How to raise money for a startup business?

Once you determine the amount of start-up financing you need, create a list of funding sources and start knocking on doors. Business capital can be raised by bringing aboard business partners or equity investors, securing business and personal loans and lines of credit, or tapping into personal finances. When raising business capital, be prepared to provide potential business investors with a solid written business plan, a strong 15-minute presentation of the business idea, realistic financial projections, and assets and guarantees that may be available if security is required.

 

Apply for a traditional bank loan from a local bank. A start-up business with no financial history should be prepared to discuss the business plan and financial projections in detail, explaining all market assumptions, and offer security in the form of a guarantee or security interest in an asset. The guarantee can be a personal guarantee from the business owner or SBA (Small Business Administration) guaranteed loan programs. The former can include a guarantee of up to 80 percent of the principle loan amount. For a business with low start-up costs, a micro-loan may be the answer to financing the new business venture.

 

Find a business partner with the financial resources to contribute a substantial amount of the business start-up costs. In addition to being a source of income, obtaining a business partner allows for sharing business risk. However, an entrepreneur must also share business decision-making power and profits, so choose a business partner carefully.

 

Obtain a loan from a venture capitalist (VC). The cost of financing a VC investment will likely be more costly than securing a conventional loan. Business equity will be sacrificed to the VC, whether a private or an institutional investor. Unlike a business partner, a VC will not take part in daily business decision-making.

 

Solicit public funding through a direct public offering. Offering shares in the company provide start-up capital, but it also creates shareholder accountability. However, being among the first equity investors can be a selling point in raising capital for the business enterprise.

 

Finance the company with personal assets, which can include personal savings or the business owners 401(k) retirement account. Remember that there may be tax considerations when tapping into a 401(k) plan. The business owner may also consider liquidating other personal assets to fund the business venture. The positive side to personally financing a business is that it avoids interest to others, allowing the entrepreneur to benefit from all of the business profits.

 

Apply for a business grant. Depending on the type of start-up entity, a business grant may be available from the state or federal government. Business grants are often available to business sectors that the government seeks to encourage, such as those entering certain segments of the agricultural industry.

 

Tips & Warnings

 

Follow up on all business finance leads, which includes sending professional thank you correspondence to people you approached about financing.

Have professional business cards, letterhead, and envelopes printed for business networking and correspondence.

Remember that a personal guarantee means that if the business fails to repay the loan, the owner is personally liable for the loan amount.

 

Why You Should Have Your Own Business Website

Creating a website is crucial to your home business success and your efforts to make money online, regardless of what home business method you decide to go with. In fact, aside from determination and will, your own website(s) is the single most important factor to your success.

With the advancement in web programming, you can easily create a working website using many of the free website generators or software. We will explain how to get started building your website in a minute. First, let’s review some of the benefits of having your own website.

One of the biggest hurdles a home business company has is reputation and trust. Why should anyone trust you with their money, especially when there are much bigger more reputable companies around? With online shopping, internet users can easily go to websites like Walmart.com and buy almost anything they could possibly need. Having a professional looking website is one way that you can combat the “big guys”. A website is your chance to talk to the customer without the customer feeling pressured.

On a side note, did you know that over 95% of all Internet users use the internet to search information only? Your website should be designed to educate the customer on your product or business. Tell them everything they could possibly want to know in an informative and non-pushy manner and you will not only fulfill their need of more information but, you will also gain some credibility in the customer’s eyes. If they see you as an expert in your field or product, they will be more likely to buy from you. In addition to creating a “professional” impression of your home business, a website allows you to generate extra income with little to no effort. Affiliate marketing is a good example of how any business can make extra cash just by having a website.

Let’s look at an example. Bob Shoemaker in PA started his own business as a personal finance consultant. He traveled around to his friends, families, and referrals assisting with debt management and retirement planning. He built a website so that his potential clients could get more information after his sales pitch (if they were still uncertain). His potential clients would use the business card he gave them, log on to his website and further educate themselves about personal finance. Why should they use his services? What other options could the look into? What about credit card debt? Bob was able to answer all of these questions and more without pressuring the client. Even if the potential client did not hire Bob as their finance consultant, Bob knew they were still in the market for something.

The fact that they were visiting his website proved their interests in personal finance. He then added affiliate links on his site that linked to credit card and debt consolidation companies. By including these affiliates, Bob was able to get up to $20.00 per client that signed up with each one of his affiliates links. If Bob ended up losing a potential client (they did not want his services) at least he was able to make some money of the person. In the end, Bob was earning half of his income from personal consulting and the other half from his affiliate campaign.

So the crux is that having a business website of your own is not very difficult. It just requires a basic knowledge of computers and can bring out some very decent results to your earning potentials.

How To Work At Home On The Internet

Owning a computer and having an internet connection can provide you with the opportunity to earn money from online work at home. Faced with expensive computation costs and dwindling paychecks, many people are turning to work online at home to meet expenses.

You can set your own schedule, plan your job as you see fit, and almost write your own paycheck when you work online at home. Providing services, putting websites together, and selling affiliate products are some of the many ways to work at home over the Internet.

If you are you a skilled writer or have a graphic design or programming background, why not try to offer online services for a regular profit? As a freelancer working online, you are able to decide your own rates, choose preferred clients, and market your services the way you really want to. Doing freelance work online at home may not be too difficult, particularly if you have a portfolio of your work. One thing you can do to get started is to build a website or create a blog describing your services, then get involved on various forums where you can direct others to your website or blog. If you prefer, you can utilize one of the many bidding sites for freelancers, which would permit you to limit the workflow.

If you don’t have training in design or programming but are still be able to pitch products effectively, you should look into affiliate marketing. Affiliate marketing means that you’ll be creating websites to promote the products of another company or individual. This is one of the most popular ways to work at home online.

Many people earn good incomes and have successful careers as marketers. A benefit of affiliate marketing is the ability to generate a passive income. Work performed today will continue to earn money over a long period of time and allow you to work at home online on other income producing projects.

If you possess the ability to build a website, you will be in high demand. Many people who choose to work online from home create websites that they can then sell for a profit. Search the Internet for “site flipping” or “virtual real estate” if building websites are something you enjoy doing. You may be able to find success in doing something that you love.

Each day, many more people are opting to work at home online rather than having to deal with the traditional nine to five job. You may be a bit cautious at first but with a bit of effort, working at home online allows for greater freedom in terms of your time and a greater potential for more income.

You might prefer to save money while you do some research options, and after testing the waters successfully you are ready to leave your old job for the challenge and rewards of your own online work at home business.

10 Questions You Must Ask Before Investing In A Home Based Business

If you are in the market for a home based business, listen closely. There are business systems out there that are little more than a glorification of their owner. Self-proclaimed “gurus” selling dreams that once purchased, leave the buyer in a lurch. My advice to you is to ask plenty of questions and get as much training as possible from free online workshops. I’ve outlined 10 questions you should ask before investing in any home business. As they say, “Buyer, beware!”

1. What is the nature of the company?

Forget the phrase “home based.” Business is business and if you don’t do your homework and ask tough questions you increase your chances of taking too large a risk. One of the primary causes of business failure is simply not being knowledgeable in your own business. Make sure you know the full nature of any business you invest in.

2. How long have they been in existence?

Business ventures come and go. Many home based scams die out only to reinvent themselves under another name. Find out exactly how long they have been doing business under said name. The research will reveal whether the same owner has been involved in any unscrupulous or failed businesses previously.

3. What kind of products are they selling?

Are the products something you can believe in and use? It’s hard to be committed to something if you don’t believe in it. It is just as hard to sell something if you don’t use it yourself. Using your own products is the best testimony of those products.

4. How will this business satisfy your wants and needs?

Will this business provide the financial support that you need and desire? Will your personal life have to suffer in order to be successful with this business? If answer “yes” to either of those questions, you should not invest your money or time. Home based business should provide the monitor support you require as well as fulfill that aching desire to be an entrepreneur.

5. What is the compensation plan?

How quickly will you be able to see financial results from this business? How often do payments go out and is this system dependable? Be wary of “overnight success” stories. Any business venture that claims overnight success is probably a scam waiting to happen.

Always stick to the old adage “if it seems too good to be true, it probably is.” Steady income is a life requirement. That is what you should be looking for in any home based business.

6. Are their ideas something you could support?

What is the Mission Statement of this business? If you don’t feel comfortable with a business it will be hard to maintain the desire and commitment that are needed for success. Your home based business must be something you can proudly display as a reliable business solution.

7. Could you see yourself working at this?

The right mixture of vision and passion is absolutely necessary. If you can’t imagine yourself working at this wholeheartedly, then this business isn’t for you. Just like brick-and-mortar businesses, online businesses require daily upkeep and dedication from their owner. If you are unwilling to put in the time, you are setting yourself up for failure.

8. How is the system laid out? Is the system easy to understand or complicated?

Are you at ease with the layout? If the business plan is too difficult for you to understand, ask questions. The inability to understand the business plan could potentially mean there is a scam waiting to jump out at you later. If, for any reason, you are uncomfortable with the look of the business plan or information flow, back out. Before you invest your money, you have no vested interest in the business.

9. Have you heard anything good or bad about them?

Be sure to do plenty of research on the company. Ensure they off a good free online training workshop. Check with the business bureau in the city where they are located. Search the Internet for any reviews or gossip. Ask friends and colleagues if they’ve heard of the company. Thorough research and follow-up questions on any negative rumors could save you a lot of time and money.

10. Are they heavily marketed at the moment?

How many marketers are working in this business? The downfall of many home-based businesses has been over-saturation. Too many people working the same business spreads it too thin to allow it the opportunity to be your only business venture. You may quickly find yourself looking to add to your business portfolio.

For an honest look at what’s working in home-based businesses, go to someone who is already doing it. Seek out someone who is right there in the trenches, making it happen. The fact is, you can have the business and life that you’ve always dreamed about.