If sales are hemorrhaging or customers are flocking to dealmaking competitors, discounting might be necessary. But chopping prices is not without risks, including a cheapened brand image and customers who will never pay full price again. And if there’s no demand, even signs that scream “Lowest Price Ever!” won’t draw customers. “The primary factor that determines the price you’re going to get is what the demand is,” says Roland Rust. “In a situation where people want things less, the price has to be right.”

According to an SBA report, “Expected Costs of Start-up Ventures,” published in November 2003, the average business with one owner costs about $6,000 to start, and the average business with two or more owners costs about $20,000. Where does this money come from? Thirty-one percent (31%) of all start-ups are funded through the entrepreneur’s personal credit cards. Other sources mentioned are loans from friends or family, mortgages on property, savings, cashing out retirement accounts, an inheritance, a full or part-time job…

Pricing… you can’t be a professional photographer for very long without becoming embroiled in the subject of how to price your work (well, you could, I suppose, but you would never make any money). Then there is the question of, not only what prices to charge, but also how to make your clients aware of your price list without them either running away or thinking you are trying to pressure-sell them. Just about every photographer I know has been through this painful process. But, there is an answer…

Last month, I gave a talk on “Surviving and Thriving in Real Estate” to about 200 people. I went around the room and met about 50 people before I spoke. I asked, “If you were giving today’s talk, what would you say?” I got eight great ideas and shared them with the audience. I showed them: If you’re working, you already know what works.

When banks say no, owners of cash-starved small-businesses aren’t giving up on finding loans. Many are turning to microlenders for the money they need to meet the payroll, buy supplies, pay the rent and keep the lights and heat on. These microlenders — community-based nonprofit lenders that draw on a varying mix of financing from the Small Business Administration; other federal, state and local government agencies; and some philanthropies — say small businesses and entrepreneurs are increasingly seeking financing as home equity loans, credit lines and other loans have all but evaporated.

When big initial costs make it hard to start your business, look further into the figures—they may not be as scary as they seem
As a startup wedding and event photographer, I made a list of all everything I need to purchase for my business, and it literally scared me. Between investing in equipment, software, Web site design, and advertising, my projected income is much less than my necessary expenses for this company. Photography has been my life’s passion, and I really want to succeed. Is there any advice you can …

Are you missing tax deductions you’re entitled to? Small business owners, self-employed workers, and independent contractors can write off many legitimate business expenses immediately, reducing the amount of income on which they pay taxes. But if you overlook applicable deductions or fail to keep adequate records that will back up your write-offs during an audit, you give up opportunities to cut your tax bill.
The Schedule C tax form used by sole proprietors to report business profit or loss has 21 line items for business expenses—including such catch-all categories as “office …

What to include in your employee handbook
Think your business is too small for an employee handbook? Worried that your written policies will open you up to lawsuits? Whatever the excuse, the truth is an employee handbook is an essential resource in your business–as an introduction for new employees and as a reference guide for your existing staff. Scratching your head on where to start? Follow this simple checklist to create an effective employee handbook for your small business…more at By the Book – NFIB.com.
Flickr photo credit: Wan Zafran

There are many variables to choosing the right business entity, but a good place to start is to prioritize liability issues over tax issues
Q: I’m trying to start an independent record label, and I’m also a piano accompanist. I’d like to combine both those services under one company, but I’m still deciding whether to classify my business as a sole proprietorship or a corporation. Would a corporation provide me with more tax advantages if I earn under a certain amount of income? If I’m more successful in subsequent years, would …

With corporate managers under enormous pressure to control costs and maintain liquidity in the current credit crisis, advertising budgets often appear to be a dispensable luxury in the struggle to survive. Executives who succumb to that temptation, however, put the long-term future of their companies at risk, according to Wharton faculty and advertising experts.
“The first reaction is to cut, cut, cut, and advertising is one of the first things to go,” says Wharton marketing professor Peter Fader, adding that as companies slash advertising in a downturn, they leave empty space …