We SHALL Overcome … Income Disparity

When the Civil Rights Act of 1964 was passed, it became illegal for employers to discriminate based on race; however, income disparities have not flattened out.

According to an article by Ned Resinikoff at http://www.msnbc.com/msnbc/washingtons-silence-the-racial-wealth-gap: “In 1967, with the Civil Rights movement still in full swing and Jim Crow still looming in the rearview mirror, median household income was 43% higher for white, non-Hispanic households than for black households. But things changed dramatically over the next half century, as legal segregation faded into history. By 2011, median white household income was 72% higher than median black household income, according to a Census report from that year.”

The same holds true for women. According to an article on the Institute for Women’s Policy Research (www.iwpr.org): “women are almost half of the workforce. They are the equal, if not main, breadwinner in four out of ten families. They receive more college and graduate degrees than men. Yet, on average, women continue to earn considerably less than men. In 2013, female full-time workers made only 78 cents for every dollar earned by men, a gender wage gap of 22 percent. Women, on average, earn less than men in virtually every single occupation for which there is sufficient earnings data for both men and women to calculate an earnings ratio.”

IWPR tracks the gender wage gapStarting over time in a series of fact sheets updated twice per year. According to their research, if change continues at the same slow pace as it has done for the past fifty years, it will take 44 years—or until 2058—for women to finally reach pay parity.

Not surprisingly, the same holds true for those without a college education, regardless of race or gender.

So if you are a minority, a woman, or uneducated, or if you’ve just had a series of bad breaks, how do you overcome this? By opening and operating a successful small business. If your business offers quality products or services at a competitive price and you effectively target your market and run that business, you SHALL overcome.

Making the decision today to start your own business as we celebrate the birthday of the Reverend Dr. Martin Luther King, Junior, honors his memory and puts you in control of your destiny.

Myth #4: I Can’t Afford to Start a Business

  • Most businesses won’t yield enough return on investment in the first year or two to be your primary means of support. With that caveat your can provide more income than if you do nothing, and, more importantly every journey begins with a first step.
  • If you’re fortunate enough to still be in the work force and reading this prior to losing your job or retiring, let me recommend that you determine right now what type of lifestyle you’d be able to afford if you were no longer employed.  Although this would seem to be common sense, and you probably have already done this, it’s worth the time to do this simple exercise.
  • Income: Add together all of your sources of income.  Be sure to consider:
    1. Social Security: If you’re collecting social security, figure out how much income you can earn before it starts to affect your monthly payment. You can find that information online at www.ssa.gov.
    2. Pension or Retirement: Add to your income any monthly pension or retirement you might be receiving.
    3. Unemployment Benefits: If you’re currently unemployed and receiving unemployment benefits you may have time to get a business launched and grow it quickly enough to support yourself; however, you are required to look for and accept work you are offered.
  • Expenses
    1. Add up your monthly living expenses.
    2. Don’t forget to include the average weekly cost (times four) that you spend on groceries, gas, one-time annual expenses, pet care, etc.
  • Figure Out What Your Need to Earn:
    1. Now subtract your monthly living expenses from your monthly income. Hopefully what results is a positive number, meaning you have more monthly income then expenses.
    2. If that number is negative, perhaps you’ll be able to subsidize your monthly income with interest from your investments or savings.
    3. If you don’t have investment income and find that your expenses are more than your projected income you’ll need to determine how to reduce your expenses or augment your income – or both.
    4. If you’re currently unemployed or already retired, you’ve probably already done the math and know whether or not you’re able to meet your monthly expenses.
    5. If you can’t, you’ve probably already taken at least a part-time job to meet those expenses.
    6. If part of the reason you’re having trouble meeting your monthly expenses is due to credit card or other debt, I recommend you continue working while you pay that down.
    7. Having included all of those caveats, there’s no reason you can’t start your business on a part-time basis now.
  • If you don’t have the $1,000 it will take to start a business:
    1. Remember, that in most cases you don’t need a thousand dollars all at once so figure out how much you really need to get started.
    2. Take a part-time or seasonal job to earn the money.
    3. Write your business plan and go online to one of the crowd-funding sites.
    4. Read the eBay Trader, Virtual Consignment Shop Owner, and Sharer sections and sell or rent out the things you have to raise the money you need.
    5. Consider borrowing money from family or friends with the understanding that the payback might be a long time coming.


Myth #3: Starting a Business is Expensive

  • It doesn’t need to be.  In the book: $1,000 Start-Ups (available on Amazon.com) I’ve provided detailed information for 60 businesses you can start for less than $1,000.
  • For each of these, there’s a list of the estimated start-up costs. This includes everything you need to get started including your licenses, insurance, and the materials you’ll need to produce the product or service you’re going to sell.
  • If it’s a business that sells products, I make the assumption you’ll use the proceeds from your initial sales to buy additional inventory and pay the recurring costs to keep your business running.
  • The businesses I’ve outlined in the book can be started for less than $1,000; however, you can easily spend more than that. It takes discipline and creativity to stick to the budget you commit to in your business plan.
  • For some businesses you will need a computer. If you already have a computer you can use the money elsewhere. If you make the decision to buy an expensive computer rather than buying an inexpensive computer you’ll overspend your budget right out of the gate.
  • For some businesses you’ll need a vehicle capable of moving your merchandise or equipment. If you don’t already have a vehicle capable of doing this, select another business.
  • Prioritize your expenses and manage your cash flow. Yes, you can buy 100 widgets at a time for less than you can buy 10, but if you only sell 10 a month, you’ve just tied up that capital for 10 months.

Myth #2: Growing and Running a Business Takes Long Hours

  • When I look back at the businesses I’ve started and consider the comments made by business owners I talked to while writing this book, one common theme is: most people who open businesses try, often by necessity, to make a living with their business from the start and are driven to spend whatever time it takes to get the business started. That’s not the only approach.
  • This is your business. You can choose how many hours a day or week you put into it.   It doesn’t necessarily hold true that the more hours you put in, the faster it will grow and the sooner you will be making a living from the business.
  • You might be working at another job full-time or part-time. If so, make the decision when and how much time you’ll spend on your new business.
  • One consideration is the amount of time you choose to spend with your friends and family on a daily basis. If your family and friends are busy working through the week and have weekends free, consider a business that allows you to do that as well so you can enjoy activities when they’re available. Starting a business can enhance those relationships because people who are engaged in activities they find interesting are happier and more interesting.
  • Your family obligations are another determining factor. If you’re a caregiver for your parents or another family member, it doesn’t rule out starting your own business, but it may affect the number of hours you work, when you can work, and where you do your work.
  • Keep a journal of your progress. Take a few minutes each time you work at your new business to record the date and time, what you worked on and what you accomplished. At the end of each working session record your next steps.   This simple practice will help focus your efforts.
  • For each of the businesses I’ve included a section entitled: ‘A Day in the Life of’ that lists what you’ll need to do on a routine basis. This can help you to understand the time commitment required to operate this business.

Myth #1: Starting a Business is Hard

None of the steps to starting a business is  ‘hard’. They might require knowledge you don’t have. They might require a skill you’ve never developed, but with the availability of information today, you can learn to do about anything. Surf the Internet, read a book, take a class, and practice until you master the new skill.

You can make it easier by taking the time to develop a business plan that includes every step necessary to start your business.  The more thought and effort you put into it, the more you will be focused and the fewer unpleasant surprises you’ll have as you start your business.

Once you’ve written the plan, assign an order to the steps, estimate the time it’s going to take for each one and make a commitment to yourself for when you’re going to complete that step.

You can gain confidence and learn valuable information by taking a part-time job working in a business that’s similar to the one you want to start. If it’s a small business where you take the position, be upfront with the business owner. If you can determine ways to collaborate rather than compete, you’ll both benefit from the experience.

The myth that starting a business is hard is just that, a myth.