How to Get More Converisons by Optimizing Your Checkout Process

Do your conversion rates need a boost?

Nobody has a conversion rate that’s 100%. I think it’s safe to say that no matter how successful your company is, your conversions can always be improved.

Recognizing this is half the battle, but you’ll need to actually implement some changes if you want to see an increase. Just hoping for more conversions isn’t going to cut it.

Here’s another mistake I see businesses make. They confuse a conversion problem with a traffic problem.

Sure, driving more traffic to your website is great. I encourage you to do this. You may get more sales, but it won’t necessarily change your conversion rate.

Ecommerce websites need to focus on their website layouts. I’ve told you before that websites with simple designs have higher conversion rates.

But you’ve also got to simplify your checkout process.

If you analyze each phase of this process, you may find certain elements that are actually driving customers away.

Fortunately, I’ve helped businesses with this problem before. I want to share some of my most successful strategies with you.

Here’s how you need to approach your checkout process to maximize conversions.

Take a look at your shopping cart abandonment rates

Over 69% of shopping carts get abandoned. That number is astonishingly high.

According to Statista, these are the top reasons why consumers abandon carts:

Take a look at these figures and see if your existing checkout process has any of these hindering components. Are you encouraging customers to just browse?

It’s clear based on this data that lots of customers may add something to their shopping carts without any intention of buying anything. I know I’m guilty of this myself as well.

You need to find ways to convert these window shoppers into customers. I recommend trying to tastefully implement scarcity tactics:

• create a sense of urgency
• use FOMO (fear of missing out)
• run promotions with short deadlines
• add popups with promotional offers

These tips will help you reduce abandonment rates and get more conversions.

Shopping cart abandonment is an epidemic that needs to be addressed. You can send your customers an email reminding them they forgot something in their carts as part of fixing the problem.

But looking at your shopping cart abandonment rate is only the first step of optimizing your checkout process.

You should be constantly tracking this number to see whether the changes you’re implementing are making a difference. Keep referring back to it as you go through this guide.

Eliminate unnecessary steps

If your checkout process is long and complicated, it’ll have a negative impact on your conversion rates. Make sure you’re only getting information that’s required to complete the sale.

Consumers are busy. The more steps you make them go through to buy something, the more time they have to realize they really don’t want it.

But if you can simplify your checkout procedure down to a few steps, the customer won’t have time to second-guess their decision.

That’s why the number of form fields should be as low as possible.

As you can see from the graph above, the fewer form fields, the higher checkout performance and usability. As a result, your checkout process will have better conversion rates.

But look at how quickly those numbers drop when the form fields become too long. Those yield a poor UX performance, which can negatively impact conversions.

Ask yourself this question:

What information do I really need to complete this sale?

• customer’s name
• shipping address
• email address (to send confirmation)
• billing information

That’s really it. You don’t need to find out their favorite hobby or their mother’s maiden name.

Just stick with the bare minimum, and you’ll see your conversion rates rise.

Encourage customer profiles, but don’t force it

Some ecommerce websites force customers to create profiles before they can buy something. While I can see the reasoning behind this strategy, it’s killing your conversions.

Look, I get it. From a marketing perspective, you want as much information about your customers as possible.

Once they create an account, you’ll have their name, location, and email address to which you can send more promotional info.

That’s all great. But if you had to choose, wouldn’t you rather have their money?

Not everyone wants a customer profile.

Over 48% of online retailers said a guest checkout was the most important factor to increasing shopping cart conversion rates on their websites.

This was the second highest response on the list, trailing only behind free shipping.

Profile creation piggybacks on our last point as well. You want the process to be as quick and simple as possible. Going through a long process will turn customers away.

But you can encourage your customers to create a profile in other, subtle, ways. For example, your “create a profile” CTA button can be larger and more prominent than the “checkout as a guest” button.

Or you can send the customer an email after they complete the checkout process encouraging them to create a profile.

This message can be part of your actionable drip campaign, notifying customers of:

• their order confirmation
• their order getting shipped
• their order being delivered.

You could add a promotion to one of these emails offering a discount off their next purchase if they create a profile.

Just don’t make it a requirement to buy something.

Focus on your top benefits

Besides the product, what else does the customer get when they buy something from your website? There are certain things you can do to add the perceived value of the purchase.

Here’s what I mean.

As I’ve mentioned, not everyone comes to your website with the intention of buying something. But while they are browsing, something might catch their attention.

They may want to buy it, but they want to make sure they aren’t stuck with it if they change their mind later. That’s why you should clearly state your return policy.

Take a look at this example from Lululemon:

When you’re browsing on their website, you can clearly see at all times they offer free shipping and free returns. Their customers know they can get the item delivered free and send it back without any problems.

Obviously, you don’t want items to be returned. Don’t worry, they probably won’t be. In fact, according to the National Retail Federation, about 8% of all purchases get returned.

But just giving your customers the peace of mind can be enough to drive the sale.

In addition to your shipping and return policies, make sure you highlight any other features your company offers. Some things to consider:

• warranty information
• secure checkout
• social proof of the product
• any differentiating features.

One of these elements can turn a “window shopper” into a paying customer.

Learn how to use images

Believe it or not, pictures can help improve your conversion rates. Instead of just listing your products, show the customer what they’re buying.

While you may have an image or two of your products on your ecommerce shopping page, make sure that image shows up in the shopping cart.

Why?

This can help remind the consumer what they’re buying and reinforce their decision. Plus, it’s much more appealing than just reading some text on a page.

Here’s an example from the REI website:

The consumer gets reminded of exactly what they added to their cart. This could also help avoid any confusion or mix-ups down the road if they selected the wrong color, size, etc.

When they see a visual confirmation of the product they want, psychologically they’ll feel more comfortable about completing the purchase.

Faces also help improve your conversion rates.

According to a recent case study, conversions jumped from 3.7% to 5.5% when an animated picture of a phone was replaced with the face of a customer service representative.

Include images of people on your website. They could be wearing your product, using your product, or be beside your product.

Check out this example from the Macy’s homepage:

Notice it shows a person, and that person is looking at the promotional information and the CTA button.

We’ve already established consumers are drawn to faces. In this case, you’d look at the model’s face and then follow his gaze directly toward the text.

This is a great method for increasing conversions.

Simplify the overall design of your website

In addition to simplifying your checkout process, you should also try to clean up your entire website.

If your products are displayed in a cluttered manner, the consumers will feel overwhelmed. They won’t be able to find what they’re looking for, and your conversion rates will suffer.

While you may have hundreds or potentially even thousands of items for sale on your website, you don’t need to cram all of them on to one page.

Less is more.

Let’s look at an example so you can see what I’m talking about. Here is the homepage for Thule:

There are only five different places the consumer can click to start navigating through products. On the top header, they can select:

• racks & carriers
• active with kids
• luggage & bags

They’ve also got some options within the main body of the page for:

• bike racks
• strollers

That’s it.

Now, as you continue to scroll, you’ll see more options that follow the same format as these two pictures above. But at no time do you ever see more than two pictures and two CTA buttons on the screen at once.

This simple design makes it easy for shoppers to find exactly what they’re looking for.

Give your customers lots of payment options

Some payment options may be more beneficial to your company than others. I completely understand this.

One credit card company may charge higher transaction fees than others, but that doesn’t mean you shouldn’t accept that method of payment.

Recognize your customers have preferences. Certain payment options may give them better reward points or bonus miles over others.

If they want something but can’t buy it with their favorite card, they’ll just buy it from a different retailer instead.

You should accept newer and unconventional types of payment as well. In addition to accepting all major credit cards and debit cards, consider using:

• PayPal
• Venmo
• Apple Pay

I want to show you an example of this. Here’s a screenshot from the Nike website:

If you look at the bottom right corner of the screenshot above, you’ll see they allow their customers to check out using PayPal.

This could appeal to people who have a high PayPal balance and who want to use it for purchases. Accepting PayPal can also help eliminate concerns from customers who may be worried about their credit card information getting stolen.

The reason why I used this example from Nike is because it also highlights another concept I mentioned earlier.

Although they encourage customers to create a profile, they allow them to continue the checkout as guests. Even under the guest checkout area, it shows all the benefits of becoming a member.

To join, all you need to do is check off a box and proceed.

Another quick point about your payment methods. I recommend asking for payment as the last step of the checkout procedure.

By now, the customer has already invested some time into providing other information, so they’ll be more likely to continue. Asking for their payment first could drive them away.

Don’t forget about mobile shoppers

Retailers always need to keep mobile shoppers in mind.

In 2017, 34.5% of ecommerce sales came from mobile devices. That number is projected to reach 54% by 2021.

Your checkout process needs to be optimized for mobile devices. Make sure your site is mobile friendly.

You could even consider creating a mobile app for a checkout process to minimize friction even further.

Touch of Modern is a great example of a successful retail mobile application:

You can learn a lot about getting high conversions from their business model.

They get between 150,000 and 200,000 new downloads every month. More than half of their customers are repeat shoppers. Nearly two-thirds of their total sales come from their mobile application.

Those numbers are incredible.

The reason why this app is so successful is because they use daily flash sales and store all their customers’ data on the app, making the checkout process lightning fast.

Customers don’t have to re-input all of their credit card information and shipping addresses every time they want to buy something.

The reduced friction results in high conversions.

Conclusion

Getting higher conversions isn’t that difficult. It just takes some effort.

As you can see from everything I talked about in this article, these methods aren’t really too extreme. They are also fairly easy to implement.

First, analyze your shopping cart abandonment rates.

Next, eliminate any unnecessary steps in your checkout process. Stick to the basics and only ask for information required for a sale.

Encourage shoppers to create a customer profile, but don’t force them to.

Highlight your top benefits. Use images throughout the checkout process to confirm what the customer is buying.

Make sure you offer many different payment options as well.

Don’t forget about mobile customers. Your website needs to be optimized for mobile devices. You may even consider creating a mobile app for your ecommerce store.

If you follow these tips to simplify your checkout process, you’ll get significantly higher conversion rates.

What changes do you need to make to your checkout process to reduce abandonment rates and get more conversions?

Source Quick Sprout http://ift.tt/2swniFt

Here’s What You Need to Know About Flying With Support or Service Animals

Recent reports of the difficulty some airline passengers face when trying to board a plane with service animals highlight how confusing the rules are for traveling with them.

“The Air Carrier Access Act (ACAA) requires airlines to allow service animals and emotional support animals to accompany their handlers in the cabin of the aircraft,” according to the ADA National Network.

The American Disabilities Act defines service animals as “dogs that are individually trained to do work or perform specific tasks for people with disabilities” but acknowledges that its definition does not limit or affect the broader definition of “‘service animal’ under the Air Carrier Access Act.”

Today, many types of animals are recognized as service animals, including ducks, ferrets, snakes and pigs.

But most airlines have strict limits on the size and kind of animals allowed in passenger cabins to ensure everyone on board has a safe and comfortable flight.

For instance, Delta has a long list of animals it doesn’t permit to fly in passenger cabins, including spiders, goats, snakes or anything with hooves, tusks or horns.

When policies on prohibited animals collide with rules allowing people to fly with service or support animals, rules can get murky.

In a story that made international headlines, a woman recently tried to board a United Airlines flight with her emotional support peacock.

United representatives told NBC News the airline turned her away because the peacock, “did not meet guidelines for a number of reasons, including its weight and size.”

A similar situation came up in when a woman tried to take her emotional support hamster on a flight. She was denied travel because Spirit Airlines doesn’t permit rodents on its planes.

If you plan to travel with a service or emotional support animal, it’s important to make accommodation arrangements ahead of time because a missed flight can be expensive.

Detailed information on how to travel with a service or support animal can be found on the website of the airline you’re flying on, or by calling customer service.

Here’s a look at the airline rules and passenger responsibilities at five major airline companies.

1. American Airlines

“Service animals, including emotional support animals, are welcome at no charge if they meet the requirements. They must fit on your lap, at your feet, or under the seat, and cannot block the aisle,” according to the company’s website.

Passengers must provide a letter from their doctor confirming their medical diagnosis or provide an authorization form signed by a physician.

Contact American Airlines for disability assistance online or call reservation services at 800-433-7300 or 800-543-1586 (TDD).

2. Delta

“On a Delta flight, service and support animals are expected to be seated in the floor space below a passenger’s seat, or seated in a passenger’s lap. Service and support animals and their associated items travel for free. The size of the animal must not exceed the “footprint” of the passenger’s seat,” according to the company’s website.

Passengers must fill out a Trained Service Animal or an Emotional Support or Psychiatric Service Animal form and also provide veterinary health information about the animal.

Contact Delta for disability assistance at 404-209-3434.

3. Southwest Airlines

“Service and emotional support animals can be placed on the aircraft floor or on the Customer’s lap (provided the animal is no larger than a child under the age of two). Southwest Airlines does not allow the animals to be placed on an aircraft seat,” according to the company’s website.

Passengers traveling with trained service animals will not be asked to specify their disability, but airline employees may ask some questions about what specific assistance an animal provides.

Passengers traveling with an emotional support animal must provide a letter from their doctor confirming their medical diagnosis.

Contact Southwest Airlines for disability assistance at 1-800-435-9792.

4. Spirit Airlines

“Service and emotional support animals can be placed on the aircraft floor or (provided the animal is no larger than a lap child & there’s no inflatable seat belt) on the customer’s lap. No animals or any part of the animals can be placed on an aircraft seat at any time,” according to the company’s website.

Passengers traveling with trained service animals must provide a service animal identification card, written documentation of medical need, or “reasonable credible verbal assurance” from the person with the disability.

Passengers traveling with an emotional support or psychiatric service animal must provide a letter from their doctor confirming their medical diagnosis.

Contact Spirit Airlines for disability assistance at 801-401-2222.

5.  United Airlines

Trained service animals and emotional support animals “should sit in the floor space in front of the customer’s assigned seat but cannot protrude into the aisles. Customers may elect to use an approved in-cabin kennel for smaller animals,” according to the company’s website.

Trained service animals traveling to international destinations may require documentation.

Passengers traveling with an emotional support or psychiatric service animal must provide a letter from their doctor confirming their medical diagnosis.

Beginning March 1, 2018, passengers must also provide veterinary health information about the animal and confirm the animal has “appropriate behavioral training.”

Contact the United Accessibility Desk at 1-800-228-2744 or email uaaeromed@united.com.

Lisa McGreevy is a staff writer at The Penny Hoarder. She once met a support goat and immediately fell in love.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

source The Penny Hoarder http://ift.tt/2BpmBQT

Questions About Tips, L.L. Bean, Disasters, Diets, and More!

What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to summaries of five or fewer words. Click on the number to jump straight down to the question.
1. Finding a mortgage lender
2. Disaster survival bag
3. Spouse won’t tighten belt
4. Healthy and cheap diet concerns
5. Transforming Debt into Wealth?
6. L.L. Bean options
7. How much to retire?
8. Talk me out of it!
9. Cash tips and taxes
10. Books like The Simple Dollar?
11. Fast food after work routine
12. Dealing with the 10% drop

On Saturday, I went to a place that I expected to be a quiet retreat where I could camp out in a side room and get some work done after a long week that involved lots of snow days and child sickness and other unplanned events.

Of course, an old friend happens to wander in, who immediately insists that I go get a drink and chat for a while. She picked up the tab on both of the drinks, but we found ourselves talking about various things for over three hours, largely deleting the time I had set aside for a project. I am absolutely thrilled that I got to see her and have such a good, long conversation with her.

This led me to a very stressful Sunday, which is when I’m typing this. My to-do list for the next six days is long and incredibly intimidating.

It was great to see an old friend, and I don’t regret it for a second. This to-do list, however, is less than great.

Time to get efficient, Trent. Time to get efficient.

Q1: Finding a mortgage lender

My question for the reader mailbox has to do with searching for a mortgage lender. We’ll be buying our first home in the next couple of months and we just don’t know where to start. We’ll be moving to a small town in the Midwest (where there will probably only be a couple of banks/credit unions in town) and I’m not sure how to go about finding the best rate. Our credit scores are 774 and 734 and we plan on putting 20% down. Is there a way to (a) search for a competitive price without physically being in the area we plan to move to and (b) search for a price without having 20 companies run credit checks (and thus further lower our credit score)?
– Maria

Your best approach is to contact specific lenders rather than doing a big batch search. I would strongly encourage you to spend some time investigating specific lenders, starting with ones that operate in the area you’re considering moving to, and find out about their reputation, their customer service, and whether they just repackage and sell off your mortgages to other bigger banks.

So, your first step should be to get a big list of banks and credit unions operating in the area where you’re considering moving and then start investigating them first. What kind of rates do they offer on mortgages? If you can find reviews of them, are they positive or negative (don’t let one or two negative reviews chase you away, though, as there are lots of reasons for that beyond what the review says)?

Once you find a few that seem to match what you’re looking for, call them up individually and ask about their lending process. Do they do manual underwriting? Do they keep the mortgages themselves or repackage them and sell them off? What are their current rates?

At this point, you’ll probably have one or two standouts. Get pre-approval through them and go with the one that seems like the best fit.

Q2: Disaster survival bag

My family were victims of Hurricane Maria. This awful event got me thinking and I want to create a disaster survival backpack to have in the basement of our home. What do you recommend me to have in our backpack?
– Alex

The checklist offered by Ready.gov, which you can see here, really covers it. I think the “Basics” list is really good, which I’m sharing here along with a few of my own notes:

* Water – one gallon of water per person per day for at least three days, for drinking and sanitation (you probably wouldn’t have this in your backpack, but having a few water bottles in there is smart and having a few gallons of water outside of that is also smart)
* Food – at least a three-day supply of non-perishable food (stuff you don’t have to cook and could subsist off of with ease, like nuts and crackers and tuna packets)
* Battery-powered or hand crank radio and a NOAA Weather Radio with tone alert
* Flashlight
* First aid kit
* Extra batteries for the flashlight and radio
* Whistle to signal for help
* Dust mask to help filter contaminated air and plastic sheeting and duct tape to shelter-in-place
* Moist towelettes, garbage bags and plastic ties for personal sanitation (you don’t want to bathe in flood water, trust me)
* Wrench or pliers to turn off utilities
* Manual can opener for food (if your food supplies contains canned goods)
* Local maps (do not trust GPS)
* Cell phone with chargers and a backup battery (this can be a super-cheap pay-as-you-go phone, but make sure you have numbers that you may want to call available on a printed sheet)

You’ll also probably want a change of clothes for everyone in the family and a few very basic toiletries and sanitizing gel.

Q3: Spouse won’t tighten belt

I am a freelancer and with that comes some pay variability. In 2015-2016 I went on a long run of having more work than I could handle and I was able to charge some pretty high rates to boot. We were flush with cash and splurged a little during that time while also paying off a lot of debt. Right now, I’ve still got some work but not as much as I once had and not at the same rates, so my income is down a lot from that peak but still good. The problem is my wife wants to continue to spend like we did in 2016-2017. She did things like buying a season pass for all of us at a ski resort and giving her sister a $5000 wedding gift without even talking to me. We had a big argument about it the other night and she told me that “there was no point in living” without being able to spend like that. We simply can’t afford it and I don’t know what to do.
– Marcus

Your spouse likely feels that the changes in spending from 2016 to now are an attack on her and her choices. My suggestion is to sit down with her and make a budget based on your actual income. Just make a list together of what’s “required” spending and see what’s left over and figure out where that goes, together.

Honestly, this story sounds less to me like a spouse that refuses to buckle down but one who feels like they have a parent/boss telling them what to do. That rarely works well in a marriage.

You need to sit down together and work out a better solution together, and this has to be centered around both of your inputs, not just one person telling the other what to do. If your spouse won’t sit down at all for this process, then you have a problem, but it doesn’t sound like you’ve even tried yet to sit down together and budget as a team.

Q4: Healthy and cheap diet concerns

You can’t make a healthy diet out of just cheap foods. You can’t just live off of rice and beans!
– Adam

Of course you can’t, but you can fill an awful lot of your plate with rice, beans, pasta, and whatever produce is on sale in your grocery flyer. That can make up the vast, vast majority of your diet.

The goal isn’t to eat nothing but rice and beans and cheap produce, but to make those the backbone of your meals, which you can then supplement with smaller amounts of whatever works.

For example, we prepare a lot of Indian dishes in our home. We serve rice with all of them as rice goes wonderfully with sauces and curries.

We just look for things that happen to center around low cost items rather than deciding on a particular expensive item and then trying to jam inexpensive things in alongside it. Rather than saying “what goes good with this $11 cut of meat,” we start by asking “what goes good with rice or with beans or with these super-cheap carrots” and then move from there. If you let the cheap stuff lead, your meal will be far less expensive on average.

Q5: Transforming Debt into Wealth?

I keep hearing about a “Transforming Debt Into Wealth” system on the radio. Can you tell me about it? Is it worthwhile?
– Tammy

“Transforming Debt Into Wealth” is a program promoted by a man named John Cummuta, often on talk radio stations. At its core, the system is extremely similar to most other debt repayment plans, the basics of which I describe here. In fact, the main difference between Cummuta’s plan and any other one out there is the promotional style and the cost of it – “Transforming Debt Into Wealth” is rather expensive.

All debt repayment plans boil down to the same principles – organizing your debts, cutting back on spending, seeing if you can reduce the interest rates on those debts, and then paying them off rapidly. They all offer their own little tweaks that can help motivate you, but the foundation is just that basic debt repayment plan.

Cummuta talks about paying off mortgages in three years, which is possible if you do some extreme cutting and some hardball negotiations on your debts, but that’s true of any debt repayment system.

There’s nothing wrong with it, per se – it’s just a pretty standard program of debt repayment strategies that you can find in lots of other places for free or for minimal cost (depending on the kind of coaching you want). My only real criticism of it is the relative expense, especially since it’s targeting people who are already struggling financially.

Q6: L.L. Bean options

Is L.L. Bean still a good place to buy clothes not that they have ditched their lifetime guarantee?
– Adam

I received several questions about L.L. Bean this week after they announced that they’re ending their lifetime guarantee after, in their words, “a small, but growing number of customers has been interpreting our guarantee well beyond its original intent. Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”

I can understand that perspective, even if it does mean ending a program that set L.L. Bean apart from other clothing lines. However, their replacement program is somewhat limited. “Customers will have one year after purchasing an item to return it, accompanied by proof of purchase. After one year, we will work with our customers to reach a fair solution if a product is defective in any way.”

I think they could have sought out a middle ground, where they track the original owner of the item and allow that person alone a guarantee with the item, then have that policy start in a year or so. To me, that would have been the best “compromise” solution.

So, should a person no longer buy L.L. Bean clothing? I think some of the value came from their guarantee, so I can’t wholeheartedly recommend them any more. They are now on a similar level with a lot of other relatively high quality clothing manufacturers – it was their guarantee and strong return policy that set them apart for me. That doesn’t mean I’d never buy a L.L. Bean item, but that they no longer stand out above the crowd and are now a part of a large crowd of very solid clothing manufacturers.

Q7: How much to retire?

How much money would it take for you and Sarah to retire? Let’s say you were to inherit big money. How much to just stop working?
– David

I would want us to inherit enough to match our current take-home salaries, plus enough to pay for health care costs, plus enough to pay for taxes, and have that only be 2% of the value of our inheritance. That way, we could just invest all of it, withdraw 2% each year, and live off of that, which would be less than the annual growth of the investments, so we’d stay well ahead of inflation.

I’d have to run some numbers on this, but let’s say that I calculated that out to be $100,000 a year. I’d want that to be 2% of our inheritance, so we’d want about $5 million in inheritance to just quit our jobs.

So, yeah, I think $5 million would do it, at least right now.

Q8: Talk me out of it!

I am really really tempted to buy an iPad. I have one of the very first ones and I used it a lot but not quite as much as I might have because it was pretty heavy, about twice as much as it weighs now. I made the mistake of picking one up and playing with one a month ago and now I’m obsessed over getting a new one! But it’s like $600! Talk me out of it!
– Jane

What exactly would you do with that iPad that you can’t already do with the devices you have? What truly different use case do you have that isn’t already met by your phone or by your computer or by your Kindle (or by whatever other devices you have?)

Does the iPad truly do something distinct? If not, there’s absolutely no reason to buy it.

If it does do something distinct, are those distinct things really worth $600 of your hard earned money? If not, there’s absolutely no reason to buy it.

I’ll be the first to admit that an iPad is a cool device, but it honestly doesn’t fill any use case in my life that isn’t met by other devices. It might do a few uses a little better than what I have – for example, setting it up in the kitchen to show a recipe or something – but I have other devices that can actually do that already. Those minor improvements aren’t worth $600.

Q9: Cash tips and taxes

I started working at a restaurant for 20 hours a week. I get paid a low wage plus tips. My boss says I am supposed to report tips on my taxes but how will anyone know what I make in cash tips that I stick in my pocket? I mean with the credit card tips there is a record but with the cash tips, why would I pay taxes on it?
– Kelly

You’d pay taxes on it because the government considers tips to be taxable income. They just require reporting on what amounts to the honor system because it’s basically impossible to really track it.

So, you can just pocket cash tips and not report them because it’s extremely difficult for the IRS to trace it down, but that doesn’t mean it’s not tax evasion. You’re still earning income and not paying taxes on it.

How might the IRS catch you? Well, if they ever get suspicious, they’ll audit you, and if they can determine you’re spending a lot more than you’re reporting, they’ll keep investigating until they have answers. Now, in reality, they probably won’t go after a part-time waitress who mostly receives credit card tips, but the reality is that they might, and by not reporting, you’re leaving that opening.

You’re legally obligated to pay the taxes on your tips. However, it’s hard to easily prove that you’re not doing it, though it can be done. It’s up to you to decide what to do in response to that knowledge.

Q10: Books like The Simple Dollar?

I love your blog and read it daily. My husband prefers books so I wonder, do you guys have a book out that I could buy for him to read? Preferably NOT an online book.
– Alicia

If you want something similar to The Simple Dollar, I’d perhaps first point to my 2010 book The Simple Dollar. While I think that the book is largely good and is actually my own work, I learned some lessons about the publishing industry from that experience. The book was heavily edited and reorganized in ways that I didn’t fully approve of, but there are pieces that I am quite proud of in that book.

This is probably the right place to “soft announce” that I’m writing a different book that I’m intending to self-publish so I can retain more control over the editing process. I’ve been working on it for about three years now and I hope to talk more about it soon. The focus is more on timeless personal finance approaches, in that it will be a valuable read when it’s published as well as twenty years after it’s published. I have zero interest in discussing the hot new investments or the strategy that works right now and doesn’t mean anything in three years.

The book that inspired me the most in my own journey is Your Money or Your Life by Joe Dominguez and Vicki Robin. It really helped me figure out my relationship with money early on in my financial turnaround, and most of the principles have stuck with me.

Q11: Fast food after work routine

Do you have any suggestions for breaking a fast food addiction? I stop for a box of chicken nuggets after work each night because I’m usually famished after work, and I munch them on the way home. It’s expensive as all get out and not particularly good for my health so I tried to cut it out but now I spend the whole drive home absolutely starving both because I really am hungry and because my head is kind of conditioned to think about the drive home as a time to eat nuggets. Ideas?
– Charlie

Stock your freezer with some protein-rich convenience foods that you can microwave as soon as you get home, whatever it is that you like. This is a really good recipe for making your own nuggets that you can freeze, and they’re pretty cheap and definitely healthier than the fast food ones.

You can also (possibly) take a small bag to work and microwave them just before you leave if you find that you really want them on the way home.

I would also suggest exploring other protein-rich foods for this purpose. You don’t have to stick with just chicken nuggets! Consider keeping some nuts in your car, for example, or some beef jerky. Both options are going to be cheaper than a box of nuggets on the way home (and probably healthier, too).

Q12: Dealing with the 10% drop

So I like to check my retirement accounts once a week just to see how things are going. I looked this morning and I had lost $80,000 in a week. I am sitting here having a hard time processing that. Help.
– John

The key thing to remember is that an investment in the stock market is a long term investment that, over the long term, should go up by an average of about 7% or 8% a year. Over the last decade, it’s exceeded that substantially every year, and this is just a correction back down to that average.

Here’s how I look at a stock market drop. First, I go back over the last ten years or so and look at the annual gains. Are they way over 7% each year? If so, then there should be a losing year at some point, and maybe 2018 is that year. It’s hard to predict, but it will eventually happen.

Second, I recognize that the contributions I’m making now are now buying 10% more shares than they were a week ago. A share that cost $100 a week ago now costs $90, so if I invest $1,000, I will now have 11.1 shares, whereas if I bought them a week ago, I would have only bought 10 shares. Shares are on sale right now!

Together, those two thoughts usually undo any negative feelings that I have. In truth, I very rarely check my balances at all. There’s no benefit I can find in doing so, because it’s not really going to cause me to take any action whatsoever. It just causes me to worry with no reason.

Got any questions? The best way to ask is to follow me on Facebook and ask questions directly there. I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive many, many questions per week, so I may not necessarily be able to answer yours.

The post Questions About Tips, L.L. Bean, Disasters, Diets, and More! appeared first on The Simple Dollar.

Source The Simple Dollar http://ift.tt/2ElUXqT

How This Mom Ditched the Cube and Launched a Home Business From Scratch

Becky Flansburg is WAHM, Influencer, Blogger, and Freelance Writer. Her veteran blog Franticmommy.com shares her unique and humorous perspective on children’s books, parenthood, and women in business. She is also the project manager for the non-profit children’s literacy event, Multicultural Children’s Book Day and is one half of the dynamic mommy-duo at UpNorthParent.com. She is […]

The post How This Mom Ditched the Cube and Launched a Home Business From Scratch appeared first on The Work at Home Woman.

Source The Work at Home Woman http://ift.tt/2ElobpI

More Than Free Eggs: How One Family’s Backyard Chickens Keep On Giving

Stroudsburg updated on street projects

STROUDSBURG —The Borough Council reviewed updates on a list of various improvement projects on its local streets Tuesday.Engineering contractor RKR Hess of East Stroudsburg is offering to help the borough apply for funding to upgrade the sanitary sewer line running beneath Ann Street, between Eighth and Broad streets, according to a recent letter to the borough."The options we are investigating focus on... pipe bursting or slip lining to essentially rehabilitate the [...]

Source Business - poconorecord.com http://ift.tt/2sonQge

How to Start Investing on a Tight Budget

If you’re living paycheck-to-paycheck, without much wiggle room in your budget, you might assume that investing just isn’t something you can do right now.

And in some cases you may be right. Sometimes you really do just need to focus on paying your bills, keeping food on the table, and getting your budget in order.

But you don’t need to have a lot of money to start investing. There are a number of ways to get started on a tight budget, and every little bit you can save and invest now will make things easier on you down the line.

Here are a few ways to get started.

Focus on What Matters

Most of the news you hear about investing focuses on the ups and downs of the stock market. And while that can certainly be entertaining, the truth is that those ups and downs are largely irrelevant when you’re just starting out.

There are two things that do matter though, and both your wallet and your anxiety level will thank you for focusing on them instead:

1. Your savings rate: No other factor is even remotely important as your savings rate. Investing even a little bit now will help, and finding small ways to increase that savings over time go a lot further than trying to study or time the stock market.
2. Costs: Cost is the single best predictor of future investment returns, with lower costs leading to better returns. And minimizing your costs is especially crucial when you’re on a tight budget, since even small fees can take a huge bite out of your savings.

Build an Emergency Fund

An emergency fund is simply money you keep in a savings account for those unexpected expenses life always seems to throw your way.

And while this isn’t technically an investment in the sense that you’re not putting money into mutual funds, stocks, or bonds, there are a few reasons why it’s a great first step:

1. It’s an investment in your financial security, and a secure financial foundation makes it easier to invest in your financial future.
2. Good savings accounts come without any minimum balance or contribution requirements, so you can get started with any dollar amount.
3. Given that your savings rate is far more important than your investment return, you’re not sacrificing as much as you might think by keeping your money out of the market.
4. The skills needed to build an emergency fund – namely making regular contributions and letting the money grow without touching it – are skills that will also help you build your investments. Honing them now will help you later.

Invest in Your 401(k)

Here’s where we get into the traditional long-term investments.

Your 401(k) – or your 403(b) or 457 in some cases – is a retirement plan offered by your employer. You typically contribute a set percentage of every paycheck and choose from a collection of mutual funds in which you can invest. Your contributions are usually tax-deductible and the money grows tax-free until you withdraw it in retirement.

There are a few reasons why your 401(k) is a great place to start investing when you’re on a tight budget:

• It’s easy to setup. All you have to do is choose how much you’d like to contribute and you’re good to go.
• There are no minimum contribution requirements. You can start by contributing as little as you’d like.
• You may get an employer match, which could as much as double the impact of every dollar you contribute.
• Your contributions are tax-deductible, which means that the hit to your take-home pay is smaller than your actual contribution. You may even be eligible for the saver’s credit, which would put even more money back in your wallet.

Contributing to your 401(k) up to the point where you’re maxing out your employer match is a no-brainer as a starting point. Especially when you’re on a tight budget, those extra dollars can make a big difference.

Beyond that, it’s worth noting that some 401(k)s are burdened by high-cost investment options, which might make other accounts more attractive as a next step. Which brings us to…

Start an IRA

If you don’t have a retirement plan at work, or if your employer doesn’t match contributions, you could consider starting with an IRA instead.

An IRA is simply a retirement account that you open on your own instead of through an employer. And it comes in two different flavors:

• Traditional IRA: Your contributions are tax-deductible and your money grows tax-free, but your withdrawals in retirement are taxed.
• Roth IRA: Your contributions are not tax-deductible, but your money grows tax-free and you can withdraw it tax-free in retirement.

While there are often reasons to prefer one or the other, for our purposes here all that matters is that they are both great ways to save and invest. The trick is finding one that one that doesn’t charge a lot of fees and that doesn’t have minimum account balance or contribution requirements.

Betterment could be a good choice if you’re looking for an easy, low-cost way to open an IRA without any account minimums. You can review other IRA providers here.

Pay Off Debt

Like building an emergency fund, paying off debt is not an investment in the way that we typically think about investments.

But if your objective is simply to make the most out of the few dollars you have available to save, paying off debt might be your best option.

Think about it this way: Experts seem to agree that 7% to 7.5% is a reasonable estimate for long-term stock market returns. But those returns are not guaranteed, there will be lots of ups and downs along the way, and a more balanced portfolio that includes bonds may reduce that estimate to 6% to 6.5%.

On the other hand, every extra dollar you put towards debt earns you a guaranteed return at the rate of your interest charges. Putting an extra dollar towards your credit card that charges you 15% in interest earns you a 15% return. An extra dollar towards your student loan with 6% interest earns you a 6% return.

Put simply, paying off high-interest debt often allows you to get stock market-like returns without all of the uncertainty. If that’s not a smart investment, I don’t know what is.

Invest in Yourself

Learn new skills. Negotiate a raise at work. Find ways to earn some income on the side.

These investments in yourself generally only cost some of your time, but can pay off in the form of more income — which means you’ll have more money available to save and invest.

And given that your savings rate is the most important part of your investment plan, this may be the single best move you can make.

Matt Becker, CFP® is a fee-only financial planner and the founder of Mom and Dad Money, where he helps new parents take control of their money so they can take care of their families.

Related Articles:

• Don’t Let These Fears Stop You From Investing
• Why Employer Stock Is One of the Riskiest Investments You Can Own
• The Incredibly Valuable Role of Frugality in Investing

The post How to Start Investing on a Tight Budget appeared first on The Simple Dollar.

Source The Simple Dollar http://ift.tt/2sogn0Z

7 Simple Steps to Take This Week to Improve Your Finances

One week. Seven days. It’s not such a long time.

But if you commit to the seven-day plan we’re laying out here, you can fix your finances in just a week. Then you can flex your arms and say, YES, I AM MR./MRS. FIXIT.

At the very least, you can take steps to improve your financial situation in some tangible ways.

C’mon, seven days. Give it 15 minutes a day. Get out your calendar, and let’s give it a go.

Day 1: Take Steps to Raise Your Credit Score

How about a better, more strategic look at your finances — particularly your debts? Credit Sesame can help you figure it out.

Credit Sesame gives you a “credit report card” that shows you a free credit score, plus lays out your credit history so you can see exactly how much money you owe and to whom.

It even tells you your monthly payments and interest rate, as well as which debts are in collections.

The app lets you keep track of your credit score and recommends ways to improve it. Also, signing up for it won’t hurt your credit score.

For example, it might recommend a mortgage lender, credit card or debt refinancing company, based on your needs and chances of being approved.

Small business owner Kenneth Bain raised his credit score 234 points using Credit Sesame. He said it became like a game, and he wanted to achieve the high score.

“I literally checked my credit every day, two to three times a day,” he told us. “I remember the day I logged on and saw 721… and [I thought], ‘Yes, finally! My hard work paid off.’”

You can sign up for Credit Sesame and get your free credit report card here.

Day 2: Start Stashing Some Cash Away

It’s no brilliant secret that investing can be a smart way to grow your money.

Sometimes, though, it feels restricted to a few wealthy elite.

Stash is different. This app lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000. (The first month is fee-free.)

Stash curates investments from professional fund managers and investors and lets you choose where to put your money.

It leaves the complicated investment terms out of it. You just choose from a set of simple portfolios reflecting your beliefs, interests and goals.

Bonus: Right now, The Penny Hoarder is teaming up with Stash to fund your first investment — so you’ll get a $5 bonus to get started!

Day 3: Consolidate Your Debt

Consolidating your debt could substantially reduce payments you’re already making on your debt and help you save more money each month.

A lot of us are being crushed by credit card interest rates north of 20%. If you’re in the same boat, it might be worth seeing if you can consolidate and refinance your debt.

A good resource is consumer financial technology platform Even Financial, which can help match you with the right personal loan to meet your needs. Because you’re not applying for the loan, checking out your options won’t ping your credit report.

Even searches the top online lenders to match you with a personalized loan offer in three steps. Even’s platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.

Day 4: Have a Robot Negotiate for You

The price of internet — and cable, if you’re still into that kind of thing — certainly isn’t decreasing. If anything, prices are steadily climbing.

And if you’ve had to chat with a representative from your internet or cable company recently, you know how long you can sit on hold.

That’s why it’s time to call in a robot. A negotiation bot like Trim will negotiate your cable or internet bills down for you.

It works with Comcast, Time Warner, Charter and other major providers. You can sign up simply with Facebook. Then upload a PDF of your most recent bill, and Trim’s AI-powered system gets to work. If at first it doesn’t succeed, it’ll keep negotiating until it can save you some money.

Also, if you have any outages, Trim believes you deserve a credit, and it’ll handle that for you.

Trim keeps 25% of the savings tab, and you get the rest.

Day 5: Seriously Rethink Your Student Loans

For some, lowering your interest rates could be one of the best ways to pay off student loans.

Try getting a lower interest rate on your federal and private loans by refinancing with a company like Credible. There are others that offer similar services, but we like that the average Credible user saves about two interest points on their current federal loans — or an average of $18,886.

Refinancing will generally mean replacing your laundry list of loans with one (or a few) loans that bring all your student debt under one umbrella.

This could simplify your life with one monthly payment, instead of several. It might also reduce your monthly payment, improve your interest rate and/or give you more time to pay.

It might seem like a small difference, but a lower interest rate can mean a lot of savings over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan!

Enter your info at Credible to find out what your new interest rate could be (without pinging your credit).

Day 6: Start Keeping Your Receipts

Can’t hold off on that purchase for a big sale? Do the next best thing: Buy it now and get a refund next time the price drops.

Your secret weapon here is an app called Earny. It scans your emails for receipts, looking for online purchases from participating retailers like Amazon and Target.

Earny takes advantage of retailers’ price-match policies to negotiate a refund on your behalf. So you don’t have to do anything — just wait for a notification that you’ve earned cash back.

You’ll get a refund via your original payment method, store credit or a check in the mail, and Earny keeps a 25% fee only when it saves you money.

Day 7: Maximize Your 401(k)

Got a 401(k)? You’re on the right track.

Now you just need to make sure it’s doing what you need it to. However, tapping into that account and deciphering the information — or lack thereof — can be hard.

There’s a robo-advisor for that. Blooom, an SEC-registered investment advisory firm, will optimize and monitor your 401(k) for you.

A few of us Penny Hoarders use the service. It gives you an initial 401(k) checkup for free, and you’ll get to know your account a little more intimately. Find out if you’re paying too many hidden fees, have the appropriate amount invested in stocks versus bonds, that kind of fun stuff.

After that, the tool is $10 a month to use to continue to monitor your retirement account. Let Blooom know your target retirement age, and it can help you get there by investing more or less aggressively.

And that’s it. One week.

Seven days.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s going to need more than seven days to fix his finances.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

source The Penny Hoarder http://ift.tt/2CerfxR

Jeff Prestridge: Fraudsters want to make me a Bitcoin millionaire, turn my pension to cash and give me whiplash compensation

I am currently plagued by an unholy alliance of nuisance calls, texts and fraudsters. They are intent on trying to remove what little remains in my bank account now that I have paid my tax bill.

I feel as if I am suffering my own financial version of John Wyndham’s The Day of the Triffids – The Day of the Fraudsters. Or more appropriately, The Days and Nights of the Fraudsters. Rather than by aggressive plants, my life is being invaded – plagued – by fraudsters.

• Jeff Prestridge: Three ways I plan to get rich in 2018

Wherever I am and whatever time of day it is, my Garmin Vivofit Band is constantly vibrating, telling me that someone is either pinging a text I do not want or ringing out of the blue. Some days, the number of nuisance calls and random texts exceed the few steps I’ve managed to take after spending most of the day glued to my office chair.

So I’m left unfit physically and, if the fraudsters and chancers get their way, financially denuded. It’s the worst of both worlds.

Since I began the year in a fairly good mood, the clouds have darkened. I have been told that I have had an accident in my natty Mazda MX5. This is even though, apart from an incident-free trip to The Belfry hotel in Sutton Coldfield to spend Christmas Day with my mum, the car has been sitting in the garage quietly gathering dust.

Of course, it was a company phishing for personal injury or whiplash compensation claims, but the call still troubled me. Did I clip a car in The Belfry car park on the way out? The mind does play tricks at such times.

I have also been texted to ask whether I want to turn my pension into cash. The message – not the first – was from fraudsters trying to rob me of my pension, one of the few assets in my armoury of which I am proud. Naturally, I ignored it. But the fact that fraudsters are still sending out such messages and calls is alarming. Financial fraudsters, it seems, are thriving – like few others – in brittle Britain.

There is more. My mother was called out of the blue to be told a cheque was awaiting her because she had overpaid bank charges. It me took a long time to convince her that it was a scam. “Jeff, he seems such a nice man,” she said. When he rang back as arranged and Mum asked him to name her bank, he slammed the phone down on her.

As for myself, I am being aggressively targeted by chancers attempting to persuade me to become a millionaire by joining the Bitcoin revolution. Indeed, as I put pen to paper and wrote this article, I received two Bitcoin texts. One imploring me to “ride the wave of Bitcoin and earn a guaranteed $13,000 in exactly 24 hours”. The other stating: “Become a millionaire literally overnight with this Bitcoin secret.” Yes, and pigs can fly.

• Credit card providers ban customers from buying Bitcoin

Over the past year, I have had fraudulent withdrawals made from my bank account, had someone try to take out a loan in my name and received a phalanx of emails urging me to make a PPI claim. That’s enough scams and nuisance calls to turn an individual to drink (journalists do like an occasional tipple).

Sadly, my experiences appear to be the norm. According to research by insurer Aviva, consumers last year were bombarded with more than two billion financially-related nuisance calls and texts. That’s the equivalent of 4,200 calls and texts made every minute. Yes, a plague out of control and in dire need of extermination.

There are measures we can take to thwart these nuisance callers. The soundest is to register with the Telephone Preference Service (Tpsonline.org.uk) to opt out of receiving unsolicited sales and marketing calls. Like a castle moat, it will not provide a sure-fire defence – some scammers will get through – but it is a good starting point.

But if we really want to stop these charlatans wreaking havoc in our financial lives, then both the regulators and the government need to do their bit.

So we need the regulator – with the Information Commissioner’s Office (ICO) leading the way as it will enforce the ban – to hunt down the perpetrators, fi ne them and preferably hound them out of business. By the way, the ICO has useful information on personal data and your rights at Ico.org.uk/for-the-public/nuisance-calls/

It is high time it acted on a promise to tackle cold-calling. Legislation is inching its way through parliament that could allow it to introduce a cold-calling ban.

• Pension cold callers must be banned now

It cannot come soon enough. Just think, no more PPI, motor accident or pension-related nuisance calls. Bliss. A mood changer.

Jeff Prestridge is the personal finance editor of The Mail on Sunday. He won the Contribution to Personal Finance Education category at the Santander Media Awards 2016. Email him at columnists@moneywise.co.uk 

Section

• Scams & rip-offs
• Scams

Free Tag

• scams
• Cyber Aware
• fraud

Related stories

• Jeff Prestridge: Three ways I plan to get rich in 2018
• Credit card providers ban customers from buying Bitcoin
• Pension cold callers must be banned now

Twitter

Source Moneywise http://ift.tt/2BnNNzn

Virgin apologises for the late arrival of customer’s refund

Simon Read helps a reader who's refund from Virgin Trains didn't show up for months.

On 10 September 2017, I bought tickets to travel to Edinburgh at the end of October 2017. Later, I had to change the return date. According to the policy of Virgin Trains, I couldn’t exchange the tickets, but had to buy entirely new ones for the new trip. I did and raised the request for a refund of the initial set of tickets, which cost £147.75, on 7 October 2017.

• 11 tips to cut the cost of train fares

Now, it is 30 November and the status is still pending. I called service and wrote to customer service, but the only reply that I got was that my “refund is ready for processing”. I like the Virgin brand, but this kind of service is very disappointing...

MS/Woking

It is disappointing and needlessly so. When I contacted Virgin Trains, it moved as quickly as one of its Pendolino trains. The company wrote to you to apologise for the delay and refunded the full cost of the original tickets. That pleased you but also left us both puzzled.

• Rail fares rise by largest amount in five years

“It is good news, but it’s a pity that it takes two and a half months and your inquiries to move things forward,” says MS. “I wonder why it delayed it in the first instance and I wonder if there are more people affected still waiting for their refund?” That’s a fair question!

OUTCOME: Virgin refunds £147.75 train tickets 

Simon Read is a money writer and broadcaster. He was the last personal finance editor at The Independent and is an expert on BBC1’s Right On The Money. 

Section

• Scams & rip-offs
• Fight for your rights

Free Tag

• train fares
• commute
• Fight for your rights

Related stories

• 11 tips to cut the cost of train fares
• Rail fares rise by largest amount in five years
• Rail passengers can claim for 15 min delays as 'Delay Repay' takes force

Twitter

Source Moneywise http://ift.tt/2BRkczr

Nine Things Nobody Tells You About Starting Your Own Business

For many people who are inherently entrepreneurial, starting a business is the ultimate dream. With their own business plan in the works, they could escape the 9-5 rat race, work on their own terms, and work hard for themselves instead of working to build wealth for someone else. Without a boss, aspiring business owners would also be free to take a chance on their ideas and do everything their way for once.

And, forget about working for a salary or hourly wage; when you own your own business, you can theoretically make as much money as you want.

With all those potential upsides, it’s no wonder people willingly give up workplace perks like a 401(k) match and employer-sponsored health insurance. If you had the potential to earn an unlimited salary and work for yourself, why wouldn’t you take it?

Small-Business Truths Nobody Tells You About

Yes, people who start their own business use these reasons and others to justify their decision. Unfortunately, the idea of running your own business is often much different than the reality.

While you may have freedom, your new role as boss may come with a lot of junk you don’t want – things like longer hours, risk, and financial hardship.

This could be the reason only half of small businesses and start-ups survive five years and only a third exist beyond 10 years, according to the Small Business Administration. Starting your own business may seem like the ultimate way to earn more money while also taking control of your life, but it can be difficult to make it work in the long run.

Perhaps that’s because people focus too much on the upsides of starting a business without honing in on the nitty-gritty details. At some point, those daydreams collide with reality, and the results aren’t always pretty.

For this reason, we spoke to a handful of business owners to find out what nobody ever tells you about running a business. What do most entrepreneurs wish they had known before they started their own business? Also, what do they think other people should know before they strike out on their own? Here’s what they said.

#1: You won’t always get to ‘follow your passion.’

The advice to “follow your passion” or “do what you love” is repeated all the time within entrepreneurial circles, but it’s not realistic to assume your business will never require you to take on other roles. Steven Fox, the founder of Next Gen Financial Planning in San Diego, says this is one lesson he had to learn the hard way.

“I’m a financial planner running an independent firm, and I drastically underestimated the time that I would spend on tasks such as bookkeeping, compliance, marketing, business planning, setting up software tools to use, networking, fixing broken printers, and many other tasks that go along with running a business,” says Fox.

You can outsource some of these tasks, and you should, he says. But outsourcing costs money you may not have at first. When you initially start your business, you may wind up spending a ton of time on administrative work you don’t want to do. The sooner you accept this, the better off you’ll be.

#2: You’ll need to reinvest some of your profits.

Author and investor Joseph Hogue of My Work from Home Money says he wishes people knew they would have to reinvest some of their profits back into their business. If they did, they could plan for upcoming expenses and adjust their income expectations accordingly.

“Everyone wants to pull out all the profit in their business and enjoy the fruits of their labor, but nobody tells you that a big part of your future success is reinvesting in your business.”

Hogue says he reinvests about 20% of his profits back into his business year-round, usually to hire freelancers or to cover other growth projects. This ongoing investment lowers his take-home pay, but he believes it will help him earn more money in the long run.

The bottom line: The old saying that “you have to spend money to make money” is certainly true at times, and new business owners would be wise to consider how spending some cash could help their business grow.

#3: Don’t rely on your family and friends for honest feedback.

Jim Wang, the blogger behind Wallet Hacks, says it can be difficult to get realistic feedback on your idea from people you know. Your friends and family will tell you that your idea is great, and that they’ll support you and buy whatever you’re selling, he says. Some actually will, but most are simply being polite.

“You won’t ever get honest feedback from most of your friends, so don’t use that input as a measure of whether or not a particular venture is a good one,” says Wang. “And don’t be offended when you do start and your friends and family don’t come to buy. Just remember they’re your friends first and not future customers.”

Instead of relying on your own network, look for other ways to test your business idea. Options to consider include cold calling potential clients, trying to sell your product, or hiring a market research company.

#4: You will have to work – a lot.

A lot of people who start a new business envision themselves kicking back and working less. They’ll just hire people to do the grunt work, they say. And once it’s all set up, they’ll be free to do what they want while keeping an eye on their business from a distance.

Unfortunately, this is rarely the reality – especially at first. If you’re starting a business from scratch, you will need to work hard to succeed. It’s not as simple as opening a business, hiring your first employee, and watching the money roll in.

“You will need to out-hustle the competition, be flexible, and adapt to what your target client or customer is telling you that they want,” says Ryan Inman, host of the Financial Residency podcast and fee only financial planner for physicians at Physician Wealth Services.

Entrepreneurs are the only people in the world who will work 70-hour weeks just to escape the normal 9-5 slog. If you can’t handle those hours – especially at first – it’s likely you won’t make it.

#5: You have to get comfortable asking for money.

CPA and wealth expert Belinda Rosenblum of Own Your Money says that, even with a business degree and 15 years in corporate accounting and finance, she was grossly unprepared for the challenges of running her own business. One of those challenges was the belief that she could set up her business and the money would come on its own.

Over time, Rosenblum says she realized that, if she wanted to eat, she had to get used to asking for cash.

“You have to literally ask for every dollar you bring in,” she says, whether that means cold pitching new clients, requesting clients pay their invoices, or raising your rates.

Obviously, this is a lot different than having a traditional 9-5 job where, outside of asking for a raise or negotiating a salary once in a while, you receive regular paychecks without having to badger anyone for the money.

#6: Your worst moments are probably defining moments.

Entrepreneurship is full of ups and downs, and success is never a straight line. You might feel like everything is going great one day and awful the next, and those bumps can be too much for certain personality types to take.

However, personal finance influencer Michelle Jackson says that, in her experience, the most frustrating and depressing moments are the ones that set the stage for incredible success. Even the small “wins” can make a big difference in your entrepreneurial experience, she says, provided you have the tenacity to make it through the hard times.

Unfortunately, when it comes to hardship, a lot of people just can’t hang. They watch their business have a few bad weeks or months in a row and believe their dreams are no longer worth pursuing. But this is where having a realistic view of hardship can go a long way. If you’re able to see your low points as part of the process, you’ll have a much better chance at success.

#7: There is no road map.

Financial coach for physicians Dr. Jenn MD says that one of the hardest facts she had to come to grips with as a new business owner was the fact that there is no road map. She could have taken her business in a ton of different directions, but she was the one who had to choose.

In a lot of ways, building your own business can make you feel like you’re “winging it” all the time. Her advice? “Plan to be uncomfortable while you find your way,” she says.

With no road map, you may also find that everything takes twice as long and costs three times as much, says Paul Vasey, the entrepreneur behind Cash Crunch Games.

So, you can plan all you want, and you should, but you may not know where your business is going until, suddenly, you’re there. It can be uncomfortable to create a business plan and follow it while also tinkering with the details as you go, but it’s just part of the process.

 

#8: Successful people can make it look easy, but that doesn’t mean it is.

Just because someone’s story sounds like an overnight success doesn’t mean it is, says Kayla Sloan, a self-employed virtual assistant and the founder of $10K VA. Sloan says she read tons of success stories as she built her business, but she ultimately felt that few people talk about their struggles.

Success stories usually “glaze over the blood, sweat, and tears of what it really takes to be successful,” says Sloan.

People see the freedom you have and they may see proof of your financial reward, but they have no idea of the kind of work entrepreneurship requires. And just because some people make entrepreneurship look easy doesn’t mean it is. The vast majority of the time, successful people have put in a ton of time and effort to get where they are.

#9: You can start a business while you still work full-time.

Last but not least, too many people think they have to quit their jobs and risk everything to follow their dreams. According to Chenell Tull of Hustle to Startup, this couldn’t be further from the truth.

If you can, Tull says, you should start your business as a side hustle while you still have a day job. This way, you can make sure your business idea is a good one and start building a reliable income stream as you go.

“Get it running to where you can safely save enough money for eight months of expenses and have a decent income from the business before you go all in,” says Tull. “Yes, having a side hustle and a day job means you will have to work long hours, and it will be a lot of work.”

Once you have a proven business idea that’s also profitable, you can scale back at your 9-5 or quit altogether. In the worst-case scenario, you’ll find your business idea doesn’t work and you need to stay in your job longer than you want – but at least you’ll still have income coming in. On the flip side, however, this strategy could help you earn money in your spare time while you continue building a business that will replace your entire income one day.

• Related: 50 Side Businesses You Can Start on Your Own

The Bottom Line

Starting your own business isn’t all puppies and cupcakes. Being your own boss does have it perks, but you often pay for those perks with longer hours, more responsibility, and a whole lot of stress.

But, the spoils go to those who work hard and, most importantly, never give up. So, if you want to start your own business, you should create a feasible business plan and stick with it no matter what.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

Related Articles:

• How Real People Earn a Side Income With Amazon and eBay
• 31 Days to Financial Independence, Day 21: Starting a Side Business
• How to Write a Simple Business Plan for a Small Side Business
• Small Business Guide to SBA Loans

What do you wish you knew before starting your own business?

The post Nine Things Nobody Tells You About Starting Your Own Business appeared first on The Simple Dollar.

Source The Simple Dollar http://ift.tt/2nYhK0U

Marathoners Can Save Big With These Running Gel and Energy Ball Recipes