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Banks Have a Lot of Reasons to Reject Your Small Business Loan

For a small business to grow into a big business, it needs a loan unless it has exceptional sales and profit margins. A small business owner has quite a few places where he/she can go with a loan request. Banks seem to be one of their options on most occasions. What these owners might not realize is that banks have recently developed a reputation for rejecting small business loans. It seems that banks are more interested in financing large businesses due to their benefits. A bank can come up with a variety of reasons to reject loan approval for a small business. Some of the common reasons are as under:

Reasons for Banks to Reject Your Small Business Loan

Credit History

One of the barriers between you and the business loan is credit history. When you go to a bank, they look at your personal as well as business credit reports. Some people are under the impression that their personal credit does not affect their business loans. But that’s not always the case. A majority of banks look into both the types of credits. One of the aspects of credit that matter a lot to the banks is credit history. The length of your credit history can affect your loan approval negatively or positively.

The more information banks have at hand to assess your business’ creditworthiness, the easier it is for them to forward you the loan. However, if your business is new and your credit history is short, banks will be unwilling to forward you the desired loan.

Risky Business

You must be aware of the term high-risk business. In fact, lending institutions have created an entire industry for high-risk businesses to help them with loans, credit card payments, etc. A bank can look at a lot of factors to evaluate your business as a high-risk business. Perhaps you belong to an industry that is high-risk per se. Examples of such businesses are companies selling marijuana-based products, online gambling platforms, and casinos, dating services, blockchain-based services, etc. It is imperative to understand that your business’ activities can also make it a high-risk business.

For example, your business might not be a high-risk business per se, but perhaps you have received too many charge-backs on your shipped orders from your customers. In that case, the bank will see you as a risky investment and might eventually reject your loan application.

Cash Flow

As stated earlier, your credit history matters a lot when a bank is to approve your loan request. While having a short credit history increases your chances of rejection, a long credit history isn’t always a savior too. Any financial incidents on your credit history that do not favor your business can force the bank to reject your application. One of the most important considerations is the cash flow of your business. When you have cash flow issues, you are at risk of receiving a “no” from the bank for your loan.

Your cash flow is a measure for the bank to know how easily you return the loan. If you are tight on cash flow, how will you manage the repayments? However, cash flow is one of the controllable factors for you. Find ways to increase your revenues and lower your expenses. Once you have the right balance, you can approach the bank for a loan.

The Debt

A mistake that small business owners often make is trying out too many places for loans. They will avoid going to the bank first but get loans from several other sources in the meantime. Once you have obtained your business funding from other sources, it makes sense to return it in time. Approaching the bank when you already have a lot of debt to pay is not advisable at all. Do keep in mind that the debt you or your business owes affects your credit score as well. In short, the bank does not even have to investigate to know your debt. An overview of your credit report can tell the story.

The Preparation

Sometimes, your business is doing fine, and your credit score is in good shape as well. However, what’s missing is a solid business plan and proper preparation for loan approval. If you haven’t already figured out, banks require you to present a lot of documents with your loan approval request. Here are only some of the documents you will have to present to the bank to get approval for your loan.

  • Income tax returns
  • Existing loan documents
  • Personal financial documents
  • Affiliations and ownership
  • Business lease documents
  • Financial statements of the business

You have to be exceptionally careful when these documents and presenting them to the bank. Any discrepancies can result in loan rejection.

Concentration of Customers

This one might come as a surprise to some, but a lot of banks consider this aspect of your business seriously. You must not forget that loans are banks’ investments. Businesses that approach the banks are their vehicles to multiply their money in the form of interest. If the bank senses that your business does not have the potential to expand, it can reject your loan request. Think of a mom and pop shop in a small town with a small population. If it only serves the people of that town and has no potential to grow further, a rejection is imminent.

In this particular case, even if the business has considerable profit margins, it relies on its regular customers for that. The bank might see it as a returnable loan but not as an investment opportunity.

Conclusion

The good news is that you have a lot of funding options as a small business owner. Today, banks are only one of the many options for you to fund your bank. You don’t necessarily have to apply for loans when you have crowdfunding platforms actively helping small business with their funding needs. If you are seeking a business loan from a bank, that’s fine. However, if the bank does not approve your request, it should not worry you much.

 

Access our network of Angel Investors, Venture Capital or get instantly matched with a Lender. Create a crowd funding campaign or get a business plan by visiting us Funded.com

 

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Best Easy and Small Business Ideas for 2018

A journey of a thousand miles starts with one step. Every international company today was once a small business serving its local community. If you are brave enough to lay the foundation of a small business and stick to your mission tenaciously, you too could be the owner of an international brand tomorrow. Consider yourself lucky for being born in an era in which starting a business is easier than ever. You could literally start and run your business from your bedroom today. The key to success, however, is to be confident, trust your skills, and start your small business with a big vision.

Best Small Business Ideas 2018

A Digital Marketing Agency

It is for you to decide if you want to start a solo marketing agency or have people with you. Online marketing is not as technical as it might seem to some. Email marketing, content marketing, social media marketing, etc. require you to have an understanding of these platforms and the many tools that are used for marketing on these mediums. If you have been active on social media, you probably understand a lot about social media marketing already. However, if you are completely new to the world of internet marketing, you can take advantage of the many affordable digital marketing courses available online.

The best thing about this type of business is that you have an international outreach from day one. Start your professional journey with a proper website that clearly states all the services that you provide. Do not forget to target your local audience with more emphasis.

A Digital Influencer

Influencer can be a vague term when it comes to digital marketing. Influencers can be in many different forms e.g. bloggers, YouTubers, celebrities, sports stars, etc. The good thing is that you can be an influencer even if you are just an ordinary person today. The first thing you have to do is find a segment of the market that interests you. Maybe you like bodybuilding or doing makeup. Once you have decided your niche, create a blog and start writing about that topic. Keep writing quality posts and wait for new subscribers to pour in with time. Once you have enough of them following you on social media, you can turn yourself into an influencer.

Your job as an influencer is to promote certain products to your social media followers. You don’t have to have millions of followers. If your penetration into your audience is deep i.e. a large number of your followers respond to your posts, even a few thousand followers will be perfect for promoting brands. It is not always the size of your followers that matters. What matters more is your penetration into the market. Influencers can be nano, micro, mega, macro, etc.

A Website Designing and Development Company

Website designing and development are also a form of digital marketing but this is where things become technical. You have to learn to code to create websites. Yes, there are other ways to create websites such as learning to use a website builder and designing websites without requiring any coding knowledge, but the control that comes with being a coder can never be experienced when designing with a builder. If you can get in touch with a few people who happen to be website developers like you, starting a website development company should be no big task for you.

If you don’t have any knowledge of website designing but the field intrigues you, there are many ways to learn web development. A lot of online websites now offer you web development courses. In fact, they officially certify you when you complete the course and even send a hard copy to add to your credentials.

A Graphic Designing Company

Graphic designing is different from website designing as you can tell from their names. Website designing is specifically limited to your designing skills to create a website. It is not really “graphic” designing. It requires you to have some knowledge of coding, even if it is basic HTML. On the other hand, you don’t need any coding knowledge to be a graphic designer. As a graphic designer, you help companies design their marketing materials, most important of which is their logo. Every business owner wants their brand to have an identity and a logo plays a crucial role in that.

In addition to logo designing, you will be doing a lot of artistic work to create letterheads, advertisement animations, magazine covers, e-book covers, etc. as a graphic designer.

Professional Online Photographer

A photographer in today’s age is completely different and much more than a photographer from a few decades back. Your market is not limited to marriages, wedding anniversaries, corporate functions etc. Today, you can be a photographer on the internet and sell your pictures to just about anyone. One of the best ways to earn money is to be a photographer for companies to complement their blog posts and enhance their content marketing strategies. You can ask them about the topics on which they are creating content, and then professional photographs that fit the criteria.

You can create a website, add watermarks to your pictures and make previews available so commercial entities can find their desired photos and pay you for them. Many photo galleries are already available on the internet but taking custom orders and then snapping photographs that fit the content can make you unique.

Final Thoughts

You can see that most of these businesses are possible to start right from the comfort of your bedroom. You don’t require a lot of capital to start them. In fact, even a student can start any of these businesses. What matters the most is to stick to your initial plans consistently and patiently. Sudden surges of passion can often make people think of doing big things but such excitement settles down within a few minutes. Do not start a business just for the sake of it. You have to have a vision that motivates you to go keep going even when conditions don’t look their best.

 

Access our network of Angel Investors, Venture Capital or get instantly matched with a Lender. Create a crowd funding campaign or get a business plan by visiting us Funded.com

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Crowdfunding for a Business Is More Than Just Money

In the recent years, startup and small business owners have seen crowdfunding rise tremendously. Today, it is one of the most popular ways for business owners to fund their business operations without having to go to a bank to ask for a conventional loan. Of course, crowdfunding does not stop someone from approaching a bank for a business loan.

However, it only makes sense for someone to plan their roadmap carefully and fulfill all their financial needs with an effective crowdfunding campaign on the right platform. For anyone who believes crowdfunding is just a way to collect funds from many different people, they need to rethink that.

Crowdfunding Is Much More than Just Collecting Money

Much Easier than Traditional Funding

Traditional funding is quite a challenge for entrepreneurs and small business owners. As soon as you are at a point where collecting funds for your business is necessary, you start approaching the wealthy people, angel investors, venture capitalists, banks and other lending institutions for investments. The issue here is that you start at the wide side of the funnel and narrow down your options from there to reach the pointy side of the funnel i.e. finding the right investors. If you are unable to strike a deal with your final option, you will end up wasting all your efforts and time.

On the other hand, crowdfunding is the exact opposite of traditional funding. You start at the pointy end of the funnel, create your crowdfunding campaign and let the right people discover you. Those who find your concept attractive and appealing will invest. You will not have to go door to door to find the right person to invest in your, your business and your idea. This makes crowdfunding much easier than traditional funding.

Better Market Outreach

For you to increase your chances of getting the right investor on your side, you have to be at every venue, seminar and meeting where you think you will get a chance to meet the potential investors. However, you can only do so much in the limited time you have before someone else copies your idea and capitalizes on it. On the other hand, when you pick crowdfunding as a way to fuel your business financially, you don’t have to rely on your efforts and marketing outreach solely. The first step of crowdsourcing is finding the right platform since there are many to choose from.

You have to pick your crowdfunding platform based on its popularity and reliability in the public. In short, you benefit from the market outreach of the platform. If your crowdfunding platform is popular in multiple continents then you can expect your funds to be coming from all those places.

Less Riskier than Traditional Funds

One of the biggest issues with traditional funding, especially venture capital, is that such funding has a lot of risk associated with it. Venture capitalists are people or institutions that are oftentimes more interested in their own financial gain than they are in watching your business grow. Their purpose of investing in your company is to double or triple their investment. For that reason, they will often have very strict regulations associated with their investments. If they have doubts about the success of your idea, they will often try to give you the money as repayable loan – the regulations will still be strict.

If they think your product/service will become a massive success, they will try to throw in permanent royalty deals or attempt to take away as much equity in the business from you as possible.

People who fund your business through crowdfunding might not even ask for any stake in your company. Their contributions can be as small as $5 and they might not even expect anything in return. Sometimes, they can make big investments without asking for a lot of equity. On many occasions, their rewards are as simple as a free sample of the product.

Brings Professionalism Out of You

Just because crowdfunding is less risky than traditional funding does not mean you can be all casual with it. Asking for the world to invest in your concept is serious business and you have to be at your professional best to convince people to invest in you. The first thing you will have to do is come up with a proper business plan. Secondly, you want to have a team of right professionals by your side that people can look at and trust. If the air around your team is negative, people will not invest a single dollar in you. You also have to have a good explanation of where you will be spending the money you collect.

If you have prototypes, bring them to the front. Create videos to showcase your technology. Be sure that your product/service is a solution to an existing problem. Do not create a problem and then fix it with your product. Angel investors often frequent crowdfunding platforms and they have to make sure that they are investing in serious people and business, not a hobby.

Helps You Create a Community of Followers

A lot of investment on crowdfunding websites comes in the form of small contributions. These people are not investors but regular people who like an idea, and want to see it in practical form. They believe your idea can solve one of their issues or maybe make the world a better place. If you can convince them that your idea does either or both of those things, they will actively invest in it. These people are early adopters of your technology/product/service and will also act as word-of-mouth marketers for your brand.

Final Thoughts

It is not a coincidence that crowdfunding has become one of the most popular ways for new businesses and entrepreneurs to support their early growth, marketing and expansion through crowdfunding. They must be seeing some benefits of funding their efforts through crowdsourcing over conventional funding. If you are someone who is considering the same route, the first advice for you would be to choose a platform with trust, reputation and outreach for your crowdfunding campaign.

 

Access our network of Angel Investors, Venture Capital or get instantly matched with a Lender. Create a crowd funding campaign or get a business plan by visiting us Funded.com

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Setting Up A Small Business in 2018 – It’s Not all About How Much Money You Have

When you think of starting a business, the first thing that comes to mind is money/capital. Of course, you need money to start a business, even if it is very little considering the fact how easy it is to start a business in the digital age. However, there could be many other factors that affect a business in today’s digital economy—some you show serious concern to and some you don’t really pay attention to much.

Blockchain Is Affecting All Types of Businesses

One of the biggest concerns for today’s entrepreneurs before they start business is probably blockchain or crypto technology. The world is seeing the rise of crypto technology and how it is being integrated into the existing business ideas. A little more than a couple of years ago, you must have heard the term “bitcoin”. From bitcoin, people still believe that blockchain is all about digital currency i.e. money in the digital world. However, this is far from truth. Blockchain is expected to affect all types of businesses and industries in the world in the coming days.

It is a technology that redefines the security aspect of many businesses in 2018, introduced decentralization in modern business technologies and benefits the end consumers in multiple ways. For example, you could launch a gaming platform where no one needs the existing currencies. You could launch your own platform with your own money today. You don’t really have to start everything from the scratch; instead you could base your currency on the existing blockchain platforms like Ethereum. Through ICOs, you could have investors from around the world invest in your idea. So, blockchain is definitely a consideration for all businesses starting in 2018 and the coming years.

Physical Warehouses Are Not Necessary

A few years ago, only a certain types of business could be called truly online businesses. For businesses where products have to be stored for some time, a complete online presence was not the solution. Entrepreneurs who had such business ideas in mind had to have enough money to have their own warehouses. However, this has also changed quite a bit in the past couple of years. With the idea of drop shipping becoming common with time, it is becoming easier for businessmen to start their own businesses without much investment.

In a drop shipping model, all you have to do is collect orders from customers, forward those orders to the manufacturers or suppliers and have the goods shipped. You only act as a liaison in this particular model because it is the supplier that sends the products directly at the customers’ doorsteps. You will still need an online store with all the products listed for customers to see. However, you don’t need any warehouses because you don’t have to own, buy or store any products. The good thing is that this model now allows drop shippers to offer much more competitive rates so penetrating into the market is easier for them.

Big Data Is the Big Difference

Another technology that has been influencing business decisions and the way businesses operate is big data. While the term “big data” seems that you are referring to just large amounts of data but in reality, you are also referring to the methodologies and technologies that are in use to handle big data. You will be completely wrong to think that traditional software and hardware solutions can deal with big data in any way. Let’s take the example of a bank. A bank could have hundreds of branches located all around the country. In these hundreds of branches, the bank will have hundreds of thousands of customers.

The bank has account information of hundreds of thousands of these customers. In addition to that, the bank is constantly investing in stock and foreign markets, storing and utilizing that information. The same bank handles the data of all micro and macro loans it is forwarding to its customers. It is also storing information about customers through its mobile application to know what customers expect from the mobile website. On all of those hundreds of branches, the bank also has CCTV cameras collecting terabytes of footage on a daily basis.

Do you think all this data goes to waste? No, the data bank collected from banks is utilized in making bank branches securer. Data from mobile devices helps bank refine their mobile application. Data collected through financial softwares helps a bank improve its insurance, loan, mortgage, etc. offerings. It may seem on the surface that big data is a headache for big businesses only, but big data is just as important for small businesses as well. What this mean is that businesses starting in 2018 will have to have a big data approach right from day one.

Internet Security Is the Biggest Threat Now

It is unfortunate that rather than making the world a safer place, the new technology has led to greater internet threats. Cyber attacks are becoming more frequent with time, and much more sophisticated too. In the past few years, cyber attacks on some of the biggest companies of the world, including tech companies have proved that security has to be the major concern for every business—small, mid-scale or large. If you think starting a new business or having a small business gives you any advantage over large ones, here is something you would want to take a look at.

 

More detailed information and useful advice can be found at Funded.com If you need to access our network of angel investors or a business plan for start-up funding visit Funded.com

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Basic Principle of Financing

Poor management is often referred to as the main factor of why businesses fail. Lacking or poorly timed financing is a nearby second. Whether you are a starting up business or expanding your business, adequate capital is important. Yet it is insufficient to essentially have enough financing; understanding and planning are necessary to control it well. These qualities will ensure business owners to avoid mistake like having a wrong type of financing, or underestimating the cost of borrowing money.

Ask yourself this question before inquiring about financing:

  • Do you need more capital or can you work on with your existing cash flow?
  • How do you characterize your need?  Do you need the money because you want to expand? Or as a cushion against risk?
  • How vital is your need? You can get the best terms when you foresee your needs rather than looking for money under pressure.
  • How big is your risk? All businesses suffer from risks and danger, and the level of danger will influence expense and accessible financing plan B.
  • How strong is your management team? Management is the most important element surveyed by money sources.

Possibly most importantly, how does your need for financing mesh with your business plan? If you don’t have a business plan, make writing one your first priority. All capital sources will want to see your plan for the start-up and growth of your business.

Don’t assume all money is similar

There are two types of financing: equity and debt financing. If you are looking for money you should consider your business debt to equity ratio – the difference relatively concerning dollars you’ve borrowed along with dollars you’ve invested in your organization. The harder money masters include invested in the organization, the more it really is for you to entice loan.

If your company has an excessive percentage of equity to debt, you may want to seek debt financing but if your company has a high percentage of debt to equity, experts say you should increase your ownership capital for added funds. In this way you will not be over-leverage to the point of ruining your company’s welfare.

Equity Financing and Venture Capital

Most small scale businesses use limited equity financing but with debt financing, additional equity mostly come from non-professional investors like friends, relatives, employees or customers. However, the most common source of professional equity funding comes from venture capitals. These are institutional risk takers and may be groups of wealthy individuals, government-assisted sources, or major financial institutions. Most specialize in one or a few closely related industries.

Venture capitals are sometimes seen as deep-pocketed financial gurus looking for start-ups in which to invest their money, but they most often prefer three-to-five-year old companies with the potential to become major regional or national concerns and return higher-than-average profits to their shareholders. Venture Capitals earn money by owning equity in the companies it invests in. They generally prefer to influence a business passively, but will react when a business does not perform as expected and may insist on changes in management or strategy. Changing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing.

Debt Financing

Banks, savings and loans, commercial finance companies, and the SBA are some of the sources for debt financing. State and the local government have come up with programs in the recent years to give encouragement to the growth of small business to help increase the economy. Family members, friends, and former associates are all potential sources, especially when capital requirements are smaller.

Banks traditionally have been the major source of small business funding. Their main role has been as a short-term lender offering demand loans, seasonal lines of credit, or single-purpose loans. Banks generally have been unwilling to offer long-term loans to small firms. The SBA guaranteed lending program encourages banks and non-bank lenders to make long-term loans to small firms by decreasing their risk and leveraging the funds they have available. The SBA’s programs have been an integral part of the success stories of thousands of firms nationally.

In addition to equity considerations, investors or lenders mostly require the borrower’s personal guarantees in case of default. This will assure that the borrower has a sufficient personal interest at stake to give attention to the business. For most borrowers this is a burden, but also an obligation.

 
More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com
Copyright 2014 Funded.com LLC

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The secret behind the success of small businesses

The secret behind the success of small businesses

People often think that having a small business is a difficult venture and while this is generally true to some degree, it must be emphasized that there are people who actually think of their small businesses as some sort of their pastime activity. This might be considered as a secret behind the most successful businesses.

The reality is that success of a business is relative to the level of passion of its owner. There are those whom people call “passionpreneurs,” who used their love for some things and transformed this into a small business.

For instance, there are people who love greeting cards who decided to start their own greeting card store. There are also those who love animals, and decided open pet shops to earn from what they like to do. These kinds of ventures hit two birds in one stone – establishing a small business and doing what the things the entrepreneurs love.

Unfortunately, having a passion and transforming it into a viable venture will not be as easy as it sounds. There are things that have to be addressed in order for the small business to become profitable and successful. Here are some things that a prospective entrepreneur will have to think about if he or she decides to turn his or her passion into a small business:

The Product

This is the most important thing that one has to think about when starting a business. For those who love greeting cards, it’s easy to think about the product – the greeting cards themselves.

But what about those who are passionate about other stuff like animals? Will the business sell animals, or offer services for pets? This is perhaps the most important question that a would-be entrepreneur will have to ask his or herself. After all, the product is the most important thing for a small business.

Marketing

Business is about engaging other people to avail of the product or service. And while there may be a handful of people who are also passionate about the idea of animals or greeting cards, there is also a need for the business owner to engage other “less passionate” customers to look into business. This is where marketing comes in, and it asks the question: How will you encourage other people who are not as passionate as you are to pay for your product or service?

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com

 

Copyright2014 Funded.com LLC

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Important Things to Consider Before Starting a Business

Important Things to Consider Before Starting a Business

Profit is considered by many as one of the most important things that drive people to establish business startups. After all, businesses would not be considered as such if they fail to provide their owners with income that could ensure its continuous operations.

Despite its importance, however, people who are thinking about starting their own businesses must think about other things. It must be emphasized that the profit is just one of the many aspects that business owners have to consider before establishing their startups.

Here are some of the things that potential business owners must also think about before committing into something that could make or break a person’s career:

Reasons for establishing a business

People establish businesses because they want to earn a profit. However, there should be other reasons that could support a person’s decision to enter the world of entrepreneurship. It is often said that successful entrepreneurs are those who do not focus much attention on profit, but rather on the fulfillment brought about by the business.

Moreover, a person must also think about the reasons for choosing a particular type of business – would it focus on the field of medicine, or perhaps services that could improve people’s lives? Thinking about these things would ensure that the business would follow a right track to success.

More importantly, the would-be entrepreneur must think about his or her endgame. What is his or her ultimate goal for the business – to expand in the future and head the company until the end of time, or sell it once it’s profitable enough for the partners? Thinking about this also sets the right path for the entire business.

Resources

A person’s drive to establish a business – while an important element when it comes to entrepreneurship – is not enough if the owner wants a successful startup. Aside from the drive and conviction, there are other more tangible things that potential owners must think about before starting a business.

These include financial capital, enough human resources, and even the right amount of consumers in a specific target market.

Once these things are determined, the next question must be asked: Where will I get this? This is particularly true when it comes to money. While there are cases when friends or relatives shell out to support a business startup, this is not particularly true for everyone. A good way to solve the problem of having financial support is by looking into potential investors who would be happy to partner with business plans that exhibit promise of success.

 

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com

 

Copyright2013 Funded.com LLC

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Splitting Equity Equally among Founders, Is it the right decision?

Splitting private equity among the founders of small businesses may seem an easy task. After all, it is widely accepted that founders – and even just the pioneers behind a successful business – deserve equal shares in the company’s equity. Or are they? Some experts believe that equally splitting the equity among the founders is not really the best decision that entrepreneurs can have.

Splitting the equity equally seems fair for those involve. Actually, it is. But fairness should not be the only thing that matters when it comes to equity and revenue discussions. There are possible scenarios that founders must think about when discussing about the sharing of equities. Among these scenarios, one expert notes, is the possibility that someone from the group of pioneers would back out and leave the group. Why give him people equal shares of the equity if they will just leave the business after a few months?

The role of the people involved in the business is also crucial. Consider this scenario: Marco has a business idea and he decides to share this to Paul. Later on, the two of them decide to establish a business based on Marco’s idea.

During the establishment phase, Marco and Paul realize that they need money to finance the operations of the business. To solve this, they decide to contact their friend Anna to ask for some capital. Anna agrees to provide money for the business on the condition that she will be considered a “founder” of the business.

The question is, would it be fair to split the equity equally between Marco, Paul and Anna? Paul would definitely agree to the proposal, but it may seem unfair for Marco and Anna.

Marco was the one who had the idea, and it was Anna who provided the capital for the business All Paul did was to agree with the idea and probably help in convincing Anna to fund the business.

Unless Paul did something relevant for the company (such as managing the manpower or using his networks to help in the actual formation of the business), it may seem inappropriate to give him an equal share of the equity.

Founders of small business often have personal relationships prior to the creation of the business. However, entrepreneurship is a professional field, and people should understand that partnership should always be prioritized over personal ties.

Instead of looking into the years of friendship or familial ties, co-founders of the business should look into the professional aspects of the company when they are deciding on equity split.

Some of the factors that should be considered include the business idea, the intellectual property, the capital, time, opportunity cost, and expertise of the person on the industry where the business is a part of.

 

 

 

 

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website. Funded.com

 

Copyright 2016 Funded.com LLC

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Guidelines For Successful Postings

Guidelines For Successful Postings

Rules and Guidelines For Successful Postings

Posting your Funding request is essential part of raising capital as creating your Business Plan. In order for you to get the funding you should be able to catch the eyes of the investors. Here are some tips you can follow to attract Investors and funding providers.

Title. Make your title attractive this is the first section our investors will see. Include the title of your business or invention. Make it enticing and give them something they want to hear and continue reading to your letter.

Posting. Write a short summary of your Business idea or Invention that will catch investor’s attention. Make it 2 to 3 paragraph short and make it concise and simple. Avoid too much information and do not copy and paste your Executive Summary. Your posting is not to be confused with a chat or blog. You are selling you and your business to investors and funding providers to raise capital and any posting that is not about your business is not allowed. Remember, concise and to-the-point.

Attach your Business Plan or Executive Summary. If you are looking for an Angel Investor or Venture Capital make sure you attach your Business Plan don’t wait for the investors to ask your Business Plan. Remember your Business Plan is the eye view of your business/invention.  If you don’t have a Business Plan yet at least upload an executive summary.  (You can use the Free Executive Summary template available upon creating your membership). This will give the investor the immediate reaction that you are serious in getting funds.

Private or Public posting. We have two ways of posting your request either public or private post. If you publically post be aware that everyone who not a member of funded.com will see your postings. While private posting only our registered investors and funding providers can see your funding request.

Avoid Personal Information. Even though we pre-screen funding providers, it is an ever increasingly large group and it is ultimately up to you to protect yourself from anyone saying who they are not and promptly reporting any concerns to us. Therefore we suggest not putting your email or telephone number on a public post. Private postings may not have the traffic like a public posting but is limited to our investor network that is viewing your funding request. Keep in mind that if there are investors that are interested in knowing your business venture they can always email you via funded.com and you will receive an email notification on your personal email if they replied on your posting.

Be patient for responses give some time to our investors to see your request. If you are not getting any responses try to re-write or revised your posting. You may also call us and we can look at your posting and give you tips for success.  Try to be more creative and remember you want to create interest in your business or idea and sometime it takes time for investors and funding providers to notice you, especially the right one that will fund you.

 

 

 

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Are You Ready In Getting Customers This Holiday Season?

imagesLet’s face it! We all know that small businesses have a lot of competition during the holiday season, and your success depends upon a very good marketing plan. Nowadays social media and email marketing are one of the most effective tools you can use to help you stand out from the rest.

Here are some tips that you can follow to get started:

1. Come up with a plan to Help Create Holiday Momentum

Momentum will likely be serious in figuring out whether or not this year’s holiday season will be one really worth organizing for your small business.  Prepare a master plan that maps out the weeks leading up and all the way through the holiday season with particular objectives for each of the big days (Black Friday, Small Business Saturday and Cyber Monday are among the biggest).

2. Consider what exactly your Fans, Followers, and Readers Really Need this Year

If you like your small business to be part of your customers’ holiday plans this season, you’re likely to have to provide content they really value. You can do this year-round; however this is very beneficial throughout the holidays while potential customers are not just busy, but are likewise becoming swamped by content from a number of other businesses dealing with for their interest.

Tell your readers and followers regarding soon to be released holiday campaigns or maybe give a sneak peak at new seasonal items to create excitement and provide them with the exclusive content they need. But make sure to be an investment, and not simply a sales pitch. Give them an item they will use this holiday season— Continue reading “Are You Ready In Getting Customers This Holiday Season?”