How to Create a Startup Budget for Your Business

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If you would like to make sure that you are not overspending when starting your entrepreneurial journey, it is important that you create a list of all the necessary costs and equipment you will need to start your operation. Without completing this step, you cannot create financial predictions or even a business plan, which is needed in case you would like to apply for business financing options. Below you will find a few tips on creating your startup budget.

Registration and Trademark Costs

If you are starting a new brand, it is important that you get your logo and designs registered with the patent office. Failing to conduct a company name check can result in legal trouble, and even the closure of your business. Before you choose your trading name, research it and get a quote on logo design, website development, and other brand-related services that will help you establish your business on the market.

Cost of Premises

Next, you will have to calculate the cost of your business offices. Even if you start working from home, you will probably have to invest in faster internet and a more powerful computer. Depending on what your company will be doing, you might need to get business insurance. If you have to rent an office or workshop space, make sure that you list every expense, including insurance, deposit, and other registration costs.

Essential Services

Every business needs some services for smooth operation. First, you will need internet service that is reliable. You will also need a phone line or a couple of cell phones. If you have to deliver goods, you might need to sign up for a contract with a delivery company, and this will cost you a monthly fee. Becoming a member of a local trade or industry organization will also come at a cost. If you would like to create a buzz about your company, you might even join a local networking group for an annual fee.

Tools and Materials

Apart from regular and fixed expenses, you will also have one-off starting costs. If you are planning to manufacture unique accessories or furniture, you will need to invest in professional tools. Check out monumenttools.co.za to get an idea on the prices and estimate the cost of all your manufacturing tools, materials, and safety equipment. It is important that your business has everything it needs to start generating profits from day one.

Employee Costs and Tax

Every successful startup takes employee training seriously. If you would like to get the best people to work for you, it is important that you offer a competitive salary and great benefits. Calculate the cost of training, education, checks, tax, payroll system, and perks when creating your detailed business plan and estimating your costs and profits.

To make sure that you are aware of the cost of starting your own business, you should make sure that you list every startup cost and budget carefully, so you have a realistic view on your future profitability and return on investments.

How Credit Can Benefit Your Business

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Credit has come to be something that business owners look at with a sceptical eye. Many of us prefer a traditional approach to controlling our professional finances and will avoid spending money that we don’t have at all costs. But every now and then certain situations arise where credit could be extremely beneficial for your company. Here are a few situations where you might want to consider applying for credit and using it to your advantage.

Making the Most of Offers and Sales

Chances are that you use the same stockist or wholesaler for the raw materials that your company uses. Whether you specialise in clothing and customise plain wholesale tees and tote bags, or sell edible arrangements and source your ingredients from fruit wholesalers, there’s bound to be someone who you go to for the main components for your products. Every now and then these companies are likely to let large amounts of stock go at a much lower price than usual. They may be trying to clear out warehouse space, old stock ahead of the launch of new stock, or they might simply be having a sale. You want to capitalise on these kinds of situations, getting as much cheap stock in as you need to tide you over. But sometimes you won’t have enough cash on hand to make the most of flash sales. Nothing is more frustrating than having to fork out the standard price for a product knowing that it was on sale just a few days before. It’s situations like this when credit can be used to your advantage. If you have credit of some sort you can use this, then pay back the amount in full a few days down the line when it becomes available. Just remember to try to always make repayments in full, as this will help you to avoid hefty interest costs mounting up. If this sounds like something that you want to have ready and at hand for the future, apply for a credit card and ensure that the lender knows you intend to use it for business purposes. They may be able to offer you preferable interest rates, higher credit limits or other perks if they know that it will be used for large sums.

Rebranding

Sometimes you’ll notice that sales lull. Chances are that your brand no longer has the appeal that it used to. Consumers quickly become tired and want to see something new before they’re willing to part with their cash. This is where rebranding comes into play. You can rebrand your company, making it exciting and fresh again! When doing this, you’re likely to have low funds so credit can give you sufficient means to successfully rebrand your business and start profits rolling in again.

As you can see, credit can prove extremely profitable if used in the right way. Just remember to never take out a loan or credit on something that you are unlikely to be able to pay back. Always make sure to make repayments on time too. This will help you to avoid fees and fines which could prove troublesome in the future.

6 Fundraising Tips for Your New Business

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Every emergent business needs a source of capital. Regardless of the nature of your business idea, this capital has to come from somewhere. Fortunately, there are plenty of places to find funding for an early-stage company.

For guidance specific to your company’s needs and growth trajectory, you’ll of course want to speak with a seasoned business coach, accountant or financial advisor before proceeding. However, these six tips to generate or secure funding for your nascent company are broadly applicable and can definitely give you a leg up regardless of your near-term objectives and overarching vision.

1. Tap Liquid Savings

Although roughly half of Americans live paycheck to paycheck, the other half have at least some financial breathing room.

If you’re part of the second camp, look to your personal savings as a source of startup financing. This is a great way to show future investors that you believe in your business idea. The fact that you’ve personally invested in your company before seeking external funding sources is a vote of confidence for many angel investors and venture capitalists.

2. Stay Lean for Longer

As an entrepreneur, it’s always in your best interest to carefully watch the bottom line. Successful business owners use every available tactic to control costs and remain lean, stretching their startup resources farther.

“As a young entrepreneur, staying lean was very important to me,” says entrepreneur George Otte. “My approach to business allowed me to grow on my own terms and strengthened my enterprise during its critical early years.”

By following in Otte’s footsteps, you can wait longer to seek external funding. When the time finally does come to pitch investors on your idea, you’ll be in a stronger financial position.

3. Borrow Against Home or Retirement Equity

If you have substantial equity in your home or a sizable balance in a tax-advantaged retirement account, you can borrow startup capital at lower rates than those afforded by unsecured loans, credit cards, and traditional lenders such as banks.

Contrary to popular belief, borrowing from a retirement account is possible while preserving your scheme’s tax advantages.

“There are provisions in the Employee Retirement Income Security Act and IRS tax codes that enable people to invest retirement savings in a business if they are active employees in the company,” says business expert Erik Sherman.

In other words, as long as you play a day to day role in your startup’s operations, you can borrow from your retirement savings without incurring a tax penalty.

4. Seek Support from Your Friends and Family

Friends and family members are great sources of “patient capital.” In other words, they may be willing to wait years or even decades to realize returns on their investments. “Patient capital” is the first source of external funding sought by many entrepreneurs.

5. Run a Crowdfunding Campaign

If you have a novel idea that you think consumers will really love, build a crowdfunding campaign around it. Crowdfunding allows you to raise money at relatively low cost without giving away equity in your company or paying interest over time.

6. Apply for Grants and Prizes

No matter what your company does, it’s likely eligible for grants from industry associations, local government agencies, or entrepreneur-oriented nonprofits. It might also be a worthy contestant in startup competitions that promise cash prizes to winners and runners-up. Even if you don’t win, you’ll learn a lot from mentors and fellow contestants.

3 Advantages of a Line of Credit for Your Small Business

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If you have a small business, then you understand how important it is to have the right cash flow. Your available cash flow can make or break your business and can spell success or disaster – if you don’t have the necessary cash on hand, for instance, how can you pay your bills and take care of your daily operational requirements? Even more than this, how can you grab opportunities to make your business grow and expand?

The problem is that many small business owners with cash flow issues end up turning to their personal savings or borrowing from friends and family just to keep their business going, which isn’t the best way to deal with it.

Fortunately, there are ways you can get the proper funding for your business – one of which is to get a line of credit. Here are three advantages of a line of credit for your small business.

1) You have cash – but you still have full control

With a line of credit, your business will have the cash it needs to function, operate, and even expand. What makes a line of credit more advantageous, however, is that you remain in full control of your business operations. This is different from acquiring investors, where you may have to give up a certain amount of control. With a line of credit, you have access to cash, but you don’t have to bother about the whims or demands of investors.  

2) Better budgeting

A line of credit is also better for your business when it comes to budgeting. Unlike a business loan where you are often presented with a lump sum, a line of credit gives you money when you need it, as you need it.

The flexibility of a line of credit is advantageous to your business since it allows you to budget your finances more effectively.

3) Build your credit score

As a small business, it’s important for you to have a good credit rating. A good credit rating will make it easier for you to acquire loans and credit in the future. With a line of credit, you can achieve a more positive credit score (provided you pay off your debt, of course), which you can certainly make use of if you would like to get bigger loans for future growth and expansion.

If you want to do whatever it takes to make your small business grow and succeed, you need all the help you can get. Getting a line of credit is one sure way of injecting much-needed lifeblood into your business, but remember that it’s still a debt to be paid, and it’s always good to manage it wisely as well.

The Black Mark: Personal Finance Problems Which Could Stop Your Startup

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For the most, it’s essential to keep your personal life and your startup separate. Business and pleasure don’t mix well. A scandal at this stage could spell curtains. So, the chances are that you keep your personal life out of the office. It’s usually the best route to take.

But, such separation life isn’t always possible. Entrepreneurs can’t escape the fact that who they are is linked to what they’re doing. Your personal background could have a massive impact on your success or lack thereof. For example, a bad personal meeting with a future business associate could scupper a deal. Equally, a bad credit rating could halt progress before you even get going. And, that’s what we’re going to look at here.

You may assume that personal finances wouldn’t have anything to do with your enterprise. But, think again. Here’s how your own money problems could cost your startup.

Failure to get a loan/backing

Let’s not beat around the bush; no startup can get off the ground without money. You’ll have a hard time convincing anyone your business is worth investing in if you’re drowning in debt yourself. Not to mention that yet another loan could lead to more trouble. Even if you manage to get a loan against the business instead of your name, it’s unlikely you’ll meet the repayments. As such, your company could end up filing for bankruptcy before you even start.

Lack of faith from the business world

Nothing stays secret for long in the business world. If you’re drowning in debt, the businesses in your circle will soon know about it. And, once they do, you’ll have a hard time getting a deal from any of them. Why would they trade with an entrepreneur who can’t handle money? That would be financial suicide. If your company goes bust, they lose money. It’s as simple as that. Instead, you’ll find that all those businesses turn their backs on you. And, when they do, you’ll soon find yourself in trouble.

Is there anything you can do?

Luckily, there’s plenty you can do to get the situation under control. You want to develop a way to clear your debts as soon as possible. The faster you’re clear, the sooner you can enter the business world on stable footing. Many would choose to turn to debt consolidation to tackle the issue swiftly. But, that might not be the best plan for you. After all, every penny counts when you’re starting out. You can’t afford insane interest rates right now. Instead, consider the debt relief programs offered by companies like the Bank of America. This way, you can develop a plan to clear debts in a realistic time frame.

The Black Mark: Personal Finance Problems Which Could Stop Your Startup

For the most, it’s essential to keep your personal life and your startup separate. Business and pleasure don’t mix well. A scandal at this stage could spell curtains. So, the chances are that you keep your personal life out of the office. It’s usually the best route to take.

But, such separation life isn’t always possible. Entrepreneurs can’t escape the fact that who they are is linked to what they’re doing. Your personal background could have a massive impact on your success or lack thereof. For example, a bad personal meeting with a future business associate could scupper a deal. Equally, a bad credit rating could halt progress before you even get going. And, that’s what we’re going to look at here.

You may assume that personal finances wouldn’t have anything to do with your enterprise. But, think again. Here’s how your own money problems could cost your startup.

Failure to get a loan/backing

Let’s not beat around the bush; no startup can get off the ground without money. You’ll have a hard time convincing anyone your business is worth investing in if you’re drowning in debt yourself. Not to mention that yet another loan could lead to more trouble. Even if you manage to get a loan against the business instead of your name, it’s unlikely you’ll meet the repayments. As such, your company could end up filing for bankruptcy before you even start.

Lack of faith from the business world

Nothing stays secret for long in the business world. If you’re drowning in debt, the businesses in your circle will soon know about it. And, once they do, you’ll have a hard time getting a deal from any of them. Why would they trade with an entrepreneur who can’t handle money? That would be financial suicide. If your company goes bust, they lose money. It’s as simple as that. Instead, you’ll find that all those businesses turn their backs on you. And, when they do, you’ll soon find yourself in trouble.

Is there anything you can do?

Luckily, there’s plenty you can do to get the situation under control. You want to develop a way to clear your debts as soon as possible. The faster you’re clear, the sooner you can enter the business world on stable footing. Many would choose to turn to debt consolidation to tackle the issue swiftly. But, that might not be the best plan for you. After all, every penny counts when you’re starting out. You can’t afford insane interest rates right now. Instead, consider the debt relief programs offered by companies like the Bank of America. This way, you can develop a plan to clear debts in a realistic time frame.

It’s also worth being completely open about your situation. Speak about how you’re dealing with the issue. As mentioned above, these things have a way of coming out in the end. So, beat the gossip by sharing your story. You could even become an inspirational figure for other entrepreneurs out there.

Financial Advice For Your New Startup

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Starting a new business, whether it’s by yourself or with a small team of friends and professionals, is no easy task. The number of startups popping up in all manner of industries might be growing exponentially but the number of those startups which achieve success is still relatively low. Many entrepreneurial individuals jump into the business world with their head in the clouds. It’s good to have innovative ideas and to be passionate about turning them into a reality but running a good business depends on you being level-headed and practical.

Don’t throw all your crazy ideas in the bin just yet. You shouldn’t dismiss your creative side, by any means, but you shouldn’t let it dictate your business decisions either. You need to focus on the financial side of running your startup, above all else. Money keeps the wheel of productivity turning. Whilst your sole goal shouldn’t be to make a profit at any cost (given that you most likely want to retain integrity and provide a top-quality service), you should certainly focus on managing your business’ funds sensibly and effectively. Here are some pieces of financial advice for your new startup to help you avoid going under before you’ve even really started.

Keep track of expenditures and income.

This might seem like a lesson from Business 101 but it’s baffling that so many companies make the mistake of overspending. You need to keep track of your profits in weekly roundups, ideally. Think of this in the same way as managing your personal finances (in a sense, these company finances are personal because you own the startup). You need to reflect on the money your startup has earned, take a look at the business plan, and start to make some decisions with regards to planning upcoming expenditures. Your startup still needs to spend money to improve itself; if you’re too afraid to make investments then you’re actually taking a bigger risk by failing to progress your business forward with higher-quality services, more employees, and so on.

Just to reiterate, the most important thing to remember is that your expenditures shouldn’t ever exceed your profits. You wouldn’t spend beyond your means with regards to your personal finances or you’d end up in debt. It’s no different in the business world. Your company’s bank account only runs so deep and if you’re a startup then it probably doesn’t run very deep at all (for the moment, at least). This doesn’t mean you should play things safe because you still need to spend money to make money, as mentioned before. However, keeping track of spending and frequently referring back to the budget is essential if you want to safeguard your startup’s finances.

Use personal funds.

This startup is your creation, isn’t it? Perhaps you co-founded it with some friends but you own a stake in this business. You’re not some worker bee at any old firm. You’re your own boss. And that means you have a real investment and stake in this company. You can’t just jump ship if things look dire. It’s up to you to keep things afloat. That’s why you should be striving to pour as much of your personal funds into the startup as possible during the early days, in order to get things started. You might not be seeing the sales you want just yet because you don’t have a big enough client-base, so the money your startup needs in order to grow has to come from somewhere else.

Of course, you’ve probably quit any 9-5 job you might’ve had because you need to dedicate all your time and effort to this new venture. Perhaps, instead, you could look for other sources of revenue. Investing in property is always a smart and stable way to gain some extra income. You could look into a hdb rental in order to make some money from leasing out properties to other. Investing in property is a great way of ensuring return on investment; people always need places to live. There are other ways to invest, of course, but the goal is to look for low-risk, high-reward opportunities.

Remember that automation is your friend.

Time is money in the business world. When you’re running a startup with only a small team at your disposal, you’re already fighting an uphill battle against all the huge competitors in your respective industry. They can get more done in a shorter space of time and maximize their profit potential. They have a superior financial model, surely? Perhaps not. Digital technology is the slingshot you can use in order to take down Goliath. Rather than wasting your time focusing on administrative tasks and other dull aspects of daily business life that are taking your attention away from the “real” work, you should automate as many tasks as possible; payroll software and many other types of automated services can take a load off your mind. It’ll also free up more time for you and your team to work on creative ideas and talk with your clients. You’ll be able to focus on the money-making side of things rather than basic tasks which need to be completed but don’t need to be done by humans.

Build up that client-base.

Do you still not have many loyal clients? Make that your priority. Sales are everything. Don’t get swamped by all the technicalities of running a business. You’ll be growing and changing all the time, so your startup’s organizational structure will always need to be reworked (new job roles will need to be fulfilled, the budget will need to be revisited, and so on). What you need to focus on today is gaining customers. You need effective marketing and top-quality products or services. It’s important not just to reel in potential customers with an enticing brand but to make sure that the service is great enough for them to return again (and to leave a positive review which captures the attention of other potential customers). You can’t just fake it until you make it. Your startup really needs to be as good as it says it is if you want it to make money and grow.

7 Options To Start a Business With Little or No Money

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Do you have great business ideas that never get past the daydream stage because you have little or no money? A lot of us have been there, but don’t give up just yet! Obviously it would be nice to have a million in the bank, but even if you’re living from paycheck to paycheck or don’t have a job at all, there are still options and techniques to start a business.

Let’s dig a little deeper …

1) Provide a Service

While you might have one grand business idea that does require substantial capital, not all businesses do – especially if you are providing a service. Becoming an online freelancer for example requires next to no startup costs (unless you don’t already have a computer) and you will be paid as you go. Depending on your goals and how you approach freelancing this could be the business for you, but it is also a great way to bide your time, make some extra cash and save, while you work on other business ideas … which brings us to our second point:

2) Research and Plan

Just because you don’t have the funding now doesn’t mean you won’t in the future. If you are serious about starting a business there is nothing stopping you researching the market, drafting a business plan, estimating costs and carrying out other vital research. ll businesses start with research and planning, and some of this can be carried out at home on your PC for free.

3) Saving

So you have no capital right now? Save!Whether that means revising your monthly budget and cutting some outgoings, freelancing (see Provide a Service), selling unwanted items, or doing odd jobs – good old fashioned saving should not be dismissed. Imagine how great you’ll feel when your business is a success and you know you put in all that hard work at the beginning!

4) Sharing and Reducing Costs

At first glance startup and day-to-day business costs might seem overwhelming, but you can get by a lot cheaper when you think outside the box. Do you need to rent office space or can you utilize public facilities, shared work spaces or even your own home? Why pay for a phone line when you can use Skype? Do you need to pay for professional marketing, advertising or other services, or can at least some of this be done yourself?

5) Loans

Most large businesses are not funded solely by the founder’s pocket; they borrow from investors and partners or take out loans on the hope that the business will be a success and make enough to repay them. Someone with a good credit score and a business plan stands a strong chance of getting a business loan from the bank. Others might choose to use a regular personal loan, though this might carry some added risk. If you have bad credit or are between jobs there are still loan options out there that you can use to fund a business. You can learn more on how to get a loan with no job from MatchedLoans.com.

6) Seek Investors and Incubators

If you are particularly confident in your business idea and have thoroughly researched the market and crunched the numbers, you could approach individual and groups of investors who fund startups. Incubators are funding programs designed specifically for startups that come with extra benefits such as expertise, admin services, office space and other support. They might also be sponsored by local colleges or universities.

7) Crowdfunding

Crowdfunding puts you in touch with investors and regular members of the public, and if your idea is something viable you may be able to fund it all the way. Some sites like Fundable are designed specifically for crowdfunding startups. Although you can accept straight-up donations on most platforms, usually you will be required to offer perks in return for a set sum of money. This might vary from a simple thank you or piece of business/product related merchandise, to early access to the product or even pre-ordering of the finished product itself.

Exactly how you set this up is up to you and will depend on your business idea and business model, but you must obviously account for any perks you offer. You must also be enthusiastic and capable of marketing your idea through the crowdfunding platform as people still need to know it exists before substantial capital can be raised.

These are just some of the ways you can get a business going with little to no money. Have your own methods? Let everyone know in the comments or share the article if you found the information useful!

Can Using an Auction House be Beneficial for Start-ups?

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Auction houses hold many benefits for individuals and big businesses seeking to buy and sell property through this method. The main one of these for those looking to buy is the opportunity to get an absolute bargain, while for sellers it can be a quick way to sell a property. For start-ups, going to an auction house such as through Allsop can be beneficial in many ways, though for certain companies there may be one or two drawbacks as well.

Advantages – Great Value Options

Undoubtedly the main reason many will turn to an auction house is to find a bargain. This can help start-ups looking for affordable property, rather than being lumped with expensive rental or ownership costs. There is also no fixed asking price, which means buyers can secure a property for a lower amount than you would usually have to pay. Plus, once you have made the highest bid there is no chance for it to be remarketed or the seller to accept other offers.

Investment Opportunities

Buying a property at auction doesn’t mean it has to remain your business’ headquarters forever. It could be a temporary base bought for a low price as a business hold up and then sold later on for a profit. This provides your start-up not only with a place to work from but also a good investment. Compared to many other investments, the property market is one which has retained and grown in value, so can be seen as a more stable investment than the likes of shares, currency and others.

Speed

It can be a lengthy process finding, buying or renting office space or a building to use for your business. There are few quicker ways to do this than through an auction, whereby you can be completing on your purchase within 28 days of the hammer falling. The same is true for any businesses hoping to sell property, as the buyer is committed so that the sale becomes as immediate as possible.

Disadvantages

Risk Factor

There is always going to be some element of risk involved with using an auction house to purchase property. You can easily go to one, two, three or more and not find anything that meets your needs. Sometimes it may seem like there is a bargain available but the property could either have hidden issues (such as large repair costs), be in an undesirable location or other factors. Still, it can be worth the risk if you unearth a real bargain.

Obligations

It’s great that the process is so fast, but it does mean that you can rush into things. Once the hammer falls you have an obligation to buy the property. With plenty of research (an auction house should provide all the relevant documents before the auction) then you shouldn’t end up surprised by your purchase. However, elements such as a low price and the competitive environment can encourage some to bid, win and take on the obligations for properties they otherwise do not need.

An auction house can be a great place for start-ups to find a bargain on any property for their usage or as an investment, but it is important to remain careful and aware of any risks.

EP19: Shane Liddel From SmartCrowdfunding On How To Have A Great Campaign

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First off CEO of Smart Crowdfunding Shane Liddel explains important factors in having a successful campaign. Then we here a live pitch for the X-Stand, and Monica Selby talks about Nashville Faith and Work Summit.

EP31: Angel Investor Manny Fernandez On Raising Capital & Entrepreneurship

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San Francisco angel investor of the year Manny Fernandez explains new things happening in the world of equity crowdfunding, why he founded Dreamfunded, and even offers to help startup founders with resources they need to raise capital!

Listen to the podcast then checkout DreamFunded.Com to learn more about new ways to raise capital!

EP 29: Angel Investor Tatyana Gray Explains What Investors Are Looking For

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Angel investor Tatyana Gray explains shifts in the investment world, and shares different things that turn off investors to founders and ways to impress them.

Lightning Round Answers:

Crowdfunding Pitch Show EP8: David Wilson Pitches Jamblaster

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In this pitch episode David Wilson pitches their amazing new product the Jamblaster, that allows play music with others live in sync remotely, record pro quality audio, broadcast video performances, teach/take online lessons & more! You can even do live Youtube broadcasts with multiple camera angles, all through Jamblaster.

Check out their campaign here after listening to the pitch!