How To Raise Capital For A Business Besides Borrowing From The Bank

The only way to move on is to accept, and we will acknowledge the economic recession hit us hard. You can tell our economy is not what it used to be and the unemployment rates remain at an all-time high. So many people are trying to make ends meet at whatever cost, and that’s why many have given up on the dream of relying upon cooperate America. But even though the market is open for small business, there’s just one hurdle that’s barring everyone from becoming an entrepreneur: Having access to the required amount of capital.

For the longest time, possible commercial banks used to be the go-to source for those looking for an infusion of cash. But just like every other financial institution, they’ve been walloped by the economic meltdown. Quite frankly, you could say no one got spared when the financial tsunami wiped out everything on its path. Not even the lending institutions! It’s now difficult to get loan approval, and if you meet the underwriting standards, you won’t get the money fast enough. And that’s why not many people still consider banks an option.

The numbers even speak for themselves. The Small Business Administration has a 7(a) loan program that’s in place to aid those looking for funding for various ventures. However, for the past couple of months, things have drastically changed. If the SBA’s 2009 fiscal year reports are anything to go by, you could see the program had a thirty-six percent decrease in the loans made compared to the previous year. That only accounts for 44,221 that banks were willing to offer to individuals who wanted to either start up a business or expand it.

We know such numbers can be discouraging especially to a person who’s aspiring to be a business owner one day, but things are not as grim as they seem. Bank financing is not the only route you can take if you’re looking for ways to fund your startup. Fortunately for you, we’ve drafted this piece to walk you through your options.

 

Alternatives to bank financing

Factoring

If you already have a firm and you’re looking to expand, one sure way of acquiring capital is by selling some of the receivables at a discount, of course, so that you can get the cash up-front. It’s one method used by companies with poor credit or those that have to fill orders before receiving payments.

The downside is, this avenue is somehow expensive if you do your math right. If as a firm you want to sell receivables you also have to settle a fee which is a percentage of the total amount. So let’s toss in a hypothetical scenario here and say we want to get funds a month in advance at a three percent fee. Once you do your calculations, you’ll find out that it’s an equivalent to an interest rate of twenty-four percent every year which is ridiculous.

 

Consider Tapping Into Your 401(K) Plan

Did you know that the retirement nest-egg can be a source of fund? Not so many people want to roll the dice on this one, but those who’ve utilized it in the past have confirmed that it can make a huge difference. And if you’re worried about the law, you ought to know that the ERISA law supports any individual who wishes to spend the existing 401(k) funds on business without incurring penalties. Sometimes this money is never enough, so it’s wise to look for more money elsewhere first to supplement it because if you start a business with inadequate capital, you’ll surely fail miserably. Invest in a firm that you have control over so that you can diversify part of your retirement holding outside the stock market.

 

Friends And Family

One way of keeping things ultra-simple is by involving family. For one, these are people you trust, and the feeling is most likely mutual, so they will be willing to give you a helping hand. But it might not be the best method considering you’re putting their financial future at risk by turning them into creditors and jeopardizing significant relationships.

If you’ve tried everything else and you feel like that’s the last resort then at least go in already having a well-thought-out business plan. Don’t serve your financial health at the cost of your families and end up straining those relations. Treat them like you would do any other investor and draft a legally binding contract to avoid any misunderstanding.

 

Give Crowdfunding A Shot

If you haven’t heard about it, then you’re probably in the wrong line of business, pal! It’s the newest craze in town, and this popular concept is how businesses today raise funds. It’s an umbrella term that covers various types of funding from sources all over. Alternatively, we can look at it as a charity extension sponsorship page where regular people in the world of business come together on sites such as Kickstarter, Crowdcube, or Indiegogo, and raise money for startup projects.

Since the donors on these platforms are private citizens, they rarely grill or set strict conditions for the borrower as opposed to an angel investor. Furthermore, you can take advantage of the site and start marketing through word-of-mouth.

 

Peer-To-Peer Loans

Talk about business financing, and right away the newest kid on the block pops up. Yes! We’re talking about this type of lending. For it to work, we have to have intermediaries in between those willing to supply funds (investors) and those in need of them (borrowers). Lending Club and Funding Circle are just but few of the sites that usually act as an intermediary.

As a borrower, you can quickly get access to capital if you choose this channel since we even do have sites that provide feedback on your status in as little as 24 hours. Unfortunately, to get a favorable rate you have to have an impeccable credit score.

The bottom line is the economy is still rebounding so getting bank financing is proving to be a real hassle. Opt for some of these methods but remember to look at the downside before signing any dotted line.

 


 

The Pitfalls To Avoid When You Are Starting A New Business

Starting a business can be dicey especially for those who haven’t tested such waters. A small mistake can be enough to sink the entire ship even before it leaves the shores. In fact, it’s believed that if a start-up can survive the first five years, then the probability of it succeeding right away increases to 90 percent.

It’s not unusual for an entrepreneur-to-be to get fired up at the idea of owning a business. Many have said there nothing new to the world these days so if you can come up with something unique or different and successfully launch it then you must be a genius. All you have to do before turning this idea into a reality is to take a step back and note some common mistakes your predecessors have made in the past that have plagued their new businesses.

Why don’t we start by looking at some of the pitfalls that you need to avoid if you wish to be successful in your newly curved niche? Just remember, you have to know how to deal with them before they become part of the issues that will bring your business down crumbling.

 

So, what should you do or not do if you want to triumph as an entrepreneur?

 

  • Adequately Research

For some reason, budding entrepreneurs usually think the next course of action once they experience that light bulb moment is to immediately plug in without doing their homework and learning what to expect. You’ll be undoubtedly excited or enthusiastic during this period, but that shouldn’t be an excuse for you not to be reckless or jump into business blindly. Find out whether there’s an audience for this idea or if a different entity is already operational on the market with the same concept or something remotely close to it.

You have to increase your odds of succeeding, and the only way to do that is by doing copious research before starting. First, it’s critical you figure out what you’ll do that’s different from other firms in the industry that offer the same good or service. Then, go online and listen to the social media noise. Find out why some clients are not happy with what they are getting. Carry out surveys and ask people what they want because, with this data, you’ll be well armed to fill in that gap and adapt to the market.

 

  • Mimicking One Great Idea

Take social media applications, for example, or dating apps. Just because Tinder was so successful doesn’t mean that if you come up with something slightly similar but different you’ll automatically make the list of the wealthiest people in the world. No, seriously buddy, you have to conceptualize something different because you’re bound for failure if you think that would work. Plus, you’re obviously an intelligent person so why would you want to imitate an idea that’s already out there?

Instead of battling with such big names in the industry, look into some of the things the firm doesn’t offer and use that to create your product. By satisfying the unsatisfied need, you’ll have succeeded where others have failed.

 

  • Being Rigid

Hypothetically, what would you do if you realize despite the progress you’ve made with the business, there’s still a flaw in the system? Do you keep on going and assume the issue will resolve itself or do you look for ways to deal with it? Many people will naturally opt for the easy way out. They’ll just continue operating and hope everything will be okay as the business catches up to the market demands. If you go down that route, you’ll kill your baby even before it becomes a teenager.

Therefore, if you find out that the suppliers, for instance, have suddenly increased their product prices and this negatively affects your profits, fall back and regroup. Don’t just trudge forward without thinking. In this kind of situation, the best move is to take a pause and figure things out.

 

  • Not Marketing

And this also touches those who haven’t adequately marketed their efforts. As a budding entrepreneur, you have to dedicate a lot of time and money if you want your start-up to catch up with the rest of the firms on the market. Depending on ostensibly free options such as Facebook promotions, Pinterest, or through your website is a mistake that will, without a doubt, cost you a lot.

To get visibility, you have to be ready to dedicate many hours to all these sites and many more platforms. Writing is an artistic talent not everyone in the world gets blessed with and that’s why you shouldn’t shy away from hiring a professional who’s excellent at blogging.

 

  • Investing Less Capital

You’re either all in or out. You can’t choose to sit on the fence and see how things pan out before deciding which side to fall. On many occasions, we’ve seen people fail to succeed just because they were afraid to take that leap of faith and invest the required amount. How will you get yourself a skilled web developer if you don’t have enough money to pay them or that which they’ll need to set up a standard website? You have to be pragmatic when setting up a business if you yearn for success.

 

  • Forgetting Who’s The Boss

Understandably, you’re a novice in this industry so you might not know how everything works. We want to let you in on something that will probably shock you.

And that’s the fact that today’s market is more consumer-centric. A purchaser can now make an informed decision based on the online reviews available on the internet. Simply put, technology has completely changed the world.

Congratulations are in order if you’ve started a company and made something out of yourself. However, always bear in mind that in the next couple of days you’ll have to be tenacious and creative if you don’t want to fail in your new venture. By avoiding these pitfalls, you’ll be on your way to greatness!

 


 

Guidelines On How To Grow Your Business

Statistically, new businesses tend to fail within the first couple of years. Even though this might be due to several reasons, the primary issue is the lack of knowledge and expertise required to plan for various operations and maintain a steady growth curve. While some startups fail just because the owner couldn’t keep up with its growth rate, others crumb due to lack of proper channels to offload excess inventory. The market demand directly doesn’t meet the supply, and thus the owner will have to sell at a loss to lure more customers.

You have to have a specific skill set for you to succeed in today’s business because so much as changed compared to the old days. A budding entrepreneur has to be flexible, be able to plan efficiently, and have exceptional organizational skills. It’s not just about turning on a computer and opening the doors for the clients. For the business to grow at a steady rate and maintain that growth, you have to comprehend all the economic parameters that affect the firm.

 

Let’s Look At How You Can Grow Your Business:

Have A Company Mission And Stick With It

What would you be if you never knew what you want to do, or who you want to become in life? Life immediately made sense when you knew what you were supposed to do, right? You had to have a direction so that you could set goals and strive to achieve them. It’s the same thing with business. It’s the baby, and you’re the parent so guide it by creating a strategic direction.

You might face obstacles along the way while trying to stick to it but your company is not the first one to bump into all those hurdles. Nearly all of the multinational corporations have been there, and now they are dominating the marketplace. Therefore, if you need to survive, do so by rolling with the changes and adjust mid-stream. It’s crucial to keep the changes to a minimum because you might lose customers if they get wind of the fact that your company might be going through a rough patch.

 

Develop A Strong Bond With Your Product Consumers And Suppliers

What’s significant is the long-term viability of a business. One cornerstone of any successful company is the trust or loyalty the entity has to its customers. And the same applies to the suppliers. Like a food chain in an ecosystem, when one organism gets affected the entire system goes into an imbalance. You have to bond well with your clients and suppliers.

 

Hold Your Staff Accountable

Once you hire an individual, you have to give them proper training before letting them work without supervision. By investing in the training process, you’ll be ensuring the business has a strong team ready to tackle issues that might arise in future.

It’s also significant to recognize their efforts from time to time by rewarding or promoting them. Treat them the same way you do your kids.

 

Strive To Create A Loyal Employee Base

You want to keep the employee turnover at moderate levels otherwise you’ll spend most of the company’s recourses retraining new staff. A loyal workforce is essential to the long-term goal since it helps you to stay relevant on the market, and assists the business to maintain the momentum.

 

Never Compromise On Quality

Honestly, this shouldn’t even be something worth debating. The only reason why we thought it wise to mention it is because we feel like business owners might be tempted to look for shortcuts during production since our current economy is still stumbling. Cutting on expenses seems like the logical way for the firm to stay afloat but if you go down that road, you might lose some of your most loyal customers. To reduce the cash outflow, consider cutting the wages, or freezing the hiring process. It’s not easy to gain a customer, so if you lose them, that will be on you.

 

Be Creative

Now that you’ve identified a need that’s unsatisfied on the market and managed to fill that gap, you have to keep looking for new and innovative ways that will make you stand out from your competitions and stay relevant. Always have an open mind and be on the lookout for new ideas or approaches that can help your company in one way or another.

 

Consistency Is Critical

The only way to continue making money is by being consistent. A customer will want to buy your product instead of that offered by the competition because what you’re providing has the best quality and is in the right quantity. That’s what they will expect the next time they want to buy the same product. So if they go to the store and find out that you compromised the quality or reduced the quantity, they will channel their frustrations by purchasing from the competition.

 

Know The Risks And Rewards

An entrepreneur who’s not ready to take calculated risks is not business oriented. You have to be prepared to roll the dice once a while if you’re ever going to succeed. Figure out what the worst-case scenario is and if it’s something you can live with dive in without second-guessing yourself. You can generate tremendous rewards that can propel your company to greater heights.

 

While Focusing On The Value, Compete With The Price

Being flexible with the pricing is okay. Just don’t lower it below the market value with the intentions of luring more customers and in the process running other firms out of business.

Go out there and try to find out what goes on in a consumer’s mind as he or she debates which item to take based on the pricing. Your business will only stay operational if the customers pay you and not the other way round.

Starting a business is not a walk in the park, so you have to make sure the company doesn’t close down. Apply these tips in your trade and see how quickly your startup scales the heights of success.


The blind tiger ale house

In the city of New York sits The Blind Tiger Ale House, a bar that has lived up to its reputation by withstanding the test of time, since its establishment thirteen years ago. Previously located at Hudson Street before star bucks displaced it, The Blind Tiger was a New York beer scene OG long before craft beer entered the lexicon. The house has a meticulously curated program, and the best bar food has earned it legendary status in the industry. Greenwich Village has been its current residence since 2006.

Word on the street is that the term ‘blind tiger’ originated in the 1800’s when blue laws restricted the sale of alcohol. You know, while providing complimentary alcohol, the owners charged a cover so that they could be able to see a Blue Tiger, or any other imaginary attraction of sorts. Most blind tigers were cheap disreputable nightclubs or dance halls while Speakeasy more often served food and entertainment.

What you’ll like about Blind Tiger is the ever-changing array of craft beers, and a refreshing wine selection complemented by food from an acclaimed kitchen. Their brewers can be likened to artists while they get represented by the gallery. As a mainstream observer, you’ll realize how committed and passionate the Blind Tiger team is, not to forget brilliance.

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Gramercy Tavern Hotel

Located on 42 E 20TH Street in the Flatinor district of the Manhattan area, New York (View Map) this restaurant is one of the finest dining places that I have ever had the privilege of sampling. It has two amazing dining experiences; the Dining Room and the Tavern. The restaurant patrons have the option of making a reservation as well as a walk-in service. The founder of the hotel is the legendary restaurateur Danny Meyer, and it was opened in 1994. It sits in a significant landmark building. It has a great design that was created Bentel & Bentel, Roberta Bendavid gives it its fresh floral arrangements and the murals were done by renowned artist Robert Kushner; These features alone, sets it apart from your normal hotel within Manhattan.

When I moved to Manhattan a year ago, Gramercy Tavern Hotel was the talk of the town for its exemplary service not to mention mouthwatering and carefully prepared dishes. That is why I had to have a taste of its hospitality.

A month after I had moved in, I convinced my friend to take me to the hotel; from the entry to getting a sitting space, we received the best service as compared to the most walk in restaurants around. We chose to sit at the Tavern. Pizza is my favorite any day, and so we made our orders as we sipped a Pinot Noir red wine as recommended by our server. Indeed she was right; the wine was smooth and sweet just as we wanted it. Our pizza arrived on time and ooh boy! It smelled and tasted like nothing I had tasted before. I enjoyed every piece of the pizza. We almost ordered for another!

Since then, I pop in at the restaurant whenever I crave delicious pizza since it is just a short distance from where I live. Every time I go there, they never disappoint me. They serve hot pizza just the way I like it. The pizza includes diced jalapenos, vegetables, cheese, tomato sauce, and mushrooms. You can choose to take it down with a glass of Pinot Noir, Georges Descombes or even Rose wine like Triennes.

Michael Anthony and Danny Meyer are the Chefs you are likely to find at the restaurant any day. They work hard to ensure that you eat tasty meals whenever you come to the eatery. Other patrons at the restaurant love it for its chicken and steak.

The hotel’s client-oriented model is the one thing that makes Gramercy Tavern hotel different from all the other hotels in the Manhattan area. The service is five star and will make you want to visit again and again. The attendants are well groomed, polite and very helpful; they will ensure what you ordered is what you get, not to mention that everyone pays attention to detail.

I love every moment I am in this great hotel.

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