She funded a lot of her expenses with credit cards.

"Thank G.o.d my husband was supportive," she says. "There were many times when I thought this was a stupid idea and I should get a real job, but he made me stick it out."

Ruth said the biggest difference she's seen between successful entrepreneurs and people who fail is how long people stick it out.

"It took three years before I started to make a profit. If I quit after the second year I would've never known that I could make this work."

In five years, Ruth has signed many big names and now has twelve employees.

EDUCATING YOURSELF.

Many of the entrepreneurs we talked to had never gone to business school, worked a spreadsheet, or kept track of accounts receivable. That's right, they didn't know a lot about what they were getting into. The successful ones took a few business cla.s.ses, did tons of market research, and relied on friends and professors for reality checks concerning their ideas.

Sandy used a lot of unconventional methods to research her business. The mother of five decided she wanted to start a yoga studio. She figured out from talking to people at yoga studios across the country that the main pract.i.tioners of yoga are other mothers. She then looked at Little League enrollment statistics to pinpoint the biggest population of mothers in the Fort Lauderdale and Boca Raton area. She looked for a location near other stores that mothers go to, like Starbucks, bookstores, and local restaurants.

"That way, when they're going about their normal routine they'll happen upon us," Sandy says. "One restaurant near us has a line out the door most weekends. While those people are waiting they usually walk around the area and it's a perfect time for them to see we're here."

Sandy also interviewed other businesses to figure out what the down and busy times are, so she could better predict cash flow.

Even with all her careful planning some things didn't go off well. The cash register and credit card machine didn't work for the first week of business. She ended up using a shoe box full of cash until they were fixed. The prenatal yoga cla.s.s failed despite women expressing interest in it. However, the children's yoga cla.s.ses and birthday parties have taken off.

"You can't predict why one thing works and the other doesn't. You have to be observant enough to cut the things that don't work and nurture those that do," Sandy says.

After taking a couple of years off from her psychology practice to stay home with her children, Tina decided to relaunch a failed family business of making and selling relishes. Tina launched her business with the $5,000 she was planning to spend on a family vacation. She used $4,000 of it to convert her home kitchen into commercial grade, and the other $1,000 on supplies. Tina took evening business cla.s.ses for a year to figure out what went wrong the first time around before she dove into the relish business again. She determined that her parents had tried to expand too quickly with new, untested products and too small a financial cushion. So she took a more conservative approach. She based her business out of her home for several years and didn't hire full-time workers until she had enough in reserve to pay their salaries for six months without extra revenue coming in. Her gourmet chutneys are now on shelves regionally. Tina employs five people and plans to go national with her product someday. Her recipes came from her family's failed business.

"I started slow because I didn't want to lose my shirt, but working from home also allowed me to keep in better touch with my children," Tina says.

In addition to taking cla.s.ses, budding entrepreneurs should talk to potential customers and suppliers. Take an informal survey and find out if suppliers would be interested in selling your product, how much they'd pay for it, and if there are any compet.i.tors. Once you find out who your compet.i.tors are, call the ones you're not competing with directly. Ask them about the pitfalls and nuances of the business. Offer to pay them for their time as consultants. Some will take you up on it; others will be glad to share their knowledge for free because finally they've found someone as pa.s.sionate about their profession as they are.

Another good source is trade a.s.sociations. They usually have conducted research on the industry and have directories of companies that you may be competing against. Consult the Gale Encyclopedia of Business and Professional a.s.sociations Gale Encyclopedia of Business and Professional a.s.sociations, the Small Business Sourcebook Small Business Sourcebook, and Business Information Sources Business Information Sources.

You also need to figure out how many potential customers there are in your area and in the country at large. Consult your local economic development authority, possibly the chamber of commerce, which usually has information on population trends, payroll statistics, and income characteristics like utilities. Also, contact the U.S. Census Bureau for the latest national figures and county agencies that track population density and distribution tracts, showing the number of people living in specific areas such as precincts, water districts, and neighborhoods.

FINANCING.

One of the biggest complaints of female entrepreneurs is that they didn't have enough capital. It's important to take your time and investigate all the angles.

During the planning stage, you should consult an accountant familiar with small business issues and your industry in particular. Ask her to figure out when it's realistic to expect you'll generate income, since you might be overly optimistic. Once you figure out how much money you'll need, you can start raising it.

Most money for small businesses is raised from friends and family. Be careful and only borrow from people you know can afford to lose it and are relaxed about it. You don't need a complaining investor on top of everything else you're taking on. Acquaintances rather than friends might be an even better way to go. Ask your accountant and attorney if they know of any clients looking for an investment.

Laura, the children's video entrepreneur, read books and put together a business plan. Then she approached friends and family about making an investment in her business. She made a point to only ask people to invest who wouldn't be devastated if they lost the money. She wouldn't accept money from her parents because she didn't want to tamper with their retirement money. She took friends to lunch and made her pitch. If they showed interest, she gave them the business plan. She raised the money but now regrets the decision to go to outside investors.

"I think I gave away too much of the company for too little money. I was afraid of using my own money, and I wish I did. I'd say to anyone else starting a business, 'Don't be afraid to use your own money,'" Laura says.

To keep costs down, Laura bartered for services and called in every favor she could. She signed up to be in a toy fair. She borrowed furniture for the booth. She asked a printer friend for a favor and got a reduced rate for postcards, which she handed out at the fair.

"Not knowing everything about the industry you start a business in can work to your advantage because you do things differently. I figured out how to do things cheaper and didn't follow traditional rules," Laura says.

She estimates that the videos generate about $100,000 in revenue annually and she's close to paying back the investment made in the company.

The biggest thing she's learned: don't rely on your friends to buy your product. Laura thought she could count on friends and relatives to buy a couple hundred video tapes but many friends and some family a.s.sumed they'd get the videos for free or as gifts.

"They don't think of supporting you in that way. They a.s.sume you'll make it with or without their help so it doesn't matter," Laura says.

The U.S. Office of Economic Development provides financing and information on finding other sources of capital. If your town has high unemployment or low per capita income you may be eligible for a loan because the state is encouraging businesses in your area.

So-called angels and venture capitalists usually want a large percentage of the company in exchange for their money and demand to see evidence of quick and sustained growth in the business plan. These are usually better options for businesses that are established but want to grow. Angels are people who invest in businesses looking for a higher return than they would see in traditional investments, typically provide $200,000 or less, and expect roughly 25 percent annual return on their investment. There are angel organizations that show your business plan to their investors and charge a fee for it. Fees can range from $25 to $2,000. On average they accept three deals for every ten reviewed.

Holly tried the angel investor route when she decided to open her own piroshki shop. The mother of three started making the Russian stuffed pastries when she was a little girl. Judging by everyone's response whenever she made them, she thought she had a quick growth business. Her friends inhaled the delicate layers of phyllo dough wrapped around beef, ham, or apple filling. But investors didn't think the business would soar.

"I had a very detailed business plan. I even cited profits made by piroshki shops in other cities, but they weren't interested in baked goods, they wanted high-tech plans," Holly says.

Though she's out the $100 she paid the angel organization to look at her plan, she doesn't feel the process was a waste.

"Making the presentation forced me to hone my pitch to the point that it became good and succinct. I ended up pitching the plan to local businessmen and two of them gave me money."

Holly went to friends and family for the rest of her needed capital. She didn't have enough to lease the store s.p.a.ce she wanted, so she opened a small piroshki booth on the side of a heavily used commuter road. She operates the booth from 7:00A.M. to 10:00 A.M. After six months of work, she has saved enough money to lease store s.p.a.ce if she wants.

"Now I don't know if I want to open a store. I like the hours at the booth," she says.

You can consider borrowing against your stock or bond portfolio with a margin account. You'll have to pay interest but in some cases a portion of the interest could be tax deductible. It's a good idea to check with a tax advisor to see what applies. Margin accounts are risky. If the market goes against you, your broker can liquidate some or all of your portfolio without contacting you. You'll have no say as to which securities in your account will be sold. Some firms make "house calls," meaning they raise their margin requirements for certain volatile stocks when prices are fluctuating sharply and issue an immediate margin call. To maintain your position, don't borrow against more than 50 percent of your account or monitor the price of the stocks in your margin account daily and keep cash in a checking account so that you can promptly meet a margin call. The Securities and Exchange Commission offers an online calculator to help you estimate the likelihood of a margin call.

Grants are available for nonprofit companies. The Federal Register Federal Register, published weekdays by the federal government, has grant announcements. You can look up the Register Register at the public library. The Small Business Innovation Research Award Program provides grants to technology-related businesses that address the needs of the government. at the public library. The Small Business Innovation Research Award Program provides grants to technology-related businesses that address the needs of the government.

You could also consider a consumer bank loan. Some types of consumer loans are: second mortgage and home equity loans; uncollateralized personal loans; first mortgage refinance; and home equity lines of credit.

You can also sell a.s.sets. Not the most s.e.xy sounding option, but a safe one. Consider selling your car and leasing one instead. Have a garage sale. You could even ask friends and family if they have junk they want to get rid of. They may give you the stuff without asking for money back because they're so happy to get rid of it, or they may ask for a cut.

You can even borrow against a whole life policy. If you've had your whole life policy for three years or more, you probably have some cash value in it. Many companies will let you borrow up to 90 percent of the value of your policy. As long as you continue to pay the premiums, your policy will remain intact. Loans against the cash value of your life insurance have interest, but less than if you take cash advances on your credit card.

Some women fund their companies with credit cards: a risky move that should only be considered by those with a financial safety net who are really good at accounting.

A couple of lawyers bartered their legal knowledge for in-kind services. Some got federal funding through the U.S. Small Business Administration. There are also programs like Count-Me-In for Women's Economic Independence, a loan system that is more female friendly than traditional banks.

Once you get your business running, another way to obtain money is factoring.

When you factor, you sell the money you are owed on receivables to a third party. The factor advances you between 50 and 90 percent of the value of your receivables and then collects the money from your creditors. When the full amount is collected, the factor gives you the remaining 10 to 50 percent, less fees. Fees are in the range of 1 to 5 percent of the amount financed. To find a factor look in the Edwards Directory of American Factors Edwards Directory of American Factors and contact the Commercial Finance a.s.sociation. and contact the Commercial Finance a.s.sociation.

Most women we talked to got creative and made do with much less than they thought they originally needed. They jerry-rigged secondhand furniture and tools or borrowed equipment, worked out of their homes, recruited friends to work for free, and funded their businesses out of operating income. If you're a one-woman operation working from home, your overhead is low. You can make more mistakes and recover quicker than if you have a payroll to make.

Others got free advice at local entrepreneurial training programs, which are often geared toward women. Many women entrepreneurs say that there is a willingness in the female community to share financing secrets.

"Most of us don't see one another as a threat," says Jennifer, owner of Naissance. "I've been there. You're starting out and you don't know if your idea is crazy, if you'll fail."

GETTING STARTED.

All the mothers we talked to said think cheap, low overhead, so that if it doesn't work you can cut your losses quickly. Another mantra is subcontract: You want to contract out all the work you can't do yourself until you can predict your income flow because having to come up with payroll would be stressful. You should think conservatively until you can pay yourself a salary. You might not think you have a lot of extra brainpower after dealing with children all day, but you'd be amazed at how much room there is for trying to do something you love and how resourceful you can be.

Anne Marie, a former saleswoman for a software firm, launched her organic dog treat business as an act of remembrance for her dog. She spent $3,000 for the first three months of operation. She enlisted her sister, an artist, to help design the logo. She snagged her husband to put together a Web site and enlisted her stepdad to write a tribute to her dog to put on the Web site. She joined a nonprofit group for free market research. She hired a neighbor to help her bake the biscuits in preparation for New Hampshire's largest product expo, which put Rodz Pawz on the radar of stores.

The biscuits were an invention of necessity when her beloved dog, Rodney, developed skin rashes so horrible that at one point she covered the dog in salve and put her husband's underwear on Rodney to keep him from scratching.

"It was so traumatic. We spent thousands of dollars on tests for thyroid disorders and autoimmune diseases. We finally found out he was allergic to preservatives and beef by-products in dog food," Anne Marie said.

So that's when she developed her own dog biscuit. She did research on ingredients on the Internet from 9:00 P.M. when her kids went to bed to 2:00 A.M. She averaged about four hours of sleep a night for three months.

She found that garlic has good medicinal properties, oats are good for digestion and provide pota.s.sium and niacin, soy flour provides protein, and milk provides calcium. The mixture also tasted good to Rodney. Her dog loved her biscuits.

He died a couple of years ago. Anne Marie grieved for months, then realized she should do something with her recipe in honor of Rodney.

"I was home with the kids and I felt the need to do something else. I had developed this recipe so I decided to see if I could do something with it," she says.

She approached the New Hampshire Society for the Prevention of Cruelty to Animals and told them she was donating several bags of biscuits to the group. They could sell them and keep the profits. The only thing she asked for in return was feedback on the biscuits.

"Several people have approached the society with requests to sell biscuits through them and they usually say no but they told me they said yes to me because I was offering them for free and because of my enthusiasm," she says.

The experience was invaluable. Anne Marie got feedback on her labels and on problems with the biscuits. They got moldy after two weeks and they were too big for smaller dogs. It was free market research.

So Anne Marie went back to the drawing board. She tried to cook the biscuits longer. They burned. She got a convection oven, the kind that promotes airflow around the whole biscuit. The oven didn't work. She looked into all-natural preservatives like vitamins C and E, but they're not easy for some dogs to digest, so she checked them off her list.

The solution came to her by accident. She left biscuits in her sunroom one bright day and the sun took enough moisture out of the biscuits to preserve them.

"It shows that the solutions to problems aren't always the most expensive or complicated," Anne Marie says.

Jackie launched her skin and body care line over her kitchen stove in between warming bottles for her twins.

"It started out as Christmas presents for my family. I became obsessed with making the right blend. It gave me something else to focus on besides lack of sleep and cranky babies," Jackie said.

"Once I was done making the Christmas gifts, I missed creating the lotions. I decided to make it into a business. I didn't have a lot of money so I had to think conservatively."

She mixed ingredients until she perfected three recipes, contracted a chemist to help her stabilize the formulas (using money loaned to her by her parents), and then subcontracted a manufacturer. She ordered small batches in bottles of only one size to make handling inventory easier. She sold small amounts, usually ten bottles of each of the three types of lotion, to local shops.

She personally checked her stock in each store daily. On a weekly basis, she straightened and changed the look of the displays. She brought in different colors of fabric to put under the lotions and containers to hold them. She kept meticulous notes on which products sold well with what display.

"I was incredibly hands-on the first few years. I constantly fiddled with the in-store displays until I figured out the best presentation. I got to know the shop owners really well. They'd tell me what kinds of things their customers were asking for. It was a cheap form of market research," Jackie said.

Sometimes the stores let her collect the money she earned on a daily basis. She used her earnings to fund her production.

PUBLIC RELATIONS.

One investment Jennifer, owner of Naissance, recommends making early on is paying a good public relations firm to help you get your company's name out there.

TIPS ON HOW TO FIND A GOOD PR FIRM* Figure out what your goals are. What do you want a public relations firm to do for you?* Ask business people you trust for recommendations on agencies they've used.* Check out the Public Relations Society of America Web site, www.prsa.org, for local agencies.* Get five names. Call and ask about their experience in your field and for customer references.* Review the information and pick three agencies to meet with.* In the interviews, see if you're compatible with the people who would manage your account and if they know the industry. Use some buzzwords and see if they know them.* Get a proposal from all three, which should include their understanding of your problem, strategies to tackle it, a timetable and budget.* Once you have all three proposals you can evaluate and negotiate the price range. Costs can vary from a few hundred to a few thousand dollars.* Negotiate a payment plan that you're comfortable with and that has regular monthly charges.* Inform the two agencies you didn't choose about your decision.

The firm Jennifer hired got Naissance a blurb about its thermal T-shirts on a popular Web site, Daily Candy. As a result, the store sold out of its three hundred shirts.

"A good PR firm helps you brand your company and allows you to get your message out there," Jennifer says.

The store's sales have skyrocketed since it opened six years ago. Jennifer Aniston wore its designs when her character was pregnant on Friends Friends and other celebrities are constantly outfitted in Naissance clothes for real pregnancies, thanks to word of mouth, connections to the right stylists, and well-placed articles. and other celebrities are constantly outfitted in Naissance clothes for real pregnancies, thanks to word of mouth, connections to the right stylists, and well-placed articles.

"People told me my designs were too s.e.xy and too young but I trusted my own instinct and it's worked out. That's the biggest thing I would tell people-to trust themselves."

THINGS TO THINK ABOUT WHEN SETTING UP YOUR OWN BUSINESS* Write down the steps involved in creating your product or providing your service from start to finish.* At each step write down the things needed to make the product and list the costs involved with each aspect.* Study this list and try to find creative ways to cut costs, for example, can you barter? Get some things at cost? Make smaller batches?* Talk to other people in the industry but who aren't direct compet.i.tion. Get their advice.

The one time Jennifer didn't trust her own judgment she regretted it. She wanted to do a catalog of her line of clothing, so she hired a catalog consultant to put it together. He recommended that Jennifer hire an expensive photographer, rent warehouse s.p.a.ce, and load up on inventory. Every bit of the advice was wrong.

"We could've used a cheaper photographer, not rented the warehouse, and used the inventory in the store. We spent a lot more than we needed to and carried more inventory than I feel comfortable with," Jennifer says.

But she says mistakes are a good thing as long as you learn from them.

"Fear is good too. It's a driving factor in starting a business. You have to be a risk taker," she says. "When I first started people kept asking me if I had a pro forma. I still don't know exactly what a pro forma is."

WORKING YOUR OWN HOURS.

A huge advantage to working for yourself is setting your own hours. You can get to the kids' soccer games and school plays and still work later that night.

That's what Stacy thought when she started her own photography studio out of her house. She has gained quite a following with the families in her city for taking natural photos of children, the kind of pictures that look like they could almost be really good snapshots.

But the adjustment to at-home work after being in an office is challenging for some. Stacy says the first few months were lonely. Sure, she had her three children to keep her company, but she missed talking to people who could utter more than one syllable and she missed talking to people about the marketing industry.

"You feel like you're under house arrest at first," she says.

The ability to work whenever and as much as she wanted was also a difficult adjustment. In the beginning, Stacy says she didn't manage her time well. Tasks that normally took her an hour to complete would stretch over two or three hours at home. She'd have the television on or she'd get distracted by cleaning the house or entertaining one of her children halfway through the task.

"You have to establish clear boundaries around your work. Now I go into my darkroom and close the door when my youngest daughter takes a nap, and I use a part-time nanny to help care for the kids. But my arrangement isn't perfect," she said.

"Sometimes my daughter wakes up when I'm in the darkroom."

If the nanny isn't there when that happens, Stacy usually tells her daughter to go to her playroom and she'll be there in a minute. She finishes up the photos that are developing and quits for the day.

When she schedules a photo shoot she makes sure the nanny is there to look after her children, though their noisy play can be distracting at times.