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4 Creative Ways of Financing Your Startup

Every time I run into an old acquaintance or even look on social media, I see someone else who has decided to start a business. There are around 1 million people every year who decide to take their skills, talents, and passions and jump into the scary world of entrepreneurship.

If you find yourself becoming a part-time or full-time business owner, you may find yourself in need of financing.

The Necessity of Financing Your Startup

Not everyone who starts a business will need to raise a lot of capital before getting started. For some, the nature & structure of the business will mean that little investment is needed – many people are able to “set up shop” virtually and use profits to fuel growth.

However, many will need to raise a significant amount of money before being able to sell their goods or services. There are a lot of things to consider when it comes to starting a business – legal matters (licensing, registration, permits, etc.), advertising, inventory, salaries, lease costs, taxes, insurance, customer service, online presence, and many other things that may be specific to your industry – and many of those things will require a serious investment in order to set them up properly.

Even though it’s up to you to determine how much and how early you will need to invest, allow me to give a word of advice: Don’t go the cheap route on things that can save time or money in the long run! You want to set your business up properly, legally, and efficiently, and while you may be able to cut costs here and there, being too “cheap” in these areas will only lead to regret down the road.

The Struggles of Financing Your Startup

Even though you may have a great vision for your business, not having the capital needed to get if off the ground can stop you in your tracks! There are a few ways to get the money you need that will require some patience and sacrifice. You could:

Work for It

If you are able, a second job is a great way to build up the funds you’ll need to get your business off the ground. This is a huge sacrifice if you have a family, and it will draw you away from the time you are spending on business planning. If you are able to juggle your responsibilities, the short-term job could get you on your feet faster.

Ask for Help

Getting investors on board with your vision saves on the stress of a second job, but can be difficult for those who don’t necessarily like selling themselves. In the last few years, sites like Go Fund Me and kickstarter have been really popular for different projects.

Also, the people who know you best may be the ones who are most financially supportive in getting your business off the ground because they already know and trust you and believe in what you are doing.

Borrow the Money

On top of trying to seek out investors who would take a stake in the company in return for seed money, you can also look for banks, companies, or individuals who are willing to simply loan you to money in return for a set interest rate.

Lending Club and Prosper are two services that link up borrowers with investors (they are investing in the loan, not your business), offering lower borrowing rates by cutting out some of the overhead needed by traditional banks. Many people may choose to borrow the money to finance their startup by using credit cards. According to the Small Business Association, over 65% of small businesses use credit cards on a frequent basis!

A major difference between getting an investor and simply borrowing money is that the one who loans you the money usually expects repayment to start within a month or two of the loan; whereas, an investor is usually willing to wait for multiple years before expecting a return on their investment.

Sell Your Valuables

Another option is to sell things you have to get the money you need for your endeavor. A lot of us have items that are of value to someone else that we would gladly part with in order to start a business. It’s time to let some of those things go!

We may not always want to part with expensive items or with belongings that could be considered “status symbols”, but when it comes to being able to finance your business it still may be worth it to sell your watch, to avoid paying interest or having to share your profits with someone else down the line.

Remember, you aren’t trying to find a way to make sustainable income in this stage – that’s the purpose of the business, right? – you are just trying to find a way to get your business off of the ground. In those situations, you have to ask yourself if you’d rather have that item or a business that has a good foundation and is growing.

Environmentally Friendly Ways to be Entrepreneurial

By // by Khaleef Crumbley

The terms entrepreneur and eco are not always synonymous, although recent years have led to a rise in the adherence of eco standards in business. If you are thinking about starting a business and want to still prioritize our environment, you are in luck. More and more customers opt for environmentally friendly companies, so it’s becoming easier to save the planet while still making a good business decision.

Arguably, so long as you address carbon consumption and embrace carbon neutrality, then a business in almost any sector can be environmentally friendly. Here we look at some of the best options for being environmentally friendly and entrepreneurial.

Offset Carbon

There are several ways to offset your company’s carbon consumption. Many of these can be encouraged across the company, to create a culture of care for the environment. This includes switching monitors off overnight, and having lights which switch off after a certain amount of time, along with ensuring the building is well insulated, to keep in the heat during the winter and out in the summer.

Ensure that company cars are low emission and staff are trained on how to keep emissions low through sticking to speed limits, etc.

Work Online

Anything from copywriting to web design and accountancy to admin can be done online, which means remote working. This cuts down on carbon emissions in travel to and back from work, reduces overhead due to less people commuting.

Monecor’s Spread Betting is one way to make money through digital platforms, by simply working from home.

Reduce Paper

Wherever possible, keep everything stored on a cloud system and therefore remove or significantly reduce paper copies. Encourage staff not to print unless it’s really necessary.

Digitalize all resources, banking and invoicing, and ensure that you use recycling services.

Consider Using Solar Panels

If your business is of a certain size, then you may be able to use solar panels, which will reduce electricity bills, and in some cases you can even sell excess energy back to the grid and make money.

Installing solar panels does involve an initial outlay, which is why it’s best to seek financial advice about the size of the company.

Reduce Water Consumption

Depending on the nature of your business, you may not need to use a lot of water, but fostering a culture of ensuring taps are turned off, washes are put on eco settings, and water is not wasted are behaviour changes that make a difference to the environmental soundness of a company.

There are many other things that you can do to be friendly to the environment without sacrificing your bottom line. Hopefully, this post has given you a few ideas on how to move your business down this path.

No-Credit Loans Are Helping Millions of Small Businesses

By // by Khaleef Crumbley

Owning a small business is not supposed to be easy. If it was then everyone would do it. But trying to run a small business with no credit or poor credit can be nearly impossible. The pressure of trying to pay bills and grow a business without credit has undone a number of entrepreneurs.

Part of the problem is the fear that having no credit or bad credit induces. Many business owners in this situation simply put on blinders. Convincing themselves that if they can make enough money they can work their way out of this situation.

While making money is important, it also takes money to make money. So not having the flexibility to get extra cash fast can force a small business owner to be too conservative in their approach. Eventually missing opportunities when they come knocking.

However, it does not need to be like this. A number of lenders who specialize in no credit loans have come on the scene in recent years. Lenders such as the San Diego-based Mulligan Funding, provide loans based on cash flow, not credit scores.

These loans can be used for working capital, inventory or even equipment purchases. Repayment is often flexible and can be made based on a percent of the day’s receipts. This allows a small business to borrow with confidence as they don’t have the stress of struggling to make a monthly payment.

Other advantages to a small business owner with no credit or poor credit include faster application and approval. In the case of businesses with no credit, the loan amounts tend to be smaller and are often used for emergency purchases or ramping up for a growth opportunity. As such, business owners need financing options which can be approved in a matter of hours, not weeks.

While these sorts of programs are not new, ‘alternative lending’ has only made it onto the mainstream in recent years. This was brought on by the financial crisis which saw banks and other financial institutions reduce their leveraged lending and small business activities.

In many ways, this was a blessing in disguise as mega banks are not well equipped to deal with small businesses, even when the owners have perfect credit. The void created by the withdrawal of banks has created opportunities for more flexible lenders to take their place.

Some of these financing options have been caught up in one of the hottest investment trends the world has seen since the dot.com boom of the 1990’s. That is Fintech. Don’t take my word for it. This New York Times article profiled how these lenders helped a small business owner when banks wouldn’t.

For small business owners with no credit or bad credit, these lenders have been manna from heaven. All they need is a business banking account, cash flow, and in some cases a merchant account – used for processing credit card payments. With these, a small business owner can get as little as $1,000 or more than $250,000. Granted the amount will depend on a number of variables, but this means that business owners with no credit now have place to turn to.

Another plus for small business owners is the sheer number of funding options out there. The commercial credit agency, Dunn & Bradstreet, has an excellent website called Access to Capital. This site provides in-depth information about a number of programs on the market today and even has checklists on what you will need to prepare for a potential lender.

This sort of information is extremely beneficial for a small business owner with no credit or bad credit as they can educate themselves about the options on the market today and how to apply for them. As such, the fear that comes with having bad credit or no credit fades away and the business owner can make decisions based on what is best for their business.

In the end, millions of small businesses with no credit or bad credit are finally able to get the funding they need to grow their businesses. This helps to strengthen our economy and our communities as these businesses will be able to grow, hire more people, and maybe even change the world.

The Teenpreneur Conference

By // by Sherrian Crumbley

A few years ago we had the opportunity to meet Eva Baker from Teen Got Cents and we are glad to call her a friend, as well as being card-carrying members of her fan club! She is an exceptional young adult who, through her blog and community activity, educates teens (and adults) on personal finance topics. Most recently, she has been working really hard on the first Teenpreneur Conference.

TEENPRENEUR Conference? Really?

ABSOLUTELY! Two things we are passionate about here at KNS Financial are (1) That younger people be educated about handling money, which includes building wealth (2) The importance of encouraging entrepreneurship as a viable option for anyone!

If you have a teenager who is currently running their own business, or needs to be inspired to do so, this conference is for them! I can not stress how necessary it is for them to be surrounded by like-minded peers to motivate them about their ideas and aspirations.

I Think You Need A Little More Convincing

Check out these statistics shared on the Teenpreneur Conference website:

Since 2012, there has been a general decline in the number of students learning about business and money at school, especially in grades 5-8. – Gallup-HOPE Index

…a tough economy, increasingly competitive college market, expanding networks and shifts in technology – is creating a culture of innovators. Some people call post-millennials Generation Z, but I think a more appropriate moniker would be Generation (I)nnovation. – Harvard Business Review

In 2014, 4 in 10 students (42.1%) in grades 5-12 planned to start their own business. – Gallup-HOPE Index

If your teen is interested in taking their business to the next level, or considering starting their business, this is a wonderful opportunity to see what other teens are doing, thinking, and building.

Check out the website. All the conference information is detailed there! Parents, there are sessions for you too. You and your teen won’t want to miss it!

6 Steps to Creating a Successful Home-Based Business

By // by guest

There are all sorts of people ready to tell you how to be successful at creating a home based business. In some cases, many of the same suggestions are shared.

The following are some standard, but extremely useful steps to creating a successful home-based business.

1. Create a Work Environment that you can Work in

Imag via Flickr by Martin Terber

It might require purchasing some professional office equipment and furniture, but put together a work space where you feel comfortable and able to function. Be sure the equipment is both what you need and as ergonomic as possible.

You’re going to be spending a good deal of time in this room and you don’t want to suffer because you provided yourself with substandard work essentials.

2. Keep Overhead Costs Low

Depending upon the business you create for yourself, there could be a fair amount of overhead. Keeping the amount of overhead at the right balance is critical. Remember, it’s not how much money you make, it’s how much you keep.

Working from home has its advantages, but preventing bankruptcy isn’t necessarily one of them. You can over extend yourself if you’re not careful, particularly in overspending in technology.

3. Remember to Spend some Time On your Business

Most people work in their business, forgetting to work on their business as well. A home based business usually consists of one person – you. As such, it’s easy to get caught up in the operation – the product or service delivery. But you must also remember to allocate time to working on your business also.

That includes finances, vision, strategy, marketing plans: the infrastructure. It’s the difference between being successful and just making it through each day.

4. Increase Your Skills and Education

If you were in a business working for someone else, you would probably attend training and education seminars. It’s important to keep the axe sharp, and the same goes for home based businesses. Gain as much education as you can; attend groups that focus on the same business as the one you’ve started; even go back to school.

Entrepreneurs are well served by getting an online MBA AACSB. Consider this seriously as its worth more to you to invest in yourself, since in many ways, you are your business.

5. Work on Your Branding

Many home-based entrepreneurs don’t understand the importance of creating a positive, powerful identity for their business. A good brand will include confirming your credibility, delivering your message clearly, motivating buyers, connecting with prospects on an emotional level, and finally, securing user loyalty.

6. You Work From Home – Not At Home

This is hard thing for many at-home workers to put into practice. You may work from your home, but you also live there. Be able to separate the two. Set time limits so that you “come home” and everyone understands that your “at home” time has begun. Keep at home time sacrosanct.

Starting a home-based business can be tricky and requires all the expertise of any entrepreneurial enterprise. Learn from other’s mistakes. Get more education. And have the confidence to push through until you’re successful.