someone who hasn’t put in his own time and his own money," says

Scott. Investors have the same criteria, so the owner of a new

business

has to be prepared to dig into his own savings, and perhaps even

mortgage

his house or sell some assets to get the business going before he

asks outsiders to provide funding.

capital, and they also might be useful collateral. That is the case

with ExpertPlan, one of Scott’s clients, located at Windsor Corporate

Park. "They have about 100 plans," he says of the 401(k) plans

the company administers. "They’re adding about 10 or 20 a

month."

These plans have value to anyone who might consider purchasing

ExpertPlan,

Scott explains, in the same way that each cable subscriber adds value

to a cable company, and each water customer adds value to a water

company. In the case of ExpertPlan, Scott figures each 401(k) plan

adds $10,000 to the company’s value.

carefully.

"There are landlords in New Jersey no one should work with,"

says Scott. These are the landlords that require personal guarantees

on office leases, and show no inclination to bend with the winds of

economic change. Others will work with tenants, perhaps helping them

through a cash crunch. "You want to do business with good

people,"

says Scott. Establish a network of vendors, customers, business

partners,

and landlords, and do your part by helping them out — perhaps

by sending business their way.

working at funding your company. "Tell vendors, customers, your

accountant, everyone in the family. No source should be

overlooked."

days going to meetings and funding fairs to meet angel investors.

A better tactic, says Scott, is to research your company’s industry

so well that you are aware of all of the players. Among them are

recently

retired executives, some of whom may want to stay in the game. With

luck, one might decide to fund your company.

SBA Funds

SBA loan programs enhance your chances of getting money, because they

relieve some of the lender’s risk.

the government makes good the major portion of the loan. The SBA can

guarantee as much as 85 percent on loans of up to $150,000 and 75

percent on loans of more than $100,000. The loans can be five to 10

years for working capital, and up to 25 years for fixed assets such

as real estate or equipment purchase.

and rapid turnaround on approvals for loans up to $150,000. The SBA

will guarantee up to 85 percent of the loan and usually turns the

applications around within 36 hours. Eligible: Start-ups and

businesses

with average annual sales for the past three years not exceeding $5

million and with 100 or fewer employees, including affiliates.

The SBA will guarantee up 50 percent of the loan, which can be up

to $150,000.

guarantee for short-term and seasonal working capital needs: material

and labor needs for a contract, seasonal inventory increases,

financing

for a small general contractor. It can be an advance against accounts

receivable.

that will grow to create jobs. This national program offers a low

down payment (just 10 percent of the total project cost) and a fixed

interest rate, usually below market. It can cover all costs, including

"soft costs" like appraisals and fees.

for capital expenditures and working capital. This is a "last

resort" loan available to nearly any company. They are available

from the Trenton Business Assistance Corporation.

Front Street, Trenton 08608-2102. Deborah Osgood, executive director.

609-396-8271; fax, 609-396-0559. Home page:

community.nj.com/cc/tbac.

A community development small business loan fund providing financing

and technical assistance to business in Mercer County.

Other Private and Public Funding

Lafayette

Street, Trenton 08608-2088. David M. Scheck, executive director.

609-989-7766;

fax, 609-393-9401. Home page: .njclf@njclf.com">www.njclf@njclf.com A statewide,

nonprofit community development financial institution providing loans

and technical assistance for low income housing and economic

development.

State Street, Box 990, Trenton 08625-0990. Caren S. Franzini,

executive

director. 609-292-1800; fax, 609-292-5722. Home page:

www.njeda.com.

A self-supporting, independent state financing and development agency.

Though the NJEDA operates under the supervision of the New Jersey

Economic Development Authority, the NJEDA has its own funds derived

from casino revenues. It offers loans for start-up and micro

businesses

to spend on real estate, fixed assets, and working capital. For fixed

assets and working capital, the same pool can provide loan guarantees.

Venture Capital Resources

Venture capitalists will want an equity share of your

business, and they will look over your shoulder to supervise

management.

Some of the VCs that make small to medium-sized investments:

Princeton

08542. Jim Breyer, managing general partner. 609-683-4500; fax,

609-683-0384.

Home page: www.accel.com Focus on communications and

Internet/intranet

firms, headquarters in Palo Alto with $3 billion under management.

Road, Suite 104, Princeton 08540. Anthony C. Warren. 609-688-9990;

fax, 609-688-9988. E-mail: tonytekbank@aol.com.

Princeton 08542. John K. Clarke, managing general partner.

609-924-6452;

fax, 609-683-0174. Home page: www.cardinalpartners.com. Venture

capital, with $185 million under management, investing $6 to $8

million

per company in healthcare, life sciences, medical products, and

healthcare

services.

515, Princeton 08542. James C. Blair, general partner. 609-683-5656;

fax, 609-683-9789. E-mail: domain@domainvc.com. Home page:

www.domainvc.com.

Venture capital investments in life science companies. Provides $30

to $40 million annually to U.S.-based ventures concentrated in the

life sciences.

08558. Ron Hahn/Jim Millar, general managers. 609-921-8896; fax,

609-921-8703.

E-mail: ron@esevc.com, jim@esevc.com. Home page: www.esevc.com

Venture capital investor in seed and early stage companies, with $44

million in assets, an SBIC company.

4, Suite 200, Lawrenceville 08648. John H. Martinson, managing

partner.

609-896-1900; fax, 609-896-0066. E-mail: info@edisonventure.com.

Home

page: www.edisonventure.com Equity financing and guidance to

growing

companies with proprietary technologies or unique services in emerging

markets, with $300 million under management.

Princeton

08542. James H. Cavanaugh, president, general partner.

609-430-3900;

fax, 609-430-9525. Healthcare investments, with $838 million under

management.

Boulevard,

Suite 310, Princeton 08540. Ted Stack, co-managing director.

609-452-7100;

fax, 609-452-7134. Home page: www.inhealthventuremgmt.com

Business

acceleration services for start-up companies in the healthcare,

healthcare

risk services, and technology sectors.

Princeton 08540-7645. Robert F. Johnston, president. 609-924-3131;

fax, 609-683-7524. E-mail: jaincorp@aol.com. Venture capital and

investment banking with focus on seed capital for healthcare and

biotechnology.

Forrestal Village, Princeton 08540. Richard Secchia, partner.

609-936-3013;

fax, 609-936-3051. Home page: www.kemperventures.com Invests

$1 to $5 million in early stage technology-oriented companies.

309, Princeton 08542. Stephen Shaffer, partner. 609-497-4646; fax,

609-497-0611. E-mail: pennylanepartner@msn.com. Expansion financing

for early to mid-stage companies, a participating security SBIC, with

$30 million under management.

David C.A. Plimpton, managing partner and president. 609-924-8244;

fax, 609-924-8236. E-mail: info@plimpton.com. Home page:

www.plimpton.com

Venture capital, with $200 million under management

204, Princeton 08540. Pasquale DeAngelis, chief financial officer.

609-919-3560; fax, 609-919-3570. E-mail: pato@proquestvc.com. Home

page: www.proquestvc.com Venture capital firm with a focus on

cancer

research with $200 million under management.

Brook Drive, Silicon Garden, Somerset 08873. Daniel J. Conley, venture

catalyst. 732-873-1955; fax, 732-873-3237. E-mail: OnCallCFO@aol.com.

Home page: www.OnCallCFO.com Expansion capital, venture

capital,

creative leasing to business owners, coaching entrepreneurs and

business

owners in business plans.

08540 (until mid January, 2002, at 989 Lenox Drive, Building One,

Room 208). John Whitman, Kilin To, and Peter Gerry, managing partners.

609-759-8888; fax, 609-759-8900. Home page: www.sycamorevc.com

Venture capital with $500 million under management, for second stage

companies through IPO.

08542. Dominick B. Turiano, general partner. 609-430-8422; fax,

609-430-1711.

E-mail: domt@vmsgroup.com. Home page: www.vmsgroup.com.

Venture management services with three venture capital funds has

raised

$350 million since 1992 and invested in more than 60 companies in

the Internet and communications industries. Limited partners include

Lucent and AT&T.

505-C, Princeton 08542. James R. Utaski, partner. 609-806-0002; fax,

609-806-0004. Home page: www.whitestonecapital.com. Seed

and expansion stage private equity.

Technical Funding

If you have a technology business, you will be looking

for government grants to develop your technology so that you can limit

your risk. Your best chance at getting "almost free" money

is through the Small Business Innovation Research (SBIR) program.

It is the federal government’s largest R&D grants program targeted

to the small business community, says Randy Harmon, director

of the Technology Commercialization Center, part of the New Jersey

Small Business Development Center (NJSBDC) of Rutgers Graduate School

of Management.

"The odds for the SBIR grants are very good, one in eight for

Phase I and two in five for Phase II," says Harmon. Under Phase

1 you can get up to $100,000 for `proof of concept’ work. For Phase

II, some agencies go up as high as $750,000 for proof of concept and

developing a prototype. A daylong workshop for writing Phase II grants

is Tuesday, February 5, at Rutgers’ Cook College, for $60.

In contrast, Small Business Technology Transfer (STTR) grants cap

at $500,000, but they often work better for academic researchers who

can’t meet the SBIR requirement that the principal investigator spend

at least 50 percent of his or her time on the grant project. STTR

grants require, nevertheless, that 30 percent of the funds must go

for a collaboration with a nonprofit institution.

Randy Harmon at the TCC has monies under a federal and state program

so that the young high-tech business can:

write consultants to help write strong SBIR proposals. "This will

result in stronger business models and business plans for the

companies

that submit proposals and improve the likelihood that the technology

developed under SBIR will be commercialized," Harmon says.

grant. Working from the company level up, the consultant will assess

a company’s technologies and core technical competencies and then

identify federal research programs and laboratories that participate

in SBIR and are interested in these areas. Then the consultant will

help the entrepreneur contact the research program.

Working from the government agency "down," the consultant

will try to match any future SBIR grant solicitations with the

technologies

and capabilities of firms registered in this state.

Top Of Page
8. Keep Books, Hire a CPA

Early on, Margery S. Davidson, a CPA and owner of

Aberdeen-based

Business Development Team, a consulting business, began to detect

a common thread among those who own businesses. "There so much

they don’t know," she says. "Simple things, like how to keep

books, and what things are tax deductible." She found herself

spending a great deal of time providing tutorials, and then decided

to build a business around teaching accounting basics to new business

owners. Among the most important issues:

of the time it doesn’t even have to do with financials," she says.

"Most times it doesn’t work out because people go into

partnerships."

Whether it’s a spouse, a friend, or a stranger, inviting someone to

share your business dream can be a disaster. The problem, she says,

is simple, and oh-so-human: "I want to take it one way, and you

want to take it another."

Asked how her business has avoided the pitfalls of partnership, she

reveals the second key: "There’s one boss, and that’s me."

Just one person can be in charge, she says. The job can rotate, with

each partner taking the helm for six months or a year, but for each

time period only one person should be making decisions for the

business.

business

opens, its owner is working 12-hour days. That, Davidson says, is

no time to learn accounting. By contrast, "new business owners

have more time than money," she says, and need to be spending

some of that time on learning bookkeeping basics. Having seen her

fair share of shoe boxes crammed with a melange of receipts, bills,

and canceled checks, Davidson observes that total ignorance of the

financial side of running a business is rampant. The shoe box

non-filing

system costs all business owners big, she says, particularly at tax

time.

Bookkeeping is especially important for businesses with seasonal dips.

By writing down all expenses in categories and keeping track of what

checks come in when "they can know a bad season is coming,"

Davidson says. Keeping track of financials will also allow busy

entrepreneurs

to see if their businesses are growing from year to year, and by how

much.

business

owners do their own bookkeeping in the beginning, and outsource it

as they reach that busy three to five year mark.

flow grows to a point where there is enough for support staff, it

is time to bring accounting back in-house. Even then, however, she

urges business owners to retain control over bookkeeping functions.

The bookkeeper should not have access to all the company’s funds,

she says, but only to the amount that is required for the month’s

operating expenses.

into the business, thinking `I’ll take what’s left over.’ Bad idea

on a couple of counts, Davidson says. "What’s left over is

profit,"

she says. "That is what you use when you want to buy a new

computer."

Business owners who do not write themselves a paycheck often end up

resenting their company, she says. "Pay yourself, even if it’s

only $25," she says. "It feels so good to get a paycheck."

Top Of Page
9. Choose a Lawyer

What you pay in legal fees depends on whether you

structure

your company as a sole proprietorship, partnership, or corporation.

There are tax advantages to each. Consider the type of business you

have, how you will distribute profits, what capital you need, what

liabilities you will have, how many workers you will have, and how

long you expect to operate the business.

In the l980s, many small firms were swept into the prestige of

incorporating

their companies, which added substantial set-up and bookkeeping fees,

and in the end afforded little in the way of practical tax or

liability

protection.

will be minimal.

and loss, how they will pay salaries, how they will resolve disputes,

who has the authority to spend funds, and who would get what when

the business is sold.

A General Partnership is useful in solving disputes but you are

responsible

for your partner’s business actions. You must file an Assumed Name

Certificate with clerk of the counties in which your partnership

conducts

business.

A Limited Partnership requires filing certificates and affidavits

with the Department of State and publishing a Notice of Formation

in newspapers.

largest

attorney fees. Whoever owns the most stock controls the corporation.

Decisions made by a board of directors must be recorded, and officers

are liable to stockholders. For a regular corporation, file a

certificate

of corporation with the Department of State. For a Limited Liability

Corporation (LLC), file Articles of Organization.

Top Of Page
10. Find a Mentor

You will need somebody you can talk to. Find a business

mentor, preferably not a direct competitor. "Those words of wisdom

will carry you through many hard times," say Spiewak.

Top Of Page
SCORE

S.C.O.R.E., the Service Corps of Retired Executives, offers free

counseling

to small business owners, and to those considering starting a small

business. In the greater Princeton area, S.C.O.R.E. works from the

offices of the Chamber of Commerce of the Princeton area

(609-520-1776).

A national organization, S.C.O.R.E. is a resource partner with the

Small Business Administration.

Extended mentoring is available, but those who prefer a quicker answer

to a problem can now visit S.C.O.R.E.’s website (www.score.org)

and pose questions by E-mail. Counselors in most states, including

New Jersey, provide personal answers.

Top Of Page
Entrepreneur’s Groups

West Lafayette Street, Trenton 08608. Greg Williams, president.

609-883-2424;

fax, 609-278-9500.

Networking and support group for small business owners and operators,

formerly Mercer County Black Business Association.

Avenue, Suite 312, Verona 07044-1399. John Sarno, executive director.

609-393-7100; fax, 973-239-0904. Home page: www.eanj.org

A nonprofit that provides employee relations services including salary

and wage benchmark data.

Westfield

07090. Jeff Milanette, president. 908-789-3424; fax, 908-789-9761.

Home page: www.njef.org

Assistance in formation and growth of young technology-based

enterprises

in the state, meeting second Thursdays, 6 p.m., at McAteers, September

to June.

Road East, Suite 4200, Princeton 08540. Robert Frawley, president.

609-279-0010 and 609-987-6656; fax, 609-987-6651. Home page:

www.njen.com

For entrepreneurs, angels, and venture capitalists, monthly meetings

on first Wednesdays, September through June at the Doral.

Helene Mazur, facilitator. 609-924-9399; fax, 609-924-9533.

Structured networking for leads, and referrals, usually every other

Thursday at 8 a.m. at the Hyatt.

111 Washington Street, Newark 07102. Sharon Gifford. 973-353-1646;

fax, 973-353-1233.

Suite A c/o Center for Applied Psychology, Piscataway 08854-8067.

David Niemeyer, director. 732-445-7504; fax, 732-445-7970. Home

page: www.rci.rutgers.edu/ngsapp/center/family.htm

Top Of Page
Women’s Networking Groups

Prospect

Avenue, Princeton 08540. 609-921-7458; fax, 609-258-2158. E-mail:

giordmaine@att.net.

Meets second Tuesdays at Stark & Stark, Lenox Drive.

E-mail: princeton@cjwn.org. Home page: www.cjwn.org

Member of the National Association for Female Executives, meetings

at Holiday Inn in Princeton and Cherry Hill.

07424. Marguerite Schaffer, president 2001. 973-812-7272; fax,

973-812-0124.

E-mail: execwomennj@aol.com. Home page: www.ewnj.org.

Monthly forum for senior level executive members for sharing

information

and business experiences, biennial dinner for graduate scholarship

fund.

www.icrewnj.org

For full-time professionals in commercial real estate and related

fields. Monthly meetings usually on Thursday. Call for time.

City Road, Trenton 08638. 609-771-0525; fax, 609-406-9255. Home

page: www.jlgp.

Women’s organization committed to voluntarism and leadership of

trained

volunteers.

E-mail: njawbo@njawbo.org. Home page: www.njawbo.org

www.ywcaprinceton.org.

Meetings on second Fridays at 11:45 a.m. at the Princeton YWCA.

5218, Princeton 08543-5218. 609-683-1023; E-mail: njswep@dechert.com.

Blvd., Apt. 123, Mercerville 08619. Lorraine Rose, president.

609-586-8187;

fax, 908-281-7745. E-mail: MotherCute4@home.com.

Professional and business women working worldwide to promote causes

that benefit women and children.

Trenton 08638. 609-895-5775; fax, 609-896-5366. E-mail:

nawrocik@rider.edu. Education and support for women fundraising

professionals, annual

dues $25.

22, Third Floor, Union 07083. Judi Dill, director. 888-675-2678; fax,

908-686-9120. E-mail: Jdill@waort.org. Home page:

www.waort.org

Support for worldwide vocational education and technical training

centers — advocacy for Jewish community values.

Top Of Page
Chambers of Commerce

Rockingham Row, Princeton Forrestal Village, Box 431, Princeton 08542.

609-520-1776; fax, 609-520-9107. Home page:

www.princetonchamber.org.

West State Street, Trenton 08608. Cathy Frank White, president/CEO.

609-393-4143; fax, 609-393-1032. Home page:

www.mercerchamber.org.

87, Hightstown 08520. Patricia Lee, chamber administrator.

609-448-4412;

fax, 609-448-1672.

Home page: www.mcrcc.org.

West State Street, Box 230, Trenton 08602. Joseph Gonzalez, president.

609-393-7707; fax, 609-989-7371. Home page: www.njbia.org.

Business advocate representing over 16,000 New Jersey companies.

Street, Trenton 08608. Joan Verplanck, president. 609-989-7888; fax,

609-989-9696. Home page: www.njchamber.com.

Top Of Page
Technology Groups

Steve Sroczynski, president. 610-718-9810; fax, 610-718-9811. E-mail:

info@getcontactx.com. Home page: www.getcontactx.com. Promotion

of sales, marketing, and contact building for technology-oriented

businesses.

Suite 280, Mt. Laurel 08054. Maxine Ballen, president. 856-787-9700;

fax, 856-787-9800. E-mail: mballen@njtc.org. Home page:

www.NJTC.org.

Statewide group that provides recognition, networking, information,

and services for the state’s technology businesses.

Princeton 08540. Cathryn A. Mitchell, president. 609-921-3322; fax,

609-921-0459. E-mail: cmitchell@millermitchell.com. Nonprofit

technology

in the greater Princeton area.

400 Morris Avenue, Suite 222, Denville 07834. John Daghlian, executive

director. 973-627-5330; fax, 973-627-8410. E-mail: apatrick@rdnj.org.

Home page: www.rdnj.org. Support for continued growth of

technology-based

organizations in the state.

Corrections or additions?

— the web site for U.S. 1 Newspaper in Princeton, New Jersey.