Business Funding Secrets
Business Funding Secrets

Increase Income Instead of Debt

by Brad MacLiver, authorship and profile at: Google

 

The credit crunch continues, and there is still a huge amount of businesses looking for funding. Unfortunately during these times, and especially for a new company, funding might not be available. Therefore, the start-up or expansion of a business may require the company to increase their income first, before taking on debt.

 

Yes, many will say they need the loan first, so they can create the income. However, if they are not able to find the funding, what are their choices? Should they give up on their dreams? Absolutely not, but they will need to adjust their thinking and look for different solutions.

 

As an example: recently a new business had a funding request for $100,000 for a product they could sell online. The company did not have a web site or any operating systems in place. Their business plan was only 15 pages of inadequate information. On top of this they needed the money quick (less than 30 days), to meet a critical window of opportunity.

 

Most traditional business loans, funding established business that have a long track record of sales and profits, are going to take at least 60 days. A start-up business with no historical data for a Lender to base a sound financial decision on, simply is not going to receive funding and especially not in less than 30 days.

 

This new business was being started by someone who had experience in selling the product and stated he had a contact list of at least 400 people who would buy this product. He projected he could sell $200,000 of product within a couple days, so that was his rational the lender did not have much to risk. Note: any business that makes these types of projections, places themselves’ in a position of needing to provide verifiable data and levelheaded analysis of that data. Funding doesn’t happen with sales hype.

 

If the statement of $200,000 in sales is a realistic expectation, this business does not need to borrow money. He could set up a web site, and inform his contact list of 400 people he was open for business. He could pre-sale $200,000 of product. He didn’t need to go through a long drawn out lending process - just to get turned down.

 

Setting up a web sitehas gotten easier. Many web hosting companies have templates so a person only needs to pick the color and add their sales copy. No programming knowledge is required. It is advisable to make sure the web host has a published phone number in the event you need assistance. The web host should also have the capabilities to add additional software packages to the web site.

 

He could also set-up an affiliate program and turn the list of 400 customers into 400 people who would also be selling his product. Affiliate programs are merely sales programs which run off of software and tracking numbers. Affiliates (sales people) earn a commission for selling a product. The software automates the process by tracking the sale and paying the appropriate affiliate. The software can also be used to track certain online advertising promotions.


A new business can also be quickly setup to receive payment through their web site by using Pay Pal. eBay owns Pay Paland this online merchant account system is known to be reliable and easy to set up.

 

Most people go to the Internet looking for information. One way for a new business to establish a relationship with a potential client is to provide quality information in the form of an eBook. eBooks are similar to an Adobe PDF, except they have options. They can be turned off after a limited time period. When an eBook is forwarded to someone else, the new person will be required to register their name, allowing the company to track who is receiving their material.


A company either starting with a limited line of products, or required by the wholesaler to purchase large amounts of inventory, has the options of finding bothalternative products, and companies willing to drop ship the products, so there isn’t any need for a large investment in inventory.

 

It is expected the credit crunch may last another couple years. Companies that don’t meet the current lending requirements will need to think outside the box. Consider the example above where a business had a funding requestof $100,000, when he really only needed to invest about $1,000 to accomplish the same sales results.

 

Tips

1. Use new technology to increase company income.
2. Think outside the box.
3. Expect the credit crunch to get worse before it gets better.

 

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