A Sample Budget for Your Small Business – 5 Aspects of Cash Planning Too Many Owners Get Wrong

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Not many people are interested in creating a budget for their personal finances, and business owners don’t feel much different about their business finances.

But learning how to create a budget for your small business is crucial for two reasons:

  1. Businesses fail more often due to poor cash management than due to lack of interest in their product or service.
  2. Worrying and wondering about your current and future cash situation will be your biggest source of stress as a business owner. Proactive budgeting minimizes that stress.

Based on my experience, here are the most critical (and most often ignored) elements of a small business budget template:

1. Taxes (or as I usually refer to them…”Blasted Taxes”) – 20% to 35% of Estimated Profits

If you don’t want to be in a constant state of worrying about how much you’re going to owe Uncle Sam at the end of the year, budget your taxes first. If you’ve been in business more than a year you have plenty of information to estimate what you’re going to owe on tax day,  so do yourself a favor and set it aside now instead of scrambling at year end to come up with the money.

I do my books on the first of each month, which means I know exactly how much profit I earned in the previous month…which means I can estimate what the government’s (or, the “blasted government’s”) take is going to be. If you’re wise, you’ll set the blasted government’s money aside in a savings account right then and there. You’ll be angry as you do it, but on April 15th you’ll be glad you did.

2. Refunds – 5% to 15% of Revenue

Like it or not, refunds are part of running a business. As business owners we want to tell ourselves that because a) we offer a great product or service and b) we treat our customers well we won’t have refunds. But of course we do. Sometimes people who shouldn’t buy your product DO buy your product. And once they realize it wasn’t the right product for them, they’re going to ask for a refund.

(By the way – just give it to them. Unless  giving the refund would actually threaten your business’s survival, the money you give back is not worth the anger a person feels when she/he can’t get a refund for a product that doesn’t work for them or just isn’t what they wanted or needed.)

My business’s refund rate (with three years of data to look at), averages about 3% to 5% of revenue. That’s pretty low – my customers usually know whether they’re going to be happy with the purchase. If you’re in an industry where size, color, shape, fit etc matter you might have a higher refund rate.

3. Miscellaneous Items and Waste – 2% to 3% of Revenue

If I added up all the miscellaneous expenses I’ve incurred in three years of small business ownership – including purchases which seemed crucial at the time but turned out to be a total waste – the number would run easily into the tens of thousands.

Now, the better you understand yourself and your business, the less money you’ll lose to this category. But don’t kid yourself – you’re going to spend money every single month in ways that you didn’t anticipate. You might have to buy an employee a new computer. You might have to pay for an employee’s car registration so he can get to work (yes, that kind of thing happens).

Here’s a doosie of an unexpected expense. My friend runs a pest control company with 10 or 15 service trucks. He’s a nice guy and he took his service guys on a trip to a beach house. Then he caught the clowns smoking pot in the basement of the beach house, and of course fired the lot of them on the spot.

Within days he found that someone had drilled holes in the gas tanks of five of his service trucks (which were parked behind a locked gate). Five new gas tanks took $1,500 out of his pocket just like that. Stuff happens, so make room in your budget for it.

4. Advertising and Promotion 10% to 25% of Revenue (and sometimes much higher)

Even if you don’t spend much on marketing, promotion is one I think can sneak up on you. For example, I’ve run promotions with my customers where I offer a $1,000 cash prize along with some other items for some of my most active customers (I have a program where I teach people to make extra income online).

A $1,000 promotion isn’t an enormous expense, but if you run them quarterly (as I was) and tack on a few smaller prizes to go with the grand prize, you end up spending thousands of dollars per year. Spread out over the 12 months, it ends up being a pretty substantial line item in the budget.

I’m not saying this kind of thing will break the bank, but if you don’t plan for it you’re going to be annoyed at the end of the year when you’re working on your profit and loss statement.

5. Your Own Salary

In personal finance you always hear the expression “pay yourself first.” For business owners, I’d add “pay yourself first, or you’re going to be mad all the time, wondering why you bother trying to build this stupid business just to give all your money to your employees and the government.”

When you’re building your first small business budget – make sure you set your own salary at a level where your family will be able to maintain an okay lifestyle. I’m not saying you shouldn’t eat beans and rice while you get things going – that’s part of the joy of starting your own small business. But if you know that it costs you $5,000 per month to live your life, don’t set your own salary at $3,000 just to try to play the hero.

You are the most important employee in the business, so make sure you take care of yourself.

Oh, and by the way – I use personal finance software to do my books. I got it from youneedabudget.com. After taking one look at Quickbooks and wanting to throw up, I started using ynab and I’ve loved it.

Marketing on a Tight Budget: Low Cost Ideas from Real Businesses

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The fact (okay, my opinion) is a high percentage of marketing dollars are wasted.

You’re frustrated – you think your business is at big disadvantage because you don’t have the money to get the word out. It’s hard enough to scrape startup money together in the first place. It’s overwhelming to think about advertising cost on top of everything else.

I’m here to tell you that marketing a small business on a budget is the better way to grow revenue.

Big Ad Spending Seems Like the Holy Grail

I’ve got this friend. Every day a few dozen people buy his software for $60. He’s got a great business on his hands, but like all entrepreneurs he wants it to grow.

A few months back he said to me “There has to be a way for me to work with paid traffic. I’m going to spend the next month figuring out how to drive sales with Adwords.”

“Great idea,” I said, “I bet you’ll figure out how to really make it crank.”

This guy is no slouch. His customers love his product, and his website converts well. I didn’t see any reason he wouldn’t be able to make big revenue gains using paid traffic.

But…Advertising Can Be a Huge Money Pit

Within a day or two he was spending as much as $1500 per day on Adwords. If he kept it up he’d be spending $50,000 per month on advertising. Whoa.

But hey, if the ads generated proportional profits, then gravy right?

Problem is, there were no profits. After thirty days of testing he gave me the post mortem:

  • Roughly $55,000 spent on Adwords.
  • Around 600 new customers (resulting from the advertising).
  • His cost per new customer was around $90.

But wait a minute. Didn’t I say that his product sold for $60? Yes I did. Which means he was losing about $30 on every ad-driven sale. Ouch.

Why did his big budget marketing experiment fail? The market loves his product, and he’s got thousands of customers that prove his website can make the sale.

I acknowledge that my friend isn’t an Adwords pro. If he were a savvier bid manager, he probably could have broken even on the experiment. But no business owner’s goal is to break even, is it?

So what went wrong?

I think it’s simple. Advertising-driven visitors are hard to convert, for a few reasons:

  • Paid marketing is usually interruption marketing. You’re shoving an ad (TV, radio, newspaper, etc) in people’s faces that aren’t looking for your product, let alone your brand.
  • Even when it’s not interruptive (as in the case of Adwords and other search marketing), your ads too often catch people in “shopping around” mode.
  • They’re checking all the different kinds of widgets, comparing prices, looking at reviews, etc. They don’t feel any special affinity for you or your product, and clicking on your (costly) ad is just part of their research process.

Bottom line – paid marketing campaigns don’t involve people who know you. “Well, heck,” you might say, “If I knew enough people personally, I wouldn’t have pay for marketing, now would I?”

Your Customer Relationships are Your Best and Least Costly Marketing

That’s exactly my point. If you want the ultimate in low budget marketing ideas here it is:

Know tons of people, and have tons of people know you.

In other words…

Your relationships are the most potent, least costly marketing tool you could ever use.

The same friend’s business is a perfect example – he doesn’t need big paid marketing plans because he has massive amounts of free marketing from his customers.

This should illustrate the point:

Over the two year period from mid-2009 to mid-2011, my friend’s website actually decreased by about 5%.

His revenue increased by 150%.

Yup.

So how did he do THAT?

I’ll tell you.

He improved his conversion process. Think that’s not related to his marketing? Think again. Marketing is about maximizing the amount of traffic you get (whether you run your business online or offline) AND maximizing the revenue from that traffic.

So it was a costless marketing strategy for my friend when he:

  • began offering a free full-feature seven day trial of his software.
  • created an upgrade incentive for his buyers by letting them buy a copy of the software for a friend or family member for 33% of the retail price – if they bought it during their checkout process.
  • made it much easier for his customers to refer friends and family (by automatically sending them personalized referral links with built-in coupons they could forward on to friends and family).

Those changes to his pricing packaging cost him nothing, but increased his number of sales and the value of each sale. THAT is a solid low budget marketing technique if I’ve ever heard of one.

Even before those referral initiatives he could trace about one in four sales to a customer referral. And one in four actually underestimates the word of mouth factor in his business – if one in four tell you they were referred, you know there were more who were referred but didn’t speak up when asked.

So that begs the question – how does he get such a high percentage of his customers to refer friends and family?

The obvious answer would be a strong product and great support (and he definitely has both).

The less obvious answer is that he’s spent six years establishing a strong culture around his brand:

  • He has a free forum where his users support each other, answer each other’s questions, and generally cheer on his whole business.
  • He gives away a ton of free educational material helping people understand how and why they should his product to the fullest. The better they see the vision of the product, the more value they get from it. The more value they get from it, the more likely they are to tell a friend to buy – and then teach the friend how to use the product!
  • He does a weekly podcast to strengthen his current customers’ feelings about his product, and attract new customers.
  • His business’s Facebook page has thousands of fans.

Every one of those techniques is a) costless, and b) extremely effective in retaining his current customers and attracting new ones.

Long story short, my friend built a business with seven-figure revenue, and nearly all of his marketing is free. Brilliant.

How to Get Money to Start a Small Business

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“I’ve got a killer business idea – I’d be rich if I could just raise the money to get it off the ground.”

Millions have said those words, as will millions more. Some of them are right – if they can get the startup cash they need, their business will take off and they will get wildly rich.

But getting money to start a business isn’t easy. The people with the money – banks, private investors, venture capitalists, etc – didn’t get where they are by writing huge checks to any and every enthusiastic guy or gal who walks through their door.

Getting Seed Money to Start a New Business

Let’s explore two of your options for finding the startup money your business needs to get off the ground:

1. SBA Loans – Borrowing money to start a business is the first idea most of us have. The banks and the government do a lot of great marketing (hype-building) about SBA loans, but the fact is they’re very tough to come by.

When I started the application process for an SBA loan (admittedly I never even filled out the application) I quickly found out that SBA lenders are looking for a very traditional set of criteria before they’ll sign off on the deal.

In other words:

  • Your credit score is a huge factor. The bank reps I spent an hour or so with told me I’d need a credit score upwards of 700 for the underwriters to seriously consider my application.
  • They want you to have collateral. I was asked about the equity in my home as well as any retirement savings or other assets the bank could take if I defaulted on the loan.
  • They like traditional business models. The SBA likes the idea of helping people start restaurants, retail stores, and other “normal” businesses with lots of hard assets that can be liquidated if the business doesn’t pan out and the borrower can’t pay. Needless to say, they weren’t very excited about my web-based business.
  • They LOVE lending to business that are already successful – with plenty of cash flow, customers, accounts receivable. In other words, plenty of cash to secure the cash being borrowed. You know the old saying – banks like lending to people who don’t need loans.

If you don’t meet the majority of these requirements, chances are you’re going to get nowhere with the SBA loan application process. On the other hand, meeting these criteria could make your funding process quick and easy.

Using Private Investors to Get Your Business Start-up Money

2. Private Investors – Private investors are another of the most popular ways to find money to start a business. It seems simple – you find a wealthy person who has cash to burn, give him or her a percentage of your company, and use their cash to launch your new venture.

I’m not saying it can’t work out just like that – in fact, thousands of businesses start each year under those exact circumstances. The problem is most money-hunters are unclear (and pretty naive) about how these deals actually happen.

  • If the business is brand new (as in, no cash flow whatsoever), they’re going to want a majority stake in the company. Money-seeking entrepreneurs bristle at the thought, but the idea that an investor is going to write you a six or seven-figure check for something piddly like 10% or 15% of the company is just silly. You’re risking time and energy. They’re risking their hard-won cash. They’re not going to risk their cash for less than a majority position – unless they’re buying into a proven winner (which you don’t yet have).
  • They will want frequent reports on how things are going. They’ll probably even want a “seat on the board” or something similar so they’ll feel like they have a say in the daily operations. This is another point of confusion for many would-be entrepreneurs. They think the investor is going to write the check, smile, and say, “let me know how it goes!” Wrong. They’re going to be on you like white on rice, making sure they get all their principle back, plus a healthy return.
  • They care about you, but they don’t really care about you. I don’t mean to sound too cynical, but you shouldn’t overestimate the investor’s zeal for you or your business. You might be fortunate enough to find an investor who understands your vision and shares your passion. On the other hand, you might have one that really only cares about his bottom line. Make sure you know which type of investor you’re dealing.

Borrowing and taking on investors are just two of the ways you can raise money to start your business. You might be able to tell I’m not all that excited about either one. Banks are too conservative and investors are effectively bosses.

The best case scenario is that you’d figure out a way to bootstrap and start your business with no money at all. If you could pull it off you’d be much happier in the long run – retaining all the equity and answering to no one but yourself.

How Do I Start a Small Business From Home? What Do I Need to Do?

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So you want to know exactly what you need to do to have a successful small business, huh?

The traditional advice you’ll get on the subject is mostly bland and irrelevant. You’ll hear things like “check with your local business licensing division to find out what permits and licenses are needed for new businesses,” and “write out a detailed business plan.”

Sure, you may do those things eventually, but people who take those kinds of steps first shouldn’t fool themselves into believing they’re making any real progress toward success in business.

You’re asking, “how can I start a small business?” Here’s your answer, in three steps:

  1. Ask people to buy something.
  2. React intelligently to their answer.
  3. Repeat steps one and two until you’ve reached your income goal.

It’s true. You could walk out your front door right now, head over your next door neighbor’s house, knock on the door and say:

“Hey, Jim, how’s it going?”

“Fine, what’s up?”

“Well, Suzie and I are starting a little cake baking and decoration business on the side. I know Jim Jr’s birthday is coming up, and I was wondering if you’d let us do the cake.”

“Hm…well, Mary usually does the kids’ cakes, but she’s pretty busy with work right now. She might like the idea of having somebody take that off her hands. What do you guys think you’d charge?”

“Well, we’re just trying to get things going right now. We expect to charge anywhere from $150 to $200 per cake once we’re more established, but we’d probably only ask you for $30 since you’re helping us get things started.”

“Alright, that doesn’t seem outrageous. Let me talk with Mary and get back with you on that. I appreciate the offer.”

Sure, I get that you might not want to put yourself or your neighbors in a potentially awkward situation by asking them to buy something from you. The principle is still sound. Go three streets over and ask a total stranger if you can bake her kids’ birthday cakes, or her anniversary cake, or whatever.

The point is you will learn everything you need to know about what it really takes to start a successful new business by a) asking people to buy something, and b) reacting intelligently to the answer.

In any situation where an actual “ask” is happening, you’re going to gather four main pieces of information:

  1. Whether the person you’re asking is interested in your product/service.
  2. Why they are or aren’t interested.
  3. Whether they’re willing to buy your product or service (which is very different from being interested, trust me).
  4. Why they are or aren’t willing to buy.

What else could you possibly need to know?

  • If your prospect is interested, gather information about why they’re interested, and use that information in future “ask” situations.
  • If your prospect is NOT interested, gather information about why, adjust your offer accordingly, and try your new offer out on the next person you ask.
  • If your prospect is willing to buy, find out what made them say yes, and use that in your next “ask.”
  • If your prospect isn’t willing to buy (which is the most instructive scenario of all), make sure you understand why they wouldn’t buy and adjust your product, service, or price accordingly.

You might say, “This wouldn’t work for me. My business idea is too complicated. I need a detailed business plan, investors, equipment, and staff.”

You need to simplify. You’re probably trying to get things going with no money, and all those hurdles – business plans, investors, licenses, equipment, etc – are just excuses to delay the work that really matters, which is asking people to buy.

No, I’m not saying you should break the law, risk your own health or safety (or that of your prospective customers). I’m saying start with a very simple business idea and get to work asking people to buy.

Getting yeses and noes – and keeping detailed notes on the reasons for both – is truly the key to starting a successful business. So get to asking!

How to Start up Your Own Small Business with No Money – and Bad Credit

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“I want to start a business, but I have no money.”

I hear you, and you’re not alone. But I can tell you that most of the advice you’ll get on the subject is impractical at best, and dangerous at worst.

See, most people will tell you to explore the traditional options for startup capital:

  • applying for SBA loans
  • raiding your savings and/or 401k
  • borrowing from friends and family
  • finding investors and/or partners

None of these options are in your long term best interest, and I’ll tell you why:

  • You’re not going to qualify for an SBA loan unless you’re starting a very specific type of business, have excellent credit, and collateral. Does that describe you? I didn’t think so!
  • Raiding your savings (if you have any) or your 401k is a big mistake. Having some cash savings on hand does wonders for your outlook and your stress level as you struggle through the startup process. Besides, if you follow my advice you’re not going need to your savings. You’ll see what I mean soon.
  • Borrowing from friends and family? Do I even have to explain why that’s a terrible idea? Best case, you end up with a relative breathing down your neck for his monthly payment. Worst case, you’re the guy nobody wants to sit by at family dinners.
  • Using investors or partners to help fund the business often seems like the best idea. They’re sharing the risk, and there’s something comforting about not being all alone in your first business venture. I’m here to tell you that you should avoid taking money from investors or partners if at all possible.
  • (“Investor” and “partner” are just different words for “boss.” You’re not getting into business to have another boss are you? Not to mention the fact that you’re selling off a big chunk of your business – before it even launches – to someone who most likely doesn’t share your passion and enthusiasm.)

Even if your relationship with your partners or investors is great, I still believe it’s a mistake to take any investment capital (including from a bank).

You’re Better Off Getting a Business Started without Much Money

See, having a bank account full of cash as you get started leads to what I call “the curse of cash,” which is something that afflicts all novice business owners. When you have a full bank account, you make ridiculous decisions about what’s necessary for the business. You’ll buy computers, software, equipment, and furniture you don’t need.

I’ve wasted thousands of dollars on dumb purchases and ideas in my business simply because I had the cash on hand. Starting the business with no money will force you to make decisions more thoughtfully and slowly, which is a great thing when you’re just getting things off the ground.

So, yes, starting up a new small business with no money is going to be tough, but not impossible.

Start a Low-cost Service Business, and Grow Your Operation with Revenue

The simplest way to succeed with a no money startup is a service businesses. I think service businesses are a great way to go for a first-timer – they’re simple and they carry low overhead.

A List of Service Businesses You Can Start with No Money

  • carpet cleaning business
  • lawn mowing and landscaping business
  • cake baking and decorating business
  • window washing business
  • mobile car wash and detailing business
  • dog grooming business
  • dog walking and dog sitting business

Any of these businesses can be started with very little (or no) money. Here’s a quick outline for how you’re going to do it:

1. Instead of borrowing money from friends or family to get your business going, let them be your first customers. For example, let’s say you want to get a carpet cleaning business going. Tell your friends and family about the business you’re trying to start, and tell them you need to get some testimonials to help you get customers. Offer to clean their carpets for free if they’ll rent the necessary equipment. Use the experience with your friends and family to a) get rave reviews of how thorough, careful, and courteous you are and b) to train yourself on the proper technique for cleaning carpet (or whatever other service you’re offering).

2. Using your freshly acquired testimonials, print out fliers outlining your offer, your customer service guarantee, your pricing, and your contact information.

(By the way, the best way to figure out exactly what your offer should be is to call all your competitors, find out exactly what they offer and exactly what they charge. The safest bet is to make a very similar offer with a slightly higher price. Why the higher price? Because you don’t want to get in the habit of being the “cheapest” option. I’d much rather have a person tell me they charge slightly more because they do a better job than have someone say, “we’re the cheapest option around.”)

3. Pick an area of your community and start beating the streets, knocking doors, handing out fliers. Your freshly groomed appearance (hint, hint), your excellent testimonials, and your slightly higher prices will get you our first few jobs. Once you’ve gotten a few people to say “yes,” make arrangements to rent the equipment so you can actually fulfill the jobs you’ve sold.

4. Do a great job, reinvest your profits wisely, market like crazy, and grow a successful business!

So that’s a quick look at how you can start your own business with very little money. Hard work, persistence, and great customer service are the key. Good luck!

Equipment and Business Needs for Starting a Coffee Shop

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Everyone wants to start a coffee shop.  It fits inside that warm and fuzzy image of what ‘mom and pop’ business are supposed to look like.  It seems simple enough – I mean, how hard can it be to sell coffee?  Besides, considering how much a latte costs it simply must be profitable.

But if that is true why do so many fail?

They fail because they didn’t look at the big picture.  The coffee industry demands quality – it can be cutthroat at times with fiascos like Starbucks literally buying out Clover’s new technology, leaving hundreds of well prepared and well capitalized espresso bars with empty hands.

The development of new and continually better espresso machines and auxiliary equipment is like an arms race – and most new coffee shop owners enter the ring unprepared.

Like in every business, a high quality product always wins.

The most successful independent coffee shops aren’t necessarily big, in fact some of them consist of as few as two or three people, often being owned and operated by a father son team, or perhaps a retired couple looking for something to keep them busy.  They do, however, all have one thing in common: they provide customers with extremely high quality – better than Starbucks, better than the competing espresso bar down the street, and better than the customers can get at home.

How Can I Run a Coffee Shop That Provides the Best Coffee?  Can I Afford the Equipment?

Good coffee requires a lot more patience and curiosity than it does expensive equipment.  The willingness to calibrate a grinder again and again, patiently and intuitively will get you a lot closer to pulling fantastic espresso shots than just buying the first $5000 espresso machine that you see.

A manual conical burr grinder, combined with an $800 manual lever espresso machine will give you the equipment you need to make coffee that is as good if not better than any of your competitors.

Do you hear that?  You don’t even need $1,000 and you can serve better coffee than Starbucks.

Quality Wins Every Time

Some of the biggest and most prolific members of the specialty coffee community started out with less equipment than I mentioned above.  What did they have that caused their success?

They had a passion for really good coffee.  They wanted to find new and better ways to make coffee so they could serve customers something even better.  They continued to push the envelope, and as word of mouth carried, they became notorious for their craft.

Only one thing matters when starting a coffee shop.  Do you make the best coffee in town?

8 Ways to Secure Small Business Lending When You Have No Credit or Collateral

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One of the biggest obstacles facing those who want to start their own business is the ability to find funding. Luckily, there are a number of loan options and government programs in place to help small business owners. Secured business loans, unsecured business loans, and the Small Business Administration are all in place with lending programs available for those who need cash to start up or expand their business.

Secured Business Loan

One of the easiest ways for a small business owner to receive funding is through a secured business loan. This loan is easy to get because it often doesn’t require a good credit score or the business to be turning a profit. In order to get funding, the loan is secured by collateral such as property or business accounts receivable. While this loan is a good option for a start up business, it also carries risks in that often the owner’s personal assets are at stake if the business defaults on the loan.

Unsecured Business Loan

An unsecured business loan is another type of small business lending. This loan is typically harder to get than a secured loan, as it requires a good credit score and a profitable business or a viable business plan. It also has the disadvantage of being harder to negotiate than a secured loan. There are often limits to the amount a business can borrow and the length of the term or interest rate. Despite that downside, many small business owners prefer an unsecured loan because it is much less risky than a secured loan.

Small Business Administration

Those who live in the United States will find that there are government agencies and programs in place to assist in small business lending. The Small Business Administration (SBA) is an agency founded specifically to help small businesses. The SBA has a number of loan guarantee programs to aid small businesses in acquiring money through their local banks. The type of loan acquired through the SBA can vary depending on the type and size of the small business. The downside to SBA loans is that there is usually a limit to how much a business can borrow.

The variety of small business lending available means there are a number of options for those looking for small business lending. Secured loans, unsecured loans, and the Small Business Administration all work to provide funding for small businesses.

Secured Business Loans

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Those who are starting a business often need financing. Acquiring a secured business loan is a common way for businesses both new and old to get funding they need to develop and expand their services. These loans are relatively easy to get, especially when compared with their counterparts the unsecured business loans. Knowing the advantages and disadvantages of secured business loans will help the business owner decide if applying for a loan is a prudent choice.

Secured Business Loan Specifics

A secured business loan is often easy to acquire because the business owner must put up assets or collateral in order to acquire the loan. This means the loan is an extremely low risk to the lender. Collateral offered for the loan is usually in the form of property, equipment, inventory, or accounts receivable. These loans are generally a good option for a start up business. Unsecured business loans often demand excellent credit and a profitable business, whereas secure loans enable almost any start up business owner to receive funding.

Advantages of a Secured Business Loan

A secured business loan has several distinct advantages. Secured small business loans allow the business owner to receive funding where it would be otherwise impossible.  They often enable the business owner to negotiate longer terms and larger amounts than they would receive with an unsecured loan. Furthermore, credit is not a big factor in these loans, so those with poor credit have a good chance of getting approved.

Disadvantages of a Secured Business Loan

While it is easy to see why a secured business loan is desirable, the business owner must keep a few things in mind when determining if he or she should apply for the loan. The benefits of the secured loan could quickly sour if the business fails to be profitable or if the loan is defaulted for any reason. Putting up collateral could put the owner’s personal items or the business assets at jeopardy. For this reason, it is essential that the business owner have a solid plan established before applying for the loan. He or she should also have a plan on what to do if the business isn’t succeeding in order to keep the loan from defaulting.

The business owner has a great opportunity with receiving secured business loans. Knowing the pros and cons before applying for a loan can help the small business owner ensure he or she is doing the best thing for their business.

Create Passive Income

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For those who are interested in making money, finding a way to create passive income is the ultimate dream. This involves hard work up front but can generate income each month with little or no long term effort. While there are many ways to create passive income, one of the easiest methods is through the internet. The use of the internet makes it easier than ever for those desiring extra money to earn a passive income.

Affiliate Marketing

One of the most popular methods of creating passive income is through affiliate marketing. With this method, the internet marketer promotes the products of a parent company. This company pays a commission for each sale made through the marketer. This method requires a lot of work up front as it commonly involves creating websites and getting them to rank well, but its payoff can be huge. Most affiliate marketing is done through the use of websites, but marketers can also promote products through mediums such as articles and blogs.

Advertising

Advertising is another way many people make a passive income. This is done when advertising links are put on a website or blog. The website owner is then paid every time someone clicks on the advertisement.  Google Adsense is one of the more popular advertising programs, but there are many companies to choose from. This method is very simple, but it requires a lot of sites in order for it to be lucrative since most ad-clicks don’t generate much revenue. Nevertheless, advertising is a method that requires almost no long-term work and can easily bring in a passive income.

Product Creation

A third way to earn recurring passive income is to create your own product such as an ebook. Some people may be daunted by such a task, but this method really can generate big income. Those who like to write or who have a special passion can share their talent with people through an ebook. Ebooks are often helpful if they share a solution to a problem or tell people how to do something. Once the hard work of writing the book is through, the books can go on to sell indefinitely on an online market.

These methods are just a few of the most popular ways of how to create passive income. Internet marketers will learn that with some hard work up front, they may be able to reap the benefits of their efforts for years to come.

 

Learn Internet Marketing

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Those interested in internet marketing will find that there are many resources available which offer to instruct the beginner. Because there is no one way to approach internet marketing, there are many different teaching methods. Materials are offered both in print and on the web through online tutorials or paid programs. It is easy to get overloaded with the amount of information available, so those wondering how to learn internet marketing should choose one approach and stick with it until it starts yielding rewards.

Free Teaching Methods

There are many free tutorials and information available both online and in print which teach people how to be successful at internet marketing. Marketing beginners can often glean much information by  reading blog posts and participating in forums. Because this information is free, often it is piece-meal or won’t be as comprehensive as a paid tutorial, nevertheless it is a definite way to learn about internet marketing.

Paid Internet Marketing Courses

For those who want the benefit of in-depth instruction, there are companies and tutorials available that teach internet marketing for a fee. Often these places come with one-on-one coaching and personal interaction. Although there is a charge for these programs, they often offer a much better chance for success as they are usually taught by people who themselves have been able to make a viable income online. These people or programs can give insightful advice on how to learn internet marketing strategies. This is ideal for the person who is a complete beginner in the internet marketing world.

The Key To Success

The key to succeeding in internet marketing is to find one method and focus on it. Rather than one right or wrong way, there are a variety of methods through which a person can earn money online, but all require dedication.  The budding marketer needs to realize that internet marketing is not a get rich quick scheme. Lots of time, effort and dedication is required in order to make money online. Aspiring internet marketers should start small and find one method to follow, and then after they are making money with that method they can expand to learn and practice something new.

The multitude of information available means that there is something for everyone who wishes to learn internet marketing. By picking a method and giving it focus and dedication, even the inexperienced marketer can start to make money online.