Finance

Think Outside the Box to Secure Funding For Your Small Business

/ nancyrubin

Once you have a great idea to start a new small business or expand one that already exists, the next all-important step in the process is to secure funding for it. After all, without financial resources, the business you envision stays trapped in your imagination. Try these approaches to getting the funding you need.

1.  Approach Family Members

A 2016 survey from Bank of America polled 1,000 entrepreneurs in the United States and found over one-third received funding from friends or family members via loans or gifts. You might hesitate to ask your parents for help, especially if they assisted with financing your education not long ago, but it could be a smart move if they’re in a position to help you.

Think about asking others who may be able to help too, such as cousins or grandparents. If those people are business owners or fully on board with your efforts, that’s even better.

2. Pawn Your High-End Luxury Items for Quick Cash

An emerging trend shows an increase in wealthy people going to high-end pawn shops and parting with their luxury items in exchange for fast cash flow to make their business ideas become realities.

Maybe you got a Rolex watch as a gift from a late wealthy relative, and it’s collecting dust in a drawer because you only wear it once a year. If the person who gave it to you always urged you to follow your dreams, you could take that as encouragement to pawn the watch for cash.

Or, maybe you’ve inherited a rare fine art piece that’s undoubtedly beautiful and high-quality but doesn’t match the décor in your home.

These examples show that even if you don’t have a house full of expensive possessions, a few well-chosen ones could help you bring in money quickly. That could be important if, for example, you’re trying to close on a deal for property related to your business and don’t have time to go through the processes required for slower funding methods.

3. Collect the Necessary Documents for a Bank Loan

If you’re an entrepreneur who prefers to fly by the seat of your pants when seeking funding, that approach, unfortunately, won’t work when applying for a loan from a bank. Financial institutions require specific things from you. The representatives there will ask for a polished business plan, a succinct description of how you’ll use the money, your businesses’ financial information and more.

Once you gather those things, organize them neatly in a folder. Then, when it’s time to speak to the loan specialist and make a good impression, you won’t feel or appear flustered.

Even if you don’t think now is the right time to apply for a loan, get all those documents together anyway. Then, when or if you’re ready, you won’t have to scramble around looking for them as your stress level rises.

4. Use Data to Prove Your Point

When approaching people who may invest in your venture, it’s crucial to back up your claims with data. For example, instead of merely explaining why your business idea will succeed in the marketplace, provide hard statistics that show an existing gap you can fill or some other problem your company addresses.

EducationSuperHighway is a nonprofit organization dedicated to improving internet speeds in K-12 schools so that students can take advantage of digital advancements. It’s working with nearly two dozen state governors and has achieved a reach of 22 million students.

Before it got to this point, though, the group wisely used data to prove that internet connectivity problems existed and even to hold themselves accountable to early investors. In short, if the organization couldn’t show it was doing worthy work through data, they emphasized that investors shouldn’t feel obligated to give them another cent.

Research ways to compile data that convinces potential investors why your idea is different than what already exists and that there’s a genuine need for it. Taking that step strengthens your case rather than making it seem like you have little more than a firmly held opinion.

5. Look for Microgrant Opportunities

Perhaps you’re in a situation where you only need a small amount of funding for your small business that you’ll use for better office furniture or to invest in a printer that doesn’t break down more often than it works.

Those scenarios are excellent for microgrants. As you might realize from the name, they involve community members or professional investors collectively giving small amounts of money to successful candidates.

The Awesome Foundation funded over 3,400 projects and operates in more than 16 countries. Grant recipients get chosen monthly and receive $1,000 for their projects.

A more localized effort in Charlottesville, VA is called Charlottesville SOUP. It provides microgrants for arts-based projects. Past recipients include a graphic novelist and a fashion designer.

Grant candidates stand in front of audience members who have each paid $10 to hear about the projects while eating a soup dinner. The spectators’ entry fees also act as votes. At the end of the night, the funding seeker with the most ballot box dominance immediately receives a crowd-funded amount for their project.

These dinners occur monthly, and the first one was held in January 2013. So far, the initiative has awarded more than $20,000 to people in the community who needed funding for their efforts.

Creativity Could Take You Further Than Expected

You’ve undoubtedly had to use creativity to develop your business idea. So, why shouldn’t you try to ignite that creative spark when looking for funding? When possible, it’s ideal to take a diverse approach by looking for traditional sources of money for your business such as bank loans but also thinking outside the box and exploring the lesser-known opportunities.

Bio: Nathan Sykes is the editor of Finding an Outlet, a source for the latest in IT and business news and trends.

 

 

6 Catastrophic Mistakes An Entrepreneur Can Make In Their Business’ First Year

/ nancyrubin / 1 Comment

What makes a great entrepreneur? There are numerous theories on the subject. Is it their hard work, dedication and commitment? Is it their invention, imagination and ability to think outside the box? Is it their ability to parse metric data and use it to keep their finger on the pulse of what their customers want and need? Or could it be their ability to motivate and rally their employees; helping them to work with gusto towards a shared goal. Ultimately, these are all extremely important but it’s arguable that the most important quality of entrepreneurship is…

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Image by Pixabay

Just start.

There are lots of people out there, right now, slaving away in jobs they despise who have a great idea for a business. They have spotted a gap in the market, devised a concept for a product for a product or service that neatly fills that gap and they have a clear vision in their heads of how that can be extrapolated into a living, breathing, working SME. They may have cobbled together something resembling a business plan in their free time. They’ve had some preliminary thoughts about what their business’ mission statement might be and how it would be reflected in their branding. They might even have crunched some numbers to create a reasonably accurate cash flow forecast. But they never reached the point where they reached out to sources of funding or even registered their business’ name. Why? Because they were paralyzed by their fear of the unknown. This perfectly natural and perfectly human impulse may be understandable but it can keep potentially successful entrepreneurs stuck on the path of wage slavery; languishing away in jobs where they’re underpaid, underappreciated and undervalued when they could be at the head of a thriving enterprise.

By far the most crippling of fears when it comes to starting a business is the fear of failure. After all, the numbers are not on the side of nascent entrepreneurs. We’ve all heard that 50% of SMEs fail within their first four years and we’re paralyzed by the fear of what will happen if we fall within this damning statistic. But here’s the thing…

There’s nothing to fear but fear itself

If you have a fantastic idea for a business that would benefit your local high street, create jobs, fill a gap on the market, benefit the local economy and liberate you from a job you despise, it behooves you to overcome your fear of failure and at least attempt to make your business a reality. Very often, failure in small business is not the end but simply a blip on a long learning curve. At worst, you will be made bankrupt (although this is certainly not an inevitable consequence of failure in small business). But in most cases bankruptcy is not the end of an entrepreneurial career. Some of the most successful people on the planet have been made bankrupt at least once.

That said, failure is never an appealing prospect. If we can forego the expense and emotional turmoil that come with failure in small business, so much the better, right?

Learning from the mistakes of others

The beauty of living in the digital age is that we have unparalleled access to a wealth of information which can give you and your business the inside track. As well as learning from our own mistakes (an inevitable and necessary part of small business) we can benefit from the mistakes of other nascent businesses. While there may be no surefire way of avoiding failure in the world of small business (if there were, everyone would be running their own SME), there are certainly commonly made mistakes that you can sidestep when you plan your operations and strategy around avoiding them. Here we’ll look at some of the commonly made mistakes made by businesses in their first year and how you can prevent your business from replicating them…

Under investing to insulate profit margins

When many entrepreneurs start out, they do so with one goal in mind… turning a profit. So long as the numbers are in the black month or month that means the business is going well, right? Well, not necessarily. As important as it is for small businesses to guard against irresponsible, reckless or vanity spending, it’s also vital that they avoid under investing in their enterprises. Under investment in personnel, capital investments like software or equipment, or maintaining / renovating your premises can impede your business’ growth. Unless you’re prepared to invest in better infrastructure for your small business it will only ever stay small and its scope will be limited. While you should certainly learn to walk before you can run and it can be counterproductive to set out with growth in mind before you know how to facilitate that growth sustainably, you should avoid the temptation to under invest in your business for the sake of insulating your profit margins.

Small businesses need to be agile and adaptable and if you fail to invest adequately, you may fail to capitalize on opportunities that come your way and your competitors will leave you in the dust.

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Image Credit

Dipping into personal funds to finance aspects of the business

Separating personal and business finances can be a real learning curve for nascent entrepreneurs. When you have a lot of passion and personal / emotional investment in your business it only makes sense to put your money where your mouth is… but this can be a serious mistake. Not only should you have separate accounts for your personal and business finances, you should take pains to ensure that one doesn’t bleed into the other. Otherwise you could find yourself on a slippery slope.

Trying to do a grade A job with grade B materials

In your first year of business, the name of the game is reputation. With such a plethora of competition out there, prospective customers need a reason to choose your business and not the legions of others who do exactly the same thing. This means that your reputation must be beyond reproach. While a big part of this is in how your employees deal with customers and the experience that your customers can expect, let’s not forget that you can’t do a grade A job with grade B materials. If you work in the construction industry, for example you know that you wouldn’t compromise on materials or make rush decisions when building the foundations of your project. You’d go to HelitechCCD.com and invest what you had to in materials that are right for the job. Otherwise, the whole thing could come tumbling down and take your reputation with it. Whether you’re in construction, catering or content the principal remains the same.

Spending too much time “at the coalface” and too little time on strategy

Entrepreneurs tend to have a proactive and hard working nature and when they see their employees struggling, their first instinct is to roll up your sleeves and join them at the coalface. But while noble in its intentions, this approach can be counterproductive in a number of ways. It can make your employees dependant on you at best or at worst turn you into the kind of relentless micromanager that employees hate to work for. Moreover, this is rarely the best place for you to invest your time and efforts. As the CEO of your business, your time is better spend in your office, concentrating on the strategic running of your business rather than day to day operations. It’s your responsibility to analyze your performance metrics and use them to influence your operational strategy month by month.

Having a resistant approach to new technology

Technology these days moves at a blistering pace. Investing in your technological infrastructure is rarely cheap and often requires an investment not only of capital but of time and effort as you and your employees get to grips with the software and hardware that your business needs to succeed. Thus, when equilibrium is achieved between a business and its tech, it can be extremely tempting to resist technological change. But technological change is an inevitable part of doing business in the 21st century. You need to maintain an agile approach to tech and be prepared to throw out the rulebook when a technological advancement necessitates an overhaul of your operations. If you resist technological change you could end up a dinosaur in your industry, like Blockbuster video in the age of Netflix. If this involves a prohibitively expensive overhaul of your IT or tech infrastructure, you may wish to consider outsourcing your IT operations. Not only will it insulate you from a lot of the cost of staying current, but your tech solutions can be scaled up as your business grows.

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Image by Flickr

Failing to keep an eye on the competition

As important as it is to stay ahead of the curve, keeping your eyes too closely on your own work can be counterproductive. Your business does not operate in a vacuum and competitor analysis is an essential component of any sound business strategy. If your competitors offer something you don’t, run a promotion that you don’t or offer the same services at a price you can’t match you can’t assume that your customers will remain loyal to you.

Steer clear of these common pitfalls of first year businesses, however, and you stand every chance of laying a firm foundation for success.

 

 

 

 

Starting a Business 101: 4 Steps to Managing Your Company’s Finances

/ nancyrubin

Starting a new business is an exciting endeavor. You may have been planning for years and look forward to utilizing your skills and experience in new ways. Some skills are unique to entrepreneurs, who must be visionary, conservative and strategic, often all at the same time. Managing your business’s money is one of the most important skills, and investing, with the help of someone like RMR Wealth Builders, Inc., should be a part of your financial planning. These four financial tips will help to get a good start.

– Borrow Strategically

Getting capital to start your business can be difficult in the early period. You must demonstrate a good understanding of your own needs, as well as the needs of the marketplace. When borrowing money, shop around for a good interest rate and never borrow more than you will need in the short term. Pay off loans as quickly as possible to ensure that financial institutions will be willing to extend more money when you need them to expand your business.

– Grow Manageably

Learning to plan for the ebb and flow of your business is one of the most critical skills an entrepreneur can develop, and good planning can help to weather financial storms and reach for new business opportunities that come your way. Managing your finances carefully will help you to achieve your goals, regardless of economic changes.

– Review Your Expenses Regularly

During busy periods, you can experience runaway expenses, with a growing need for supplies, equipment, and payroll. Savvy entrepreneurs keep a close watch on expenses, reviewing supply contracts and seeking out better pricing at regular intervals. They may keep payroll expense in line by hiring part-time or temporary help, instead of paying full-time employees that require the additional cost of benefits.

– Invest Carefully

As your business grows and with a little luck, your business will begin to produce high-profit margins that will be significantly in excess of your immediate needs. This is time to carefully consider options for investment to fund your retirement, pay for children’s’ college costs or other goals. A reliable investment firm with fiduciary review program in NJ will have the knowledge and experience to advise you on the best ways to grow your money for the future, while still providing funds for today.

Starting a business can be an all-consuming endeavor, with hidden surprises, both good and bad, along the way. You will be better prepared for the ups and downs of economic cycles if you manage your business in a strategic way that allows for unexpected needs. With these four tips, you will be in a good position to make the most of your business opportunities.

Meghan Belnap is a freelance writer who enjoys spending time with her family. She loves being in the outdoors and exploring new opportunities whenever they arise. Meghan finds happiness in researching new topics that help to expand her horizons. You can often find her buried in a good book or out looking for an adventure. You can connect with her on Facebook right here and Twitter right here.

Expect The Unexpected With Your Business Expenses

/ nancyrubin

When you look at your small business, you probably do so with pride. It’s something that you’ve worked hard for, paid for, grafted for and are caring for as gently as you would a baby. Your business IS your baby, in fact, and when it comes to having children, you learn very quickly how expensive they can be. You don’t have to be financially minded to know how much it costs to keep your small business running smoothly. Increasing your profits isn’t always the easiest thing to do, especially when costs are always shifting, decreasing and increasing without much warning.

Typical expenses for your business are a long list. Inventory, supplies, utilities, rent if you’ve got office space; all of these are for you to keep up with every month and this can be fairly stressful! You don’t have to be in charge of the finances to know about the expenses that your business has, but you should be able to keep up with the unexpected ones as they crop up. There are some less obvious business expenses, and here some of them are below:

  • Building a business takes some time and protecting it as it grows is important. Insurance provides a shield for your business against legal issues and financial scares. As a business, you need to have liability insurance at the very least because you need to safeguard your business as much as possible. If you have drivers on your team, then you will need to insure their business vehicles, too.
  • Most businesses need to think about their permits with the state that their business resides. There are many different permits that a business could need, and you can read about those here.
  • Okay, this shouldn’t be a hidden expense; taxes are a given with a business. However, it is possible that if you’re not on top of your expenses you will need to be visiting alexanderlawfirmllc.com to discuss paying an IRS debt. No one wants their business to owe money, least of all to the IRS.
  • When you’re gathering in supplies for your products to make them, you need to consider the costs of every element and account for the additional business equipment that you’ll be buying. Equipment can also add maintenance costs to your business as you ensure that they are kept up with.
  • Sending out invoices in a timely manner doesn’t always mean that they will be paid in the same way. Within your business, you have to ensure that you plan for invoices to remain unpaid for some time. Your cash flow will depend on customers paying invoices on time and if you don’t consider that they may not pay for service on time, then you could be missing out.

Your business is going to take more than a financial advisor on board to tell you all about the expenses that you will incur. It’s about doing your own research; don’t forget to do so.

 

 

Some Of The Best Ways To Protect Your Business Financially

/ nancyrubin

It’s no great secret that if you want to run a business while and for the long term, you need to make sure that you are protecting it financially as well as you possibly can. Of Course, it can be difficult to do this if you are not sure exactly how, and the truth is that it often takes a prior knowledge, or plenty of research, to ensure that you have a good grasp of what you really need to do. In this article, we are going to take a look at just a few of the things you can do to ensure that you are protecting your business financially as well as you possibly can, and that is something which you should always aim for in the life of any business.

Insurance

You might well have been aware of the fact that insurance can be helpful for a business, but it is almost certain that you haven’t thought of every kind of insurance which might benefit you and your company. There are a number of different kinds of insurance, in fact, which you can think of trying out, and you will find that the more protected you are in this way, the safer you feel on the whole, so it’s worth looking at. Having insurance for your building, contents and everything else of that sort is vital, but you should also think about insuring against potential future losses too. Having Professional Indemnity Insurance – Qdos Contractor or otherwise – can help you to protect your own finances if you are at the receiving end of a claim in which it is claimed you have caused a customer financial loss. Preparing for these kinds of situations is invaluable, and something that you should be aiming to do as early on as possible.

Legality

One of the biggest ways that companies need to pay out is by getting in trouble legally in some manner or another. So in general you will find that it is financially sensible to make sure that you stay out of trouble with the law, and that you don’t do anything which could cause you to have to pay out large amounts. This is easier said than done, and in fact many businesses accidentally get in trouble with the law. But having a legal advisor can be a great way to get around this, as can ensuring that your tax accountant is happy with what you are doing. These preventative measures will ultimately mean that you are much less likely to be in financial trouble in the future, so it’s clearly definitely worth it.

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Source

Assets

You must know your assets if you are to protect your business financially, as knowing where the actual money lies ensures that you can do something about it when you are in a position of struggling. If you don’t really know your assets, you might want to think about looking into whether or not you can list them, as this will ensure that you are in a better financial position overall anyway.

Guide to Running A Location Independent Business

/ nancyrubin

Digitization and job mobility are reducing the number of conventional office-based jobs and giving rise to a dynamic new ecosystem. There is a growing number of location-independent entrepreneurs and digital nomads roaming the world, following their dreams and better lifestyle.  They explore the planet and work from anywhere with an internet connection, be it a deckchair in a beach bar or a hotel lobby. Yet, this kind of life is not without challenges and hurdles. It is certainly not a constant joyride. Here is how to make sure you accomplish your goals and have a smooth ride.

A comprehensive roadmap

Location independence can be an utterly rewarding and fulfilling career path. However, to make it work, you need to plan correctly, well ahead of time. You might be eager to escape the tedious corporate world, but you still need structure and organizing skills. This is to say it is crucial to understand the risks of leading such a life beforehand and create measures to mitigate them. One of the main lessons digital nomads have to learn is that the combination of work and travel is a volatile mix. If you fail to strike a fine balance, it could blow up in your face.

Never out of touch

Furthermore, you do not have a steady workforce to rely on. Most likely, you are sort of a one-person-business. Beyond everything else, this means that success revolves around digital skills you have to offer and your commitment to honing them. At the same time, you have to keep in touch with your clients across communication channels like social media and apps like Skype. Finally, establish fruitful relations with complementary professionals and businesses. For instance, if you are in Australia right now, hire a digital agency from Sydney to carry out stellar online marketing campaigns.

Reaping benefits

Let us now address the fact that operating in a gig global economy has some unique benefits. Namely, mobile and agile businesses are able to save a lot of resources on payroll, benefits, training, and office space. You hire on a freelance basis and outsource to experts that would be too expensive to have as regular staff. You work from wherever you live at the moment. This kind of business is best suited for those entrepreneurs who engage in technology-heavy services. Others could struggle to keep up the pace in a fast-changing and competitive landscape.

Online presence

Ensure you have constant access to the online marketplace and a steady stream of work coming your way. Establish a strong online presence and use the right platforms. Showcase your competencies and expertise.  It is a good idea to put together a portfolio website that includes all your past projects and completed tasks. Additionally, use service providers like Upwork and Freelancer to branch out and land more remote work. Always ask for referrals to bring your network wherever you go. Link an inventory of leads to your website.

Location matters

Know that your dream destination may not be the most realistic target right away. Find something that is on the cheaper side and has a good internet connection. Some of the most popular hubs for digital nomads are Buenos Aires (Argentina), Adelaide (Australia), Cape Town (South Africa), Lisbon (Portugal), Vilnius (Lithuania), and Budapest (Hungary). It is preferable to have the locations close to one another: that way, you can minimize travel expenditures. If you are still in the market research phase and you are not sure where to locate your business, consider renting serviced office like this one in Melbourne. Entrepreneurs who are not keen on hiring remotely should keep an eye on the size and quality of the local talent pool.

Money management

Money keeps businesses afloat and it is the main fuel for your globetrotting business escapade. Going broke during a prolonged work holiday is not an option. Therefore, make an effort to assess living costs in the new area every time. Ballpark figures do not cut it— always come up with accurate calculations of your profits and expenses. Make financial projections and forecasts. Bring six months’ worth of living and operating expenses with you. This will act as an emergency fund. Like it or not, when going around the globe, unexpected situations arise.

Hit the road

Office-based jobs are declining and making way for the new mobile, gig-focused economy. You have a chance to embrace a worldwide lifestyle of freedom and build a profitable business in the process. So, embark on a journey of constant learning and growing, both personally and professionally.  Keep tabs on the online market and stay connected. Commit to growing your customer base and maintain cash flow to support your business endeavors and lifestyle. Take your time figuring out your next suitable location. Research and due diligence can take you far.

Guest Author, Raul Harman, s a B.Sc. in Innovative entrepreneurship and has a lot to say about innovations in all aspects of digital technology and online marketing.  While he’s not enjoying travel, football and great food, you can find him on Technivorz.com.

Starting a Product-Based Business? How to Save Money on Shipping Costs

/ nancyrubin

If you’ve got products you need to ship, you can save a lot of money by doing things the right way. Shipping can be one of the biggest costs of your business so learn how to save money shipping things.

Calculate it Right

Make sure you always calculate the shipping price right. Make sure you charge your customers the right price for shipping so you can get an accurate idea of what you need to ship things the right way. Never offer free shipping unless you’re absolutely sure you won’t lose money on it.

Ship it Yourself

If you think about used trucks from places like Arrow Truck Sales, you can actually save money on shipping. If you have a big business and are selling a lot of products, it might make more sense to ship the products yourself and then have them go to a distribution center. This may not be the best idea for very small companies, but purchasing a used truck can really make a huge difference for the growth of your business.

Consider Shipping Services

There are many shipping services that might help you. Things like Fulfillment by Amazon may help you save money on shipping. You’ll have to pay to ship your products to the center, of course, but you can save money shipping it to your customers. If you’re selling on a platform, always find out if they offer fulfillment services. This is usually the easiest way for you to save money on shipping costs so you can make sure you’re doing everything the right way and doing things that make it easier on your business.

Compare the Prices of Shipping

Always compare the costs of shipping with different companies if you plan on using a shipping company to get your goods out. If you’re going to help people see the things you have and if you’re going to ship directly to everyone, you need to compare your costs. Choose the company that not only has the lowest price but also has the best service for you to try and use.

There are many ways you can get your products to your customers. Think of all the different ways and don’t be afraid to get creative with the ideas for shipping. Always consider all your options and think about combining some of them to help yourself get more from the options you have. It’ll help you treat your customers better while also growing your business.