business funding Archives - Page 38 of 43

10/14/201406/28/2017

Funding Business Expansion through ‘Private Equity Financing’

Expansions are believed to be the best indicator that businesses are doing good. Unfortunately, while every entrepreneur seems to be of the opinion that bigger businesses are always better, the act of expanding a company is easier said than done.

It is easy to determine if a business is ready for expansion. In fact, there is only one major indicator: there is a bigger demand for the product or the service that the company offers. However, having a bigger demand does not necessarily mean that the business owner can easily whip out a plan on how he will expand his or her business – there is a bit of a problem called money.

A business owner would be lucky if he or she has some savings that can be tapped for a business expansion. This is not generally the case. And while there are a lot of options when it comes to financing a business expansion – angel investors, bank loans and support from venture capitalists – there is one option that has started to get attention of business owners over the years: public equity financing.

As the name implies, private equity financing means that an investor would be invited to put his or her money in a business in exchange for a partial ownership of the company.

This in itself would make a lot of entrepreneurs turn around and look for other ways to finance their business. A lot, of course, would not want to hand over the reins of the company that they built to another person in exchange of financing a business expansion.

But looking at it clearly, public equity financing is not as bad as it sounds. For one, agreements between the parties will still have to be forged – meaning one does not necessarily have to hand over the control of the business to the investor as the original owner have an option to retain the majority of the company, thereby putting him or her in direct control of the operations.

One has to keep in mind that investors, at least most of them, are merely concerned with the profits of their investments and would not want to be bothered by the rigors of administrating a business. Moreover, by being technically a part-owner of the company, the original owner will have an assurance that the investor is putting a great deal of interest in the business that also carries his or her name.

This is why public equity financing works both ways in expansions: investors get their bigger profits, while original owner gets to expand his or her business.

Looking for partners

The challenge in public equity financing, like in other forms of investor-related concerns, is for the business owner to find and convince one to be an equity partner in his company.

Finding will not really be a problem, as there are always those who have some extra funds that they intend to invest in a business eyeing expansion. The major concern is to be able to convince them.

In convincing potential equity partners, business owners must keep in mind that they have to convince the former that they will earn profits from their investments. This can be achieved by presenting relevant information as to the operations of the business.

This may include, among others: discussions on the competencies of the current management to handle the expansion, the risk exposure of the equity partners, the business plan and objectives, the financial history and performance of the business.

The entrepreneur should also be ready in negotiating with the terms of the deal, including, as stated earlier, the level of control – or the lack of it – that the equity partner would have once the agreement is in place.

Finally, entrepreneurs must be able to list down his or her reasons for the decision to expand and, more importantly, to utilize public equity financing as a means for the business expansion.

Like what had been repeatedly said, capital for business startups and expansions will never run out – one just has to know what he or she is looking for and, more importantly, where to look for it.

More detailed information and useful advice can be found at http://www.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.http://www.funded.com

09/15/201406/28/2017

Top 5 Most Profitable Industries

The capability of entrepreneurs to effectively and efficiently manage their own businesses is among the requirements to succeed in this field. However, there are other factors that contribute to the actual results of a venture.

One of these, apparently, is the general performance of the sector in which the entrepreneurs establish their businesses. According to a new report, healthcare and the real estate sectors remain the most profitable sectors, comprising almost half of the list.

Despite this, what topped the list is something that is not surprising as deals with money – accounting and other related services. These are some of the most profitable sectors are as follows:

Accounting and related services

There is no denying that proving accounting and related services, such as bookkeeping and payroll services, top the list of most profitable industries at the moment. According to latest reports, the sector has a net profit margin of 19.8 percent – primarily due to high demand and low equipment overhead and equipment costs.

Legal service

Next to accounting, which is also not a surprise, is legal services. With the rise of legal issues arising both between individuals and companies, there is nothing new with reports that among the sectors that reap a big margin is the field legal service. The only surprise, perhaps, is that it did not top the list this year contrary to the last.

Oil extraction; Machinery rental

Tied on the third place are sectors concerned with oil extraction and the leasing/rental of industrial and commercial machinery equipment.

The high ranking of these two is primarily on the current policy that focuses on increased production of crude oil and the rising number of constructions and industrial development in the country in recent years.

Dental services

The fifth on the list, dental services, is quite a surprise. Who would have thought that a specialized sector would be able to compete with, for instance, industries dealing with oil extraction? On another thought, however, the number of people requiring tooth extraction – not to mention other related dental services – will remain a demand so long as the humanity survives.

Real estate leasing; Brokers; Medical service

Tied on the sixth to eighth places are the real estate leasing, real estate brokerage, and the medical profession.

According to latest reports, the improvement of the economy has resulted in the better performance of the housing market, thus the good profit margin of real estate brokers. Moreover, however, this has also pushed the profits of those engaged in rental services, the prices of which have shot up in recent months.

Meanwhile, doctors, as expected, are in the list – primarily due to the increasing population, and partly due to the issues on health and lifestyle that is affecting the new generation.

Other health practitioners; Management companies

Tied for the ninth and tenth spots are other health practitioners and management companies.

Dentists and doctors are not the only ones reaping the increase in profit margin in the past months. Expected to join them are other health practitioners, who are very much needed just like the doctors and dentists in this part of the world.

With the growing trend of businesses outsourcing management strategies to experts, those who have management backgrounds have jumped at the bandwagon and established their own companies that provide the current demand – for a profit, of course.

These ten industries are just some of the most profitable sectors that those who consider establishing businesses – or even just applying for a job – should think about. Runner-up include outpatient care services, schools, real-estate related activities, death care services, and mining support.

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
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06/04/201306/28/2017

The risks of family-funded startups

Funding remains one of the most pressing problems faced by business startup owners. More often than not, entrepreneurs find themselves thinking where they would get that money that would help them establish their respective businesses. And while there are a lot of funds available out there for business startups, the reality is that not all entrepreneurs get the financial support coming from angel investors or venture capitalists.

In the end, a lot of business owners who need financial backing rely on the easiest source of funds that they can think of – their family and friends. Initially, this idea is seen as a very good solution to the money problem. After all, relatives and friends are often seen as best people who can support someone who has started his or her own business. But is it really wise to ask your relatives or friends to invest in your business? For most experts, the answer is no.

Entrepreneurs are often advised that they should never mix their personal lives with their professional ones. Doing so would often result in problems concerning the overall performance of the business. A lot of professional entrepreneurs believe that asking for investments from family and friends are not good for the business due to the risks that could lead to serious relationship problems.

Business startups are not always successful. In fact, some studies note that only 25 percent of startups actually expand and become successful. For the remaining 75 percent, it means failure – and loss of lots of money. Such events, while usual for seasoned investors, are not often experienced by your relatives and friends. Unless they are fully aware of the risks, relatives and friends should not be asked for financial investments in business startups.

Moreover, rifts between those involve in the business can arise once the startup begins expansion. With the entry of secondary and more professional investors, the issue of profit often becomes a sore point.

History shows that a lot of businesses failed because of the problems arising between family members. Thus, business startup owners are advised not to get their family and friends involved in their businesses if they have other alternative to get financial resources.

03/26/201306/28/2017

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.

12/03/201206/28/2017

Educate Your Investors: Effective Ways to Secure Business Funding

Securing the nod of potential investors such as angel investors or venture capitalists is not an easy job. Most of the time, they have the money but they are not familiar with the industry that your working for. Prior to pitching your startup, it is important that you have some idea on how you will respond to the queries of your potential investors.

Be ready to answer questions such as: What is the scope of your industry? Why should I invest in your company? How much will I get when I fund your business? What is your edge over other companies?

Being prepared to answer such questions will greatly improve your chances of securing business funding. The key is simply to make the investors understand your industry and where you are coming from. If you do that, there is no doubt that you will be able to get the venture capital that you really need.

Aside from being able to respond to the questions thrown at you, you should also try to observe the following tips on how to effectively educate your potential investors about your industry:

1. Explain your industry in a familiar manner – It is important that your potential investor understands your industry. And you can only do that by explaining it to him or her using a familiar context. For instance, if your industry is something that concerns e-commerce, then you might want to explain it by using a relatively known concept such as trade or marketing.

2. Avoid jargons – When talking about a concept that we are knowledgeable of, Continue reading “Educate Your Investors: Effective Ways to Secure Business Funding”

11/28/201206/28/2017

Secure Business Funding with a Winning Business Plan

A business plan, by definition, is a piece of document that provides details on how a company should function. For some, a single sentence detailing an objective of the startup can be considered as a business plan. This, however, is not the type of plan that a business owner would want to present to a potential investor. So what makes a winning business plan that could assure financial support from potential investors?

To answer this, we must first enumerate and define different types of business plans that an owner can use for different purposes.

1. Mini-Plan

A mini-plan is a short document that is used to test a business concept or pique the interest of a potential investor or partner. It usually runs from one to ten pages, depending on the type of the business, and contains all key elements and aspects of the company.

A mini-plan is not intended to be a substitute for a full plan. Instead, it can serve as an outline or introduction to a full-length plan that will be produced later on. This plan is definitely not the type of document that you would want to send to a potential investor.

2. Working Plan

If you are a business owner who want to increase the productivity of your company, then you might want to consider writing a working plan that could complement a well-written mini-plan.

Unlike the mini-plan that is limited to all the key aspects and elements of the company, a working plan is mainly focused on the details of the operations of the company. Continue reading “Secure Business Funding with a Winning Business Plan”

11/19/201206/28/2017

The Importance of Business Plans

Business plans are not just for startups that are in search of business funding. In fact, a lot of experienced entrepreneurs spend considerable time writing and revising their plans. The truth is, as long as you’re in the field of entrepreneurship, business plans should always be one of your priorities.

Writing a business plan is not easy. Most of the time, business plan writers will have to look into the every aspect of the company in order to come up with a decent plan. A business plan that provides a solution to a problem without looking into the factors related to that issue will not contribute anything to the company. Rather, it will have to cover a lot of things that one wouldn’t have thought.

Despite these hassle of writing these plans, the result of the endeavor will provide the company with something that could contribute to the success of the business. For one, it would teach the business owner things that he or she is not familiar. During the process of writing, he might even come across problems that he would be able to solve even before they affect the business.

Aside from helping in securing business funding, having a business plan could help the company achieve goals such as finding new ventures, securing suppliers, and engaging more customers.

11/02/201204/24/2021

Honest Things All Business Startups Owners Should Do

When talking to potential sources of business funding, startup owners tend to present exaggerated information as regards the status of their companies. No one can blame them. After all, investors prefer companies that show potential in getting big in the industry that they are working on.

Don’t get it wrong. Exaggeration is not a bad thing, especially if it can be classified under the “optimism” category. There’s nothing wrong with saying that you see your company as the next big thing if you have the numbers to back it up. The problem, however, is that people tend to exaggerate to a point that they present fabricated data and unachievable goals.

In these cases, instead of securing investments, entrepreneurs will find themselves with a series of negative responses from their potential business partners. For those who do not want to experience this, here are some honest things that all startup owners should do:

Create a realistic financial projection

Investors want to see financial projections that promise a huge increase in the company’s market value in just a few years. As the owner, you have the right to believe that the worth of your business Continue reading “Honest Things All Business Startups Owners Should Do”

08/17/201206/28/2017

Is It Time To Apply For A Startup Accelerator?

Following the rise of startup accelerators, the number of new entrepreneurs who want to get a position within these incubators has also significantly increased. Wall Street Journal reports that the applications to more than 200 accelerators around the world have almost doubled in the past two years.

According to Marc Nager, Chief Executive Officer of Startup Weekend, an accelerator may be good for those who are new on the field of entrepreneurship. However, in isolated cases, some of the terms may not be as acceptable. Nager provided some information that might help those who have yet to apply for an accelerator.

Understand the Basics

For Nager, would-be entrepreneurs must start with understanding the basic terms of the deal. He said that before applying, they should look at the benefits that they will get once they participate in this venture.

In the world of startup accelerators, a lot of value will come from the network that will be established amongst the students, mentors, and program leaders. Nager added that the applicants should also use to their advantage the possibility of having one-on-one experience with experienced entrepreneurs. He stresses the need for applicants to identify at least three mentors who have had experience on the industry that they are working on. This will ensure that the sessions will be maximized and will result in a highly beneficial experience.

Choose Wisely

Nager advises that when applying for startup accelerators, would-be entrepreneurs should consider signing up in well-known programs. He said that these will ensure better results that will be advantageous for the participants.

Unfortunately, well-known start-up accelerators usually have very low acceptance rates. With this, applicants can also try signing up in local versions of the accelerators provided that they have high quality program, mentors, and leaders.

Nager also noted the rise in the number of accelerators that offer specialized programs. There are those that focus solely on providing programs that help healthcare startups, civic startups, and startups that use a specific technology, among others.

The specialization may be advantageous for some startups. However, it must be noted that there are also things that one may miss if he or she decides not to sign up in one of the traditional accelerators that offer a wider range of coverage. Because of this, would-be applicants should know how to weigh the benefits before deciding to participate in specialized programs.

Work on that Application

As stated, the chances of getting admitted into a well-known accelerator are very slim. Because of this, would-be entrepreneurs should toughen up their applications if they want to get the nod of the evaluators.

One thing that they can do, Nager says, is to understand how the applications were evaluated by the accelerators. He also said that having a good team that will shine above the rest will boost the chances of getting selected.

Finally, he said that the applicants must do all their best to impress those who will decide on the applications. He suggests the use of human element, among others, to get the approval of the decision makers.

More detailed information and useful advice can be found at www.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.

08/06/201206/28/2017

Funding Your Own Business

Say you are planning to have a business and, furthermore, you know the know-how to bring it into development. The only thing you are losing is the cold money to get started. What are your options?

Suppose you do not have a ready line of credit, an extensive bank administrator, rich family members or a significant store of retirement savings you are willing to risk, you are going to have to do some serious preparation and hard work. Luckily, there are a number of sources of finance for the Business startup owner, at least one of which may be right for you.

SBA LOANS

Available only to U.S.-based businesses (but if you are outside the US you can look for something that has a similar program), the SBA (the U.S. Small Business Administration) has served a large number of business owners begin their own Business. The SBA does not issue resources (money you do not have to pay back) or create financial loans straight, rather, it assures financial loans made by personal loan organizations thereby decreasing or removing the danger natural in new organizations and making loan organizations more willing to offer.

The main concern for the SBA is reimbursement ability from the income of the company as well as “good personality, control ability, security and owner’s equity”. You will be expected to individually assure your mortgage. This implies your personal belongings are at risk.

As for the types of organizations qualified for SBA financial loans, the SBA enforces the following criteria: the company must be “for-profit” (it only indicates that your company has a revenue reason, not that it has actually produced a revenue yet), ), be engaged in business in the United States, there must be “reasonable” owner equity (what’s reasonable will depend on the circumstances) and you are expected to use alternative financial resources first, including your own personal belongings.

The SBA also enforces restrictions on the use of loan proceeds. For example, although the proceeds can be used for most company requirements (the cases given by the SBA include “the purchase of real estate to house the company operations; development, remodelling or leasehold improvements; getting furniture, furnishings, equipment; buy of inventory; and operating capital”), you cannot use the loan proceeds for financing floor-plan needs, to pay current financial debt, to create expenses to the business owners or to pay past due taxes etc.

As a common concept, loans for working capital must be repaid within seven years and loans for fixed assets must be paid for by the end of the economic life of the assets (but not to exceed 25years).

ANGEL INVESTORS

Angel Investors are good spirits with a healthy sense of self-interest. Determining they can get a higher come back if they are ready to take a bit of a risk, they are also often effective business owners themselves and want to give other a hand up. Think of financing from angel investors as a link or gap-filler between being a start-up and preparing for venture capital. The kinds of money we’re referring to here are between about$150,000 and $1.5million. Beyond this point you are in low venture-capital area. The SBA reports that there are around 250,000 angels in the U.S., financing about 30,000 organizations a year. So, how do you connect with one? Not a easy task, unfortunately. It comes down to networking. Begin by speaking with professional and business associates – they will often know someone who knows someone etc.. However, we at funded.com can help you in this.

VENTURE CAPITAL

You’re in the big teams now. Usually you are in the ballpark of millions (of money that is) rather than a thousand. Venture Capital organizations look for their return on investment from capital appreciation rather than interest (unlike banks, for example). They’re generally looking for a return of 500-1,000% on exit. It will not shock you to learn that vc’s are particularly hesitant of internet-based organizations right about now and not surprising. It also provides them right. But if you have a powerful Business Plan and powerful development potential, this could be an option for you longer term.

One of the common issues about this form of financing, however, is that you have a limited control over your business. Venture Capital usually wants to have control on your business, in return for their risk. A venture capitalist will have to seat as a board member, for example. Always remember, that it’s in the vc’s best passions for your company to be successful, so providing up some control in return for outside skills may well be something worth thinking about.

For this, your best bet would be to begin out by analyzing the various loan program provided via the SBA (or your local equivalent). But do not ignore, close to home sources first. If you have household resources at your convenience (for example) and you are assured that your business will be effective (and unless you’re assured about that, don’t get into financial debt with *anyone*, let alone household members), better to begin out slowly and convenience into outside sources of financing as your company (and, furthermore, your company’s cashflow) can support it. After all, Uncle Jack is much more likely to know about the temporary income meltdown than Uncle Sam.