here.
Q: I would like to start my own business, but my problem is that I don't have a lot of money. I also have a job which I cannot quit. How do I start a business that way?
A: It is actually good that you have a job, since that makes starting a business on a shoestring much more viable: You keep the job while starting the new venture and work on it in the evenings and weekends. It will help pay the bills as you get started.While it would be nice to have a surplus of money to start your business, it is equally true that most small businesses are begun with less than optimal funding ... maybe not shoestring funding, but it can be done.
The most important thing is to pick the sort of business that can be launched inexpensively. Here are your best bets:
1. an online business
2. a service Business
3. a home-based business
4. a part-time business
to read more… click here.
Thursday, October 8, 2009
How to Calculate Start-Up Costs
The Wall Street Journal - wsj.com
OCTOBER 5, 2009, 10:10 A.M. ET
How to Calculate Start-Up Costs
By COLLEEN DEBAISE
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Got a pen handy? To best estimate your start-up costs, you'll need to make a list— and the more detailed the better. A smart way to start is to brainstorm everything you'll need, from tangible goods (such as inventory, equipment and fixtures) to professional services (such as remodeling, advertising and legal work). Then, start calculating how much you'll need to pay for all those goods and services.
Some of the expenses incurred during the start-up phase will be one-time costs, such as the fee for printing up your brochures, creating your LLC or acquiring a permit, while others will be ongoing, such as rent, insurance or employees' salaries. In general, it's best to use a two-step process. First, come up with an estimate of one-time costs needed to get your doors open, and then develop an operating budget for the first six months or even the first year of the business. Check out the Better Business Bureau's sample worksheet here.
The categories listed below will aid you in completing your list of costs for opening and operating a small business:
Location. Think about how much you'll need to pay for rent, to make improvements to the space or for full-scale renovations.
Inventory. Figure out the cost of raw materials, plus any production costs, or the wholesale prices of products you'll be selling. Calculate shipping and packaging costs, sales commissions and other costs related to the sale of your product.
Equipment. Add up how much it costs to buy or lease computers, copiers, telephones, heavy-duty machinery or other fixtures.
Employees. Calculate salaries and wages, plus benefits you would offer, and don't forget payroll-related taxes, overtime pay and workers' compensation.
Marketing. Figure out how much you'll pay for new stationery, marketing materials, advertising campaigns, the sign above your door and meals or entertainment with clients.
Administrative and operational costs. Keep track of how much you'll need to pay for insurance (to protect against property damage, business interruption and floods) and office supplies. Don't forget utilities, a commonly overlooked expense, and other charges, such as phone and Internet service, cleaning and property maintenance.
Professional fees and permits. Add up how much you'll pay for your attorney, accountant or other advisor or consultant. Factor in what you'll need to pay for permits or licenses related to your business.
If you're still having trouble figuring out how much money you need, do research on other companies in your industry and region of the country. Talk to other business owners about how they figured out start-up costs— and ask specifically about expenses they forgot. The SBA offers free counseling through its Small Business Development Centers and its affiliate, SCORE. You can also seek advice from an accountant or attorney accustomed to dealing with small businesses.
When in doubt about your projections, you should always err on the side of overestimating your up-front investment cost and underestimating sales. Eric van Merkensteijn, a University of Pennsylvania business professor who left academia in the late 1990s to open a restaurant in Philadelphia, offers this advice: Figure out your start-up costs, then double that number. Then double it again. Only then will you have a realistic number, says the professor, who closed the business in 2004 and returned to campus.
OCTOBER 5, 2009, 10:10 A.M. ET
How to Calculate Start-Up Costs
By COLLEEN DEBAISE
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Got a pen handy? To best estimate your start-up costs, you'll need to make a list— and the more detailed the better. A smart way to start is to brainstorm everything you'll need, from tangible goods (such as inventory, equipment and fixtures) to professional services (such as remodeling, advertising and legal work). Then, start calculating how much you'll need to pay for all those goods and services.
Some of the expenses incurred during the start-up phase will be one-time costs, such as the fee for printing up your brochures, creating your LLC or acquiring a permit, while others will be ongoing, such as rent, insurance or employees' salaries. In general, it's best to use a two-step process. First, come up with an estimate of one-time costs needed to get your doors open, and then develop an operating budget for the first six months or even the first year of the business. Check out the Better Business Bureau's sample worksheet here.
The categories listed below will aid you in completing your list of costs for opening and operating a small business:
Location. Think about how much you'll need to pay for rent, to make improvements to the space or for full-scale renovations.
Inventory. Figure out the cost of raw materials, plus any production costs, or the wholesale prices of products you'll be selling. Calculate shipping and packaging costs, sales commissions and other costs related to the sale of your product.
Equipment. Add up how much it costs to buy or lease computers, copiers, telephones, heavy-duty machinery or other fixtures.
Employees. Calculate salaries and wages, plus benefits you would offer, and don't forget payroll-related taxes, overtime pay and workers' compensation.
Marketing. Figure out how much you'll pay for new stationery, marketing materials, advertising campaigns, the sign above your door and meals or entertainment with clients.
Administrative and operational costs. Keep track of how much you'll need to pay for insurance (to protect against property damage, business interruption and floods) and office supplies. Don't forget utilities, a commonly overlooked expense, and other charges, such as phone and Internet service, cleaning and property maintenance.
Professional fees and permits. Add up how much you'll pay for your attorney, accountant or other advisor or consultant. Factor in what you'll need to pay for permits or licenses related to your business.
If you're still having trouble figuring out how much money you need, do research on other companies in your industry and region of the country. Talk to other business owners about how they figured out start-up costs— and ask specifically about expenses they forgot. The SBA offers free counseling through its Small Business Development Centers and its affiliate, SCORE. You can also seek advice from an accountant or attorney accustomed to dealing with small businesses.
When in doubt about your projections, you should always err on the side of overestimating your up-front investment cost and underestimating sales. Eric van Merkensteijn, a University of Pennsylvania business professor who left academia in the late 1990s to open a restaurant in Philadelphia, offers this advice: Figure out your start-up costs, then double that number. Then double it again. Only then will you have a realistic number, says the professor, who closed the business in 2004 and returned to campus.
Tuesday, September 22, 2009
How to Decide if Entrepreneurship is Right for You
How to Decide if Entrepreneurship is Right for You
By COLLEEN DEBAISE
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Starting a business is a lot like becoming a parent. Not only do you have to prepare for your start-up emotionally and financially, but you have to be committed to its constant needs until it's mature enough to hum along on its own. And even then (much like a child) it will always need you in some capacity, no matter how old it gets.
Here are five questions to ask before you start your own business:
1. Am I passionate about my product or service? Let's face it: the start-up phase is stressful. You will find yourself questioning whether you've made the right decision, especially when the hours are long and the initial profits (if any) are lean. As the business owner, you're also chief salesperson for your company. Your enthusiasm for your product or service— whether it's hand-knit sweaters or top-notch tax preparation— is often the difference that hooks customers, lands deals and attracts investors. It's unwise to start down the path of entrepreneurship unless you've got a zeal that will get you through rough patches and keep you interested long after the initial enthusiasm has faded.
2. What is my tolerance for risk? Whether it's quitting your day job or signing a lease on a new space, nothing about starting a business is for the faint of heart. Just ask Ina Garten, who bought a specialty-foods store called The Barefoot Contessa in East Hampton, New York, in 1978 and has since branched out into cookbooks, television and a line of products. Garten tells aspiring entrepreneurs that you have to "be willing to jump off the cliff and figure out how to fly on the way down." Even with enough passion to launch a thousand ventures, you could find any number of circumstances hastening your failure: a location that turns out to be less than ideal, a problem with city or state zoning boards or a kink in the supply chain that can't easily be ironed out. There's no guarantee of success, or even a steady paycheck. If you're risk-averse, entrepreneurship probably isn't the right path for you.
3. Am I good at making decisions? No one else is going to make them for you when you own your own business. Consider how you might handle these early decisions: Do I work from home or do I lease office space? Do I hire employees? Do I pursue high-end clients or sell to the masses? Do I incorporate? Do I advertise? Do I borrow money from friends or family? Do I use my entire savings? Keep in mind that the decision-making process only gets more complicated as time goes on, once you have employees or clients depending on you. The choices you make can lead to success or downfall, so you must feel confident in your ability to make the right call.
4. Am I willing to take on numerous responsibilities? While a corporate employee focuses on a special skill or role within the larger corporation, a business owner must contribute everything to the business. Solo entrepreneurs in particular must be versatile and play a number of roles, from chief salesperson and bookkeeper to head marketer and bill collector. If juggling many roles doesn't suit you, entrepreneurship probably won't, either. The recent economic downturn has made it more important than ever for business owners to have a good working knowledge of their companies' finances. While you will undoubtedly learn much on this topic from getting your hands dirty, the more knowledge you have in advance, the better prepared you'll be.
5. Will I be able to avoid burnout? Working seven days a week, losing touch with friends, abandoning old hobbies and interests and not making time for loved ones can quickly lead to burnout in the midst of starting up— and ultimately to business failure. That's what happened to James Zimbardi, an entrepreneur in Orlando, Florida, who says he didn't know any better when he started his first company in 1997 and worked as hard as possible, for as long as possible, until his creativity, enthusiasm and energy were sapped. By 2002, he was a broken man— the business took a downturn, and so did his personal life. Now Zimbardi is at work on his second company, Allgen Financial Services, and sticking to better habits to maintain work/life balance, such as not working on Sundays, making time for hobbies such as sailing and salsa dancing, and building close ties with other business owners through a faith-based support network.
Take some time to mull over these questions, do some soul-searching, and then if you think you have what it takes, go for it.
By COLLEEN DEBAISE
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Starting a business is a lot like becoming a parent. Not only do you have to prepare for your start-up emotionally and financially, but you have to be committed to its constant needs until it's mature enough to hum along on its own. And even then (much like a child) it will always need you in some capacity, no matter how old it gets.
Here are five questions to ask before you start your own business:
1. Am I passionate about my product or service? Let's face it: the start-up phase is stressful. You will find yourself questioning whether you've made the right decision, especially when the hours are long and the initial profits (if any) are lean. As the business owner, you're also chief salesperson for your company. Your enthusiasm for your product or service— whether it's hand-knit sweaters or top-notch tax preparation— is often the difference that hooks customers, lands deals and attracts investors. It's unwise to start down the path of entrepreneurship unless you've got a zeal that will get you through rough patches and keep you interested long after the initial enthusiasm has faded.
2. What is my tolerance for risk? Whether it's quitting your day job or signing a lease on a new space, nothing about starting a business is for the faint of heart. Just ask Ina Garten, who bought a specialty-foods store called The Barefoot Contessa in East Hampton, New York, in 1978 and has since branched out into cookbooks, television and a line of products. Garten tells aspiring entrepreneurs that you have to "be willing to jump off the cliff and figure out how to fly on the way down." Even with enough passion to launch a thousand ventures, you could find any number of circumstances hastening your failure: a location that turns out to be less than ideal, a problem with city or state zoning boards or a kink in the supply chain that can't easily be ironed out. There's no guarantee of success, or even a steady paycheck. If you're risk-averse, entrepreneurship probably isn't the right path for you.
3. Am I good at making decisions? No one else is going to make them for you when you own your own business. Consider how you might handle these early decisions: Do I work from home or do I lease office space? Do I hire employees? Do I pursue high-end clients or sell to the masses? Do I incorporate? Do I advertise? Do I borrow money from friends or family? Do I use my entire savings? Keep in mind that the decision-making process only gets more complicated as time goes on, once you have employees or clients depending on you. The choices you make can lead to success or downfall, so you must feel confident in your ability to make the right call.
4. Am I willing to take on numerous responsibilities? While a corporate employee focuses on a special skill or role within the larger corporation, a business owner must contribute everything to the business. Solo entrepreneurs in particular must be versatile and play a number of roles, from chief salesperson and bookkeeper to head marketer and bill collector. If juggling many roles doesn't suit you, entrepreneurship probably won't, either. The recent economic downturn has made it more important than ever for business owners to have a good working knowledge of their companies' finances. While you will undoubtedly learn much on this topic from getting your hands dirty, the more knowledge you have in advance, the better prepared you'll be.
5. Will I be able to avoid burnout? Working seven days a week, losing touch with friends, abandoning old hobbies and interests and not making time for loved ones can quickly lead to burnout in the midst of starting up— and ultimately to business failure. That's what happened to James Zimbardi, an entrepreneur in Orlando, Florida, who says he didn't know any better when he started his first company in 1997 and worked as hard as possible, for as long as possible, until his creativity, enthusiasm and energy were sapped. By 2002, he was a broken man— the business took a downturn, and so did his personal life. Now Zimbardi is at work on his second company, Allgen Financial Services, and sticking to better habits to maintain work/life balance, such as not working on Sundays, making time for hobbies such as sailing and salsa dancing, and building close ties with other business owners through a faith-based support network.
Take some time to mull over these questions, do some soul-searching, and then if you think you have what it takes, go for it.
How to Decide if Entrepreneurship is Right for You
By COLLEEN DEBAISE
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Starting a business is a lot like becoming a parent. Not only do you have to prepare for your start-up emotionally and financially, but you have to be committed to its constant needs until it's mature enough to hum along on its own. And even then (much like a child) it will always need you in some capacity, no matter how old it gets.
Here are five questions to ask before you start your own business:
1. Am I passionate about my product or service? Let's face it: the start-up phase is stressful. You will find yourself questioning whether you've made the right decision, especially when the hours are long and the initial profits (if any) are lean. As the business owner, you're also chief salesperson for your company. Your enthusiasm for your product or service— whether it's hand-knit sweaters or top-notch tax preparation— is often the difference that hooks customers, lands deals and attracts investors. It's unwise to start down the path of entrepreneurship unless you've got a zeal that will get you through rough patches and keep you interested long after the initial enthusiasm has faded.
2. What is my tolerance for risk? Whether it's quitting your day job or signing a lease on a new space, nothing about starting a business is for the faint of heart. Just ask Ina Garten, who bought a specialty-foods store called The Barefoot Contessa in East Hampton, New York, in 1978 and has since branched out into cookbooks, television and a line of products. Garten tells aspiring entrepreneurs that you have to "be willing to jump off the cliff and figure out how to fly on the way down." Even with enough passion to launch a thousand ventures, you could find any number of circumstances hastening your failure: a location that turns out to be less than ideal, a problem with city or state zoning boards or a kink in the supply chain that can't easily be ironed out. There's no guarantee of success, or even a steady paycheck. If you're risk-averse, entrepreneurship probably isn't the right path for you.
3. Am I good at making decisions? No one else is going to make them for you when you own your own business. Consider how you might handle these early decisions: Do I work from home or do I lease office space? Do I hire employees? Do I pursue high-end clients or sell to the masses? Do I incorporate? Do I advertise? Do I borrow money from friends or family? Do I use my entire savings? Keep in mind that the decision-making process only gets more complicated as time goes on, once you have employees or clients depending on you. The choices you make can lead to success or downfall, so you must feel confident in your ability to make the right call.
4. Am I willing to take on numerous responsibilities? While a corporate employee focuses on a special skill or role within the larger corporation, a business owner must contribute everything to the business. Solo entrepreneurs in particular must be versatile and play a number of roles, from chief salesperson and bookkeeper to head marketer and bill collector. If juggling many roles doesn't suit you, entrepreneurship probably won't, either. The recent economic downturn has made it more important than ever for business owners to have a good working knowledge of their companies' finances. While you will undoubtedly learn much on this topic from getting your hands dirty, the more knowledge you have in advance, the better prepared you'll be.
5. Will I be able to avoid burnout? Working seven days a week, losing touch with friends, abandoning old hobbies and interests and not making time for loved ones can quickly lead to burnout in the midst of starting up— and ultimately to business failure. That's what happened to James Zimbardi, an entrepreneur in Orlando, Florida, who says he didn't know any better when he started his first company in 1997 and worked as hard as possible, for as long as possible, until his creativity, enthusiasm and energy were sapped. By 2002, he was a broken man— the business took a downturn, and so did his personal life. Now Zimbardi is at work on his second company, Allgen Financial Services, and sticking to better habits to maintain work/life balance, such as not working on Sundays, making time for hobbies such as sailing and salsa dancing, and building close ties with other business owners through a faith-based support network.
Take some time to mull over these questions, do some soul-searching, and then if you think you have what it takes, go for it.
Adapted from the upcoming book THE WALL STREET JOURNAL COMPLETE SMALL BUSINESS GUIDEBOOK (Three Rivers Press, Dec. 29, 2009).
Starting a business is a lot like becoming a parent. Not only do you have to prepare for your start-up emotionally and financially, but you have to be committed to its constant needs until it's mature enough to hum along on its own. And even then (much like a child) it will always need you in some capacity, no matter how old it gets.
Here are five questions to ask before you start your own business:
1. Am I passionate about my product or service? Let's face it: the start-up phase is stressful. You will find yourself questioning whether you've made the right decision, especially when the hours are long and the initial profits (if any) are lean. As the business owner, you're also chief salesperson for your company. Your enthusiasm for your product or service— whether it's hand-knit sweaters or top-notch tax preparation— is often the difference that hooks customers, lands deals and attracts investors. It's unwise to start down the path of entrepreneurship unless you've got a zeal that will get you through rough patches and keep you interested long after the initial enthusiasm has faded.
2. What is my tolerance for risk? Whether it's quitting your day job or signing a lease on a new space, nothing about starting a business is for the faint of heart. Just ask Ina Garten, who bought a specialty-foods store called The Barefoot Contessa in East Hampton, New York, in 1978 and has since branched out into cookbooks, television and a line of products. Garten tells aspiring entrepreneurs that you have to "be willing to jump off the cliff and figure out how to fly on the way down." Even with enough passion to launch a thousand ventures, you could find any number of circumstances hastening your failure: a location that turns out to be less than ideal, a problem with city or state zoning boards or a kink in the supply chain that can't easily be ironed out. There's no guarantee of success, or even a steady paycheck. If you're risk-averse, entrepreneurship probably isn't the right path for you.
3. Am I good at making decisions? No one else is going to make them for you when you own your own business. Consider how you might handle these early decisions: Do I work from home or do I lease office space? Do I hire employees? Do I pursue high-end clients or sell to the masses? Do I incorporate? Do I advertise? Do I borrow money from friends or family? Do I use my entire savings? Keep in mind that the decision-making process only gets more complicated as time goes on, once you have employees or clients depending on you. The choices you make can lead to success or downfall, so you must feel confident in your ability to make the right call.
4. Am I willing to take on numerous responsibilities? While a corporate employee focuses on a special skill or role within the larger corporation, a business owner must contribute everything to the business. Solo entrepreneurs in particular must be versatile and play a number of roles, from chief salesperson and bookkeeper to head marketer and bill collector. If juggling many roles doesn't suit you, entrepreneurship probably won't, either. The recent economic downturn has made it more important than ever for business owners to have a good working knowledge of their companies' finances. While you will undoubtedly learn much on this topic from getting your hands dirty, the more knowledge you have in advance, the better prepared you'll be.
5. Will I be able to avoid burnout? Working seven days a week, losing touch with friends, abandoning old hobbies and interests and not making time for loved ones can quickly lead to burnout in the midst of starting up— and ultimately to business failure. That's what happened to James Zimbardi, an entrepreneur in Orlando, Florida, who says he didn't know any better when he started his first company in 1997 and worked as hard as possible, for as long as possible, until his creativity, enthusiasm and energy were sapped. By 2002, he was a broken man— the business took a downturn, and so did his personal life. Now Zimbardi is at work on his second company, Allgen Financial Services, and sticking to better habits to maintain work/life balance, such as not working on Sundays, making time for hobbies such as sailing and salsa dancing, and building close ties with other business owners through a faith-based support network.
Take some time to mull over these questions, do some soul-searching, and then if you think you have what it takes, go for it.
Thursday, September 17, 2009
How to Start an Adventure Travel Company
How to Start an Adventure Travel Company
Check every hotel personally, says Brian Morgan of Adventure Life. Same goes for the zip lines.
By Leigh Buchanan Jul 1, 2009
Company Dashboard: Adventure Life
Founder Brian Morgan, 35
Location Missoula, Montana
2008 Revenue $11 million
Employees 16
Start-up Year 1998
Start-up Costs $3,000 for two brochures and a laptop
Breakeven One year out on sales of $125,000
Biggest Expenses $11,500 on advertising in 1999 and $33,500 in 2000. The biggest bite was print ads in magazines such as Outside and National Geographic Adventure.
Qualifications Fluency in Spanish. Relationships with trusted locals and longtime expats on the ground
Red Tape Regulatory burdens fall on lodges and providers of transportation and other services in countries visited, rather than on the tour operator.
In 1998, Brian Morgan traveled to Ecuador to learn Spanish and because someone he met in college once told him it was beautiful. There he trekked in the shadow of a volcano and rafted through the rain forest to a soundtrack of monkey chatter and birdsong. It would have been easy to put down roots in South America: Morgan envisioned building a life there as a consultant. But heart and home were in his native Montana. So, after some last-hurrah backpacking around Bolivia and Peru, Morgan flew back to Missoula. He hoped to land a job that would support regular visits south of the equator.
Then Morgan had an idea. "I thought I could put a group of people together a few times a year and take them to Ecuador -- show them the things that I found most spectacular," he says. His nascent business, Adventure Life, would lead travelers off the beaten path toward encounters with the land and culture. On some nights, clients would luxuriate in hot baths at a charming hotel. On others, they would rough it in a villager's plumbing-less home.
Morgan had just a couple thousand dollars in savings, though, so he accepted a software job and relegated start-up work to evenings and weekends. He printed 200 brochures advertising a single excursion and deposited them in coffee shops and sporting-goods stores near universities. No one called. Travel agencies waved him away. Concluding that travelers wanted more than one option, Morgan created a second brochure offering three itineraries with six departure dates. He also built a website, which looked like the work of an Amazonian howler monkey. Fortunately, a graphic design student redesigned the site a few weeks later. Drawn by the brochure and the site, 100 people booked the first year.
Morgan had expected young backpackers to flock to the tours and assumed rudimentary accommodations and transportation would suffice. In fact, many clients were as old as 65. In addition, Morgan based his fees on data harvested from European company sites, which were plentiful. But because Americans take fewer vacations than Europeans, they are willing to spend more on shorter trips. "I lost money on my first group in Peru," says Morgan. "Once I got there, I was like, 'Oh, my God; we cannot stay at this hotel.' I had to spend an extra $100 per person to upgrade." Morgan began booking rooms in classier hotels and switched from bus travel to car services. That first year, prices rose 25 percent to 30 percent.
Morgan had also assumed he would maintain a staff of expat tour leaders in the countries in which he did business. Those guides would take over in challenging terrain and run tours themselves as the company grew. But on his first tour, Morgan observed that local guides were far better versed in the flora, fauna, and culture than their North American counterparts. Many spoke indigenous tongues as well as Spanish and English. And though local guides charged about twice as much per day as Americans, they were generally willing to sign on per tour rather than be hired as staff. So Morgan began recruiting locals, e-mailing people he had met on his travels for referrals.
Not surprisingly, the first few years required a lot of time in the (steamy verdant) field. Morgan spent a third of 1999 in Ecuador, Costa Rica, and Peru leading tours and inspecting hotels -- sometimes as many as 12 a day -- for cleanliness and character. "You lift the covers and check the sheets and mattresses; check the bathrooms for mold," says Morgan. He also personally auditioned activities offered to clients. "In Costa Rica, I rappelled down all these waterfalls," he says. "When I was done, I turned to my outfitter and said, 'My travelers can never do this.' "
With its founder abroad, Adventure Life needed a presence in the U.S.; at first, that presence was Morgan's mother. After 10 months, he hired an administrative assistant to help create new brochures and assist clients preparing for trips.
Over the years, Adventure Life's business has waxed along with interest in the environment and indigenous cultures. Today, 40 percent of sales derive from customer referrals and coverage in guidebooks and travel magazines.
Morgan warns that running a company like his may wear down even the most wanderlustful entrepreneurs. "I went through major burnout a few years ago and almost left the industry," he says. "I lost all the original things I loved about travel." To keep going, Morgan began mentally framing his trips as opportunities to see old friends and explore places he will never take clients. "It was totally unexpected that sharing my passion with others ended up dampening that passion," he says.
Check every hotel personally, says Brian Morgan of Adventure Life. Same goes for the zip lines.
By Leigh Buchanan Jul 1, 2009
Company Dashboard: Adventure Life
Founder Brian Morgan, 35
Location Missoula, Montana
2008 Revenue $11 million
Employees 16
Start-up Year 1998
Start-up Costs $3,000 for two brochures and a laptop
Breakeven One year out on sales of $125,000
Biggest Expenses $11,500 on advertising in 1999 and $33,500 in 2000. The biggest bite was print ads in magazines such as Outside and National Geographic Adventure.
Qualifications Fluency in Spanish. Relationships with trusted locals and longtime expats on the ground
Red Tape Regulatory burdens fall on lodges and providers of transportation and other services in countries visited, rather than on the tour operator.
In 1998, Brian Morgan traveled to Ecuador to learn Spanish and because someone he met in college once told him it was beautiful. There he trekked in the shadow of a volcano and rafted through the rain forest to a soundtrack of monkey chatter and birdsong. It would have been easy to put down roots in South America: Morgan envisioned building a life there as a consultant. But heart and home were in his native Montana. So, after some last-hurrah backpacking around Bolivia and Peru, Morgan flew back to Missoula. He hoped to land a job that would support regular visits south of the equator.
Then Morgan had an idea. "I thought I could put a group of people together a few times a year and take them to Ecuador -- show them the things that I found most spectacular," he says. His nascent business, Adventure Life, would lead travelers off the beaten path toward encounters with the land and culture. On some nights, clients would luxuriate in hot baths at a charming hotel. On others, they would rough it in a villager's plumbing-less home.
Morgan had just a couple thousand dollars in savings, though, so he accepted a software job and relegated start-up work to evenings and weekends. He printed 200 brochures advertising a single excursion and deposited them in coffee shops and sporting-goods stores near universities. No one called. Travel agencies waved him away. Concluding that travelers wanted more than one option, Morgan created a second brochure offering three itineraries with six departure dates. He also built a website, which looked like the work of an Amazonian howler monkey. Fortunately, a graphic design student redesigned the site a few weeks later. Drawn by the brochure and the site, 100 people booked the first year.
Morgan had expected young backpackers to flock to the tours and assumed rudimentary accommodations and transportation would suffice. In fact, many clients were as old as 65. In addition, Morgan based his fees on data harvested from European company sites, which were plentiful. But because Americans take fewer vacations than Europeans, they are willing to spend more on shorter trips. "I lost money on my first group in Peru," says Morgan. "Once I got there, I was like, 'Oh, my God; we cannot stay at this hotel.' I had to spend an extra $100 per person to upgrade." Morgan began booking rooms in classier hotels and switched from bus travel to car services. That first year, prices rose 25 percent to 30 percent.
Morgan had also assumed he would maintain a staff of expat tour leaders in the countries in which he did business. Those guides would take over in challenging terrain and run tours themselves as the company grew. But on his first tour, Morgan observed that local guides were far better versed in the flora, fauna, and culture than their North American counterparts. Many spoke indigenous tongues as well as Spanish and English. And though local guides charged about twice as much per day as Americans, they were generally willing to sign on per tour rather than be hired as staff. So Morgan began recruiting locals, e-mailing people he had met on his travels for referrals.
Not surprisingly, the first few years required a lot of time in the (steamy verdant) field. Morgan spent a third of 1999 in Ecuador, Costa Rica, and Peru leading tours and inspecting hotels -- sometimes as many as 12 a day -- for cleanliness and character. "You lift the covers and check the sheets and mattresses; check the bathrooms for mold," says Morgan. He also personally auditioned activities offered to clients. "In Costa Rica, I rappelled down all these waterfalls," he says. "When I was done, I turned to my outfitter and said, 'My travelers can never do this.' "
With its founder abroad, Adventure Life needed a presence in the U.S.; at first, that presence was Morgan's mother. After 10 months, he hired an administrative assistant to help create new brochures and assist clients preparing for trips.
Over the years, Adventure Life's business has waxed along with interest in the environment and indigenous cultures. Today, 40 percent of sales derive from customer referrals and coverage in guidebooks and travel magazines.
Morgan warns that running a company like his may wear down even the most wanderlustful entrepreneurs. "I went through major burnout a few years ago and almost left the industry," he says. "I lost all the original things I loved about travel." To keep going, Morgan began mentally framing his trips as opportunities to see old friends and explore places he will never take clients. "It was totally unexpected that sharing my passion with others ended up dampening that passion," he says.
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