The task of raising money for a business is not as difficult as most people seem to think. This is especially true when you have an idea that can make you and your backers rich. Actually, there's more money available for new business ventures than there are good business ideas.
A very important rule of the game to learn: Any time you want to raise money, your first move should be to put together a proper prospectus.
This prospectus should include a resume of your background, your education, training, experience and any other personal qualities that might be counted as an asset to your potential success. It's also a good idea to list the various loans you've had in the past, what they were for, and your history in paying them off.
You'll have to explain in detail how the money you want is going to be used. If it's for an existing business, you'll need a profit and loss record for at least the preceding six months, and a plan showing how this additional money will produce greater profits. If it's a new business, you'll have to show your
proposed business plan, your marketing research and projected costs, as well as anticipated income figures, with a summary for each year, over at least a three year period.
It'll be advantageous to you to base your cost estimates high, and your income projections on minimal returns. This will enable you to "ride through" those extreme "ups and downs" inherent in any beginning business. You should also describe what makes your business unique---how it differs form your competition and the opportunities for expansion or secondary products.
This prospectus will have to state precisely what you're offering the investor in return for the use of his money. He'll want to know the percentage of interest you're willing to pay, and whether monthly, quarterly or on an annual basis. Are you offering a certain percentage of the profits? A percentage of the
business? A seat on your board of directories?
An investor uses his money to make more money. He wants to make as much as he can, regardless whether it's short term or long term deal. In order to attract him, interest him, and persuade
him to "put up" the money you need, you'll not only have to offer him an opportunity for big profits, but you'll have to spell it out in detail, and further, back up your claims with proof from your marketing research.
Venture investors are usually quite familiar with "high risk" proposals, yet they all want to minimize that risk as much as possible. Therefore, your prospectus should include a listing of your business and personal assets with documentation---usually copies of your tax returns for the past three years or more. Your prospective investor may not know anything about you or your business, but if he wants to know, he can pick up his telephone and know everything there is to know within 24 hours. The point
here is, don't ever try to "con" a potential investor. Be honest with him. Lay all the facts on the table for him. In most cases, if you've got a good idea and you've done your homework properly, and "interested investor" will understand your position and offer more help than you dared to ask.
When you have your prospectus prepared, know how much money you want, exactly how it will be used, and how you intend to repay it, you're ready to start looking for investors.
As simple as it seems, one of the easiest ways of raising money is by advertising in a newspaper or a national publication featuring such ads. Your ad should state the amount of money you want--always ask for more money than you have room for negotiating. Your ad should also state the type of business
involved ( to separate the curious from the truly interested), and the kind of return you're promising on the investment.
Take a page from the party plan merchandisers. Set up a party and invite your friends over. Explain your business plan, the profit potential, and how much you need. Give them each a copy of your
prospectus and ask that they pledge a thousand dollars as a non-participating partner in your business. Check with the current tax regulations. You may be allowed up to 25 partners in Sub Chapter S enterprises, opening the door for anyone to gather a group of friends around himself with something to offer them in return for their assistance in capitalizing his business.
You can also issue and sell up to $300,000 worth of stock in your company without going through the Federal Trade Commission. You'll need the help of an attorney to do this, however, and of course a good tax accountant as well wouldn't hurt.
It's always a good idea to have an attorney and an accountant help you make up your business rospectus. As you explain your plan to them, and ask for their advice, casually ask them if they'd mind letting you know of, or steer your way any potential investors they might happen to meet. Do the same with your banker. Give him a copy of your prospectus and ask him if he'd look it over and offer any suggestions for improving it, and of course, let you know of any potential investors. In either case,
it's always a good idea to let them know you're willing to pay a "finder's fee" if you can be directed to the right investor.
Professional people such as doctors and dentists are known to have a tendency to join occupational investment groups. The next time you talk with your doctor or dentist, give him a prospectus and explain your plan. He may want to invest on his own or perhaps set up an appointment for you to talk with the manager of his investment group. Either way, you win because when you're looking for money, it's essential that you get the word out as many potential investors as possible.
Don't overlook the possibilities of the Small Business Investment Companies in your area. Look them up in your telephone book under "Investment Services." These companies exist for the sole purpose of lending money to businesses which they feel have a good chance of making money. In many instances, they trade their help for a small interest in your company.
Many states have Business Development Commissions whose goal is to assist in the establishment and growth of new businesses. Not only do they offer favorable taxes and business expertise, most also offer money or facilities to help a new business get started. Your Chamber of Commerce is the place to check for further information of this idea.
Industrial banks are usually much more amenable to making business loans than regular banks, so be sure to check out these institutions in your area. insurance companies are prime sources of long term business capital, but each company varies its policies regarding the type of business it will consider. Check your local agent for the name and address of the person to contact. It's also quite possible to get the directories of another company to invest in your business. Look for a company that can benefit from your product or service. Also, be sure to check at your public library for available foundation grants.
These can be the final answer to all your money needs if your business is perceived to be related to the objectives and activities of the foundation.
Finally, there's the Money broker or Finder. These are the people who take your prospectus and irculate it with various known lenders or investors. They always require an up-front or retainer fee, and there's no way they can guarantee to get you the loan or the money you want.
There are many very good money brokers, and there are some that are not so good. They all take a percentage of the gross amount that's finally procured for your needs. The important thing is to
check them out fully; find out about the successful loans or investment plans they're arranged, and what kind of investor contacts they have---all of this before you put up any front money or pay any retainer fees.
There are many ways to raise money---from staging garage sales to selling stocks. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company.
Start thinking about the idea of inviting investors to share in your business as silent partners. Think about the idea of obtaining financing for a primary business by arranging financing for another business that will support the start-up, establishment and developing of the primary business. Consider the feasibility of merging with a company that's already organized, and with facilities that are compatible or related to your needs. Give some thought to the possibilities of getting the people supplying your production equipment to co-sign the loan you need for start-up capital.
Remember, there are thousands upon thousands of ways to obtain business start-up capital. This is truly the age of creative financing.
Disregard the stories you hear of "tight money," and start making phone calls, talking to people, and making appointments to discuss your plans with the people who have money invest. There's more money now than there's ever been for a new business investment. The problem is that most beginning "business builders" don't know what to believe or which way to turn for help. They tend to believe the stories of "tight money," and they set aside their plans for a business of their own until a time when start-up money might be easier to find.
The truth is this: Now is the time to make your move. Now is the time to act. the person with a truly viable business plan, and determination to succeed, will make use of every possible idea that can be imagined. And the ideas I've suggested here should serve as just a few of the unlimited sources of monetary help available and waiting for you!
There seems to be any number of appealing Multi-Level Marketing programs available these days. Our researchers haven't analyzed them all, but based upon the appeal of those for the participants (most of them look as though they could put money in your pockets). However, don't ever delude yourself into thinking that multi-level marketing won't cost you anything nor require much of your time, or work on your part. Indeed, successful selling, and most assuredly, multi-level marketing, will require an investment (decication) and a lot of hard work!
However, before you "sign-up" for any MLM deal or begin one of your own, it's going to pay you to do a little bit of market research relative to the sales potential of the whole deal. for instances, if you can sell to a "waiting market" you'll make money. But if the people you attempt to recruit as duplicates of yourself feel that they're going to have a hard time selling it to someone else, then you haven't got much of a winning MLM program; regardless of how much money you claim they can make, if only they'll get out there and sell!
This specifically applies to MLM programs that offer "limited appeal" products such as gourmet recipes, health foods, household "knick-knacks", books on needlecraft or magazine subscriptions. Beware also of deals that require you to purchase an inventory or maintain a certain sales level. Look for the "bad parts" of an offer, and then weigh these against the ease with which you'll be able to make a sale. At the bottom line, if you have a hard time selling it, then the people you recruit to sell it for you will find it even harder to sell, and that'll be the end of your "big money" muti-level program.
There are countless reports, manuals, books and other publications that "supposedly" tell you how to attain riches in mail order, party plan selling, and even street-corner sales. the thing is, all of these "how-to" publications try to instruct you how to put a mailing piece together, how often to send for you offers out, and even the importance of "neatness & quality" within your offer, but very few if any come right out and help you get your offer to your most likely customers. As you know, unless an interested buyer sees your offer, you're not going to make any money.
What I'm saying is that most people thrash around,waste time, spend hundreds of dollars, and never make any money simply because they don't know how to get their offers to the people (without it costing them an arm and a leg).
Here's how it's done: Regardless of what your offer entails, put together the most dynamic and mass-appeal "one-page" advertising circular you can come up with. As I've so often stated in the past, the best-selling and most-productive circular is one that "tells the reader you have a solution to his many money problems." In other words, with your circular, promise him a way to make himself rich, and he'll not only be interested,he'll jump on your program.
Next, make it as easy as possible for the people who see your offer to respond. That is, addition to an order coupon at the bottom of the advertising circulars describing your offer, give him the chance to get involved in your program for least possible cost.
If you've put together a "winning offer" most people seeing it will want to know more about it, but if you charge them $5 for registration or enrollment fees, you'll lose about half of those " wanting in," because they're afraid of being ripped off. But if you charge them $2 or less, almost all of the people seeing your offer will "take a chance," just to find out what kind of deal it is you're offering.
In summary, you must have a one-page advertising circular that really appeals to most of the people CHANCE TO SOLVE ALL YOUR MONEY PROBLEMS! It must include a coupon the reader clips off and sends in to you for enrollment or registration in your program. It has to be priced at $2 or less to "get everbody" to at least check it out. And, it must be complete on one page to hold your printing costs in line.
Assuming you're with us, and organized thus far, take this advertising circular you've made up in original form, to a quick printer in your area. Ask him to print up $10,000 of these one-page advertising circulars for you. This will cost you approximately $200.
If you don't have the money, you can either work an arrangement with the printer to pay him in 30 days, or include him in as a "silent partner" in your program. Ask him to read over your offer, explain how you intend to get it to the people, and about how much money you expect to gross from it. Then, simply offer to split the proceeds if he'll carry your printing costs for you.
While the circulars are being printed, and the ink is drying, line up your initial distribution efforts. The first thing is to contact the Cub Scout and Brownie organizations in your area. Arrange with the leaders of these groups to pay them $10 per thousands if they'll station people at the exits to all the shopping centers in your area and pass out one of your circulars to everyone as they leave the shopping center. Simply tell them that you've got 10,000 of these circulars to hand out, and that you'll pay them the $100 for handing them out, on the first of the month.
The best kind of places to handout your circulars are those that feature discount stores, recycled clothing stores, and inventory reduction sales. Next on your list of places to hand out circulars should be Flea Markets, Swap and Shop events, and even garage sales. Anywhere there's a lot of people congregating or coming & going, is a good place to hand out your advertising circulars (all in your own home town and without postage costs).
Now comes the good part. While your "hired helpers" are handing circulars out for you at strategic locations throughout the area, you should be calling in person on every shopkeeper and store owner or manager in the area.
Show them each copy of your circular. Explain your program to them, and offer to cut them in on the profits if they'll help you hand them out by dropping one in with the purchases of each of their customers. The stores won't want to become involved in extra bookkeeping nor the handling of money for you, so you'll have to devise a method of knowing where your orders come from (a code for each of the stores handing out circulars for you).
This is very simple. Just assign a different "department number" to each store, and when you have the circulars printed for each store, insert the department code in the address the reader is supposed to send his order to.
Generally speaking, you should offer to supply the circulars without cost to the distributors, including the "special coding" for each store. Thus the need for a good working relationship with the printer in your area. The amount of commissions per order received that you allow to each store should range between 15 to 30 percent, but of course, always try to finalize each deal for the least amount.
Be sure to keep records of all your in coming orders. It would be wise to have a separate record book for each distributor. Thus, you can review the number of orders received from each distributor's customers with him when you pay him his commission at the end of the month. At the same time, you should jot the name, address and phone number of each person sending in an order, onto a 3x5 index card. Arrange thee cards in alphabetical ad zip code order, ad store them in an old shoebox. When you have
10, 15, or 25 thousand of them, you'll be able to sell them at $1 per name to any number of mailing list brokers.
Another thing you'll want to do, each envelope you receive (clip the stamp off and save these in still another shoebox) stamp collectors will pay you $10 to $25 for each shoebox full of stamps you can collect. After you've clipped the stamps off, place these envelopes with your customer's return address in still another storage box. When you have several boxes full of these envelopes from people who have spent money with you, there are any number of "list buyers" who'll pay you for them.
Once you've got your town saturated with circular distributors (be sure to leave a stack in all the barber shops and beauty salons), as well as at the counter in cafe restaurants, bowling centers, theaters, and the "lodges" of all the fraternal as well as labor unions in the area (your next move is simply to duplicate these efforts in a neighboring town or city).
Basically, we're talking about multi-level marketing and total advertising-recruiting efforts on your part. Your main thrust should be to "pull in" as many people as possible (show them the program), and if they want it, let them get in on it--if not, forget about them and move on to the next prospect. This is called "prospecting," and it's going to cost you money and time, regardless of what you're trying to sell.
So you put together an "invitation type announcement" which is your initial 42 advertising circular and you get it to as many people as possible. They pay you a "cover charge" of $2 to find out what your program is all about. And before you get all upset and throw this report in the waste basket, think about this: Let's suppose there are 42,000 people in your town--30,000 adults, and 18,000 separate families. If each of these 18,00 families were to send you $2, how much money would you have? 436,000 right? Now then, tell me whether or not you'd like to have an extra $36,000.
The people send you $2 for a "look see" at your program for solving their money problems. You send them back your multi-level program brochure which describes how they can duplicate what you're doing and make a bundle of money for themselves, and the cost of the supplies for them to get started. At the same time, you send out another one-page advertising circular that offers business success reports. Just another for instance, let's say that 30% of the people receiving your MLM Brochure enroll and send for a start-up kit or supplies. You've expanded your MLM distributorship and made money, right? And now, let's suppose that of all the people who've sent $2 to find out what your program is all about, a total of 40% spend $5 with you for one of your business success reports--$36,000 gross income for initial expenses of $600--then, let's say your MLM brochures cost you $100 per thousand for total expenses thus far of $2,400--plus another $600 for your business success reports circulars--with another $11,250 as your commission from these reports, for a total gross income thus far of $47,250--then, 3rd class postage and envelope costs of $2,550...Subtract your expenses from your gross income of $47,250 and you should end up taking $41,700 to your bank, catching up on all your bills, or spending on a long overdue vacation to Acapulco or Hawaii.
That's it! That's how easy and simple it is and it actually works! Once you've covered your entire state in this manner, simply start renting mailing lists of people listed as Opportunity Seekers, and shotgun your basic page, $2 offer to all of them. By following these instructions and working according to this plan, you should easily take in more than a million dollars within the next twelve months.
We've been using the attached "$2 circular for some time now, and it's proven to be a fantastic winner for us from the start. We had 10,000 printed at a cost to us of $200 (paid a couple of cub scout troups $100 to hand them out for us; and from the initial 10,000 circulars we handed out), we received 2,341 $2 inquires=$4,682... And, another 353 orders for the MLM Manual offered on the same circular=$7,060- Total income form our initial $300 investment was $11,742.
Since that time, we've expanded our market, and we're now putting out 10,000 of these circulars each and every week.
You can do it too! All it takes is that first circular and then, distribution. If you'd like to make some of this "big money" we've been talking about (feel free to duplicate our circular with your name/address on it, and get it out to the people in your area).
Retirement may be a long way off for you – or it might be right around the corner. No matter how near or far it is, you’ve absolutely got to start saving for it now. However, saving for retirement isn’t what it used to be with the increase in cost of living and the instability of social security. You have to invest for your retirement, as opposed to saving for it!
Let’s start by taking a look at the retirement plan offered by your company. Once upon a time, these plans were quite sound. However, after the Enron upset and all that followed, people aren’t as secure in their company retirement plans anymore. If you choose not to invest in your company’s retirement plan, you do have other options.
First, you can invest in stocks, bonds, mutual funds, certificates of deposit, and money market accounts. You do not have to state to anybody that the returns on these investments are to be used for retirement. Just simply let your money grow overtime, and when certain investments reach their maturity, reinvest them and continue to let your money grow.
You can also open an Individual Retirement Account (IRA). IRA’s are quite popular because the money is not taxed until you withdraw the funds. You may also be able to deduct your IRA contributions from the taxes that you owe. An IRA can be opened at most banks. A ROTH IRA is a newer type of retirement account. With a Roth, you pay taxes on the money that you are investing in your account, but when you cash out, no federal taxes are owed. Roth IRA’s can also be opened at a financial institution.
Another popular type of retirement account is the 401(k). 401(k’s) are typically offered through employers, but you may be able to open a 401(k) on your own. You should speak with a financial planner or accountant to help you with this. The Keogh plan is another type of IRA that is suitable for self employed people. Self-employed small business owners may also be interested in Simplified Employee Pension Plans (SEP). This is another type of Keogh plan that people typically find easier to administer than a regular Keogh plan.
Whichever retirement investment you choose, just make sure you choose one! Again, do not depend on social security, company retirement plans, or even an inheritance that may or may not come through! Take care of your financial future by investing in it today.
Franchise businesses such as Wendy's, McDonald's and Jack-In-The-Box are booming. The people setting up franchise ideas and businesses know a good thing, and are really promoting this idea. Franchises for just about every conceivable kind of business are being sold in ever increasing numbers.
Some franchises are very good. They treat both the franchisor and the franchisee very well. Others are very one-sided. Still others are almost total rip-offs that trap one into paying ten to fifty times the actual value of the business idea, equipment, or whatever it is they are trying to get you to buy.
Before putting any money into a franchise, you should investigate everything completely. We've prepared a list of questions you should be asking, and should get satisfactory answers to before investing.
1. Has your attorney studied the franchise contract, discussed it completely with you, and do you both approve it without reservations?
2. Does the franchise require you to take any steps which are either illegal or even border on illegal, or are otherwise questionable or unwise in your state, county or city?
3. Does the franchise give you an exclusive territory for the length of the franchise period, or can the franchisor sell a second franchise in your territory?
4. is the franchisor connected in any way with any other franchise company handling similar products or services?
5. If you answered yes to the above questions, what is your protection against the second franchising company?
6. Under what circumstances can you end the franchise contract, and at what cost to you?
If you sell your franchise, will you be compensated for your goodwill or will it be lost to you?
8. How many years has the firm been offering you the franchise been in operation?
9. Does the company offering you this franchise have a reputation for honesty and fair dealing among its franchisees?
10. Has the franchisor shown any certified figures indicating exact net profits of one or more of its members, and have you personally checked the figures with these people?
11. Will the franchisor assist you with:
a) A management training program;
b) An employee training program;
c) A public relations and advertising program;
f) Merchandising ideas?
12. If needed, will the franchisor assist you in finding a suitable location?
13. Is the franchising firm adequately financed so that it can carry out its sated plans?
14. Does the franchisor have experienced management, trained in depth?
15. Exactly what can the franchisor do for you that you cannot do for yourself?
16. Has the franchisor investigated you carefully enough to assure itself that you can successfully operate a profit to both of you?
17. Does your state have a law regulating the sale franchises, and has the franchisor complied with that law to your satisfaction?
18. How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?
If you can get the answers to each of these questions, and those answers satisfy you, then you're probably thinking about buying a pretty good franchise deal. However, if you're in doubt about any of these points, be sure to check it out and know the answers for certain before you invest or sign anything.
Buying a franchise can give you a measure of security, and in some cases, sure-fire profits. Business surveys show that fewer than 20 percent of all franchised businesses fail. This is in comparison to a 60 to 80 percent failure rate for ALL new businesses started in this country each year.
Information regarding specific franchising ideas can be found in the franchising directories, which are generally available at the local library. Often there will be a notice posted in franchise outlets themselves.
If you can afford the entry into this business, statistics are on your side. You are now armed with some CAUTION and STOP and GO signs!