Zebraheard

Helping entrepreneurs turn ideas into a business

Entrepreneurs – Keep the “WELL” full!


There is a saying, “Don’t wait until you are thirsty before going to the well”. Unfortunately, entrepreneurs, when starting a business often lose sight of their current business relationships and ignore networking to develop new ones. As the saying above indicates, you should not neglect your network of business relationships. It is critical to your success and your business success to keep active in your industry, and community.

You are excited about your new venture. This is understandable. However, in your excitement to launch a business you must not forget to keep attending networking events. Take someone new to lunch. Not just once a month, but several times a week. Networking is as much of launching and sustaining your business as is building a web site, but often overlooked.

An article that illustrates this very point is http://tiny.cc/islua. This site underscores the necessity to stay connected and gives you guidance on how to continue networking.

 

November 29, 2010 Posted by | Entrepreneur | , , , , , | 1 Comment

Election is Over – Let’s Create Jobs!


 

Jobs

Job Creation

The election results are in and it has been almost a week since it became clear that the public wants job creation to be a top priority.  It appears the message was heard by the White House as exhibited by the White House leveraging the Monster.com community to communicate with job seekers using Monster’s Facebook Page.  More on this action by White House can be viewed at http://tinyurl.com/2gxgsf8Although it is admirable the Administration is seeking the comments of the unemployed the facts indicate that successful job creation must focus on developing an environment conducive to entrepreneurship.

One fact emerges with clarity. Start-ups and young companies dominate net job creation in the United States – and have done so for the last 30 years as stated by The Kauffman Foundation in press release in September 2010 http://tinyurl.com/3433xpf.   If that is the case then why, has so little been done to encourage and support current and would be entrepreneurs?

In all fairness, perhaps initiatives have been implemented that are not immediately clear. Let me offer an apology in advance if that is the case. However, I suspect that is not the case. Too many years have come and gone with entrepreneurs struggling for the assistance and help needed to facilitate and transform their ideas into viable businesses. The current crop of politicians along with the newly elected could help job creation by quickly ( I know –  what am I saying?) creating legislation that is favorable to business, current and future.

If the preponderance of jobs are created by start-ups and emerging companies common sense dictates that we provide the requisite resources for entrepreneurs to succeed.   

November 8, 2010 Posted by | Entrepreneur | , , , , , , | 3 Comments

CAPITAL FUNDING OPTIONS FOR ENTREPRENEURS


  

 

Dollars

Funding Your Business

As they launch their business entities, entrepreneurs frequently have trouble grasping the various types of capital funding they may be able to secure to run their business operations. The following piece explores several of the more frequently utilized capital sources and discusses the positive and negative aspects of each type of funding.

After you have concluded that your business is in need of external funding, you must determine which kind of funding source to seek. There are several options available to business owners, and all of them come with good and bad elements. Let us now investigate the available choices as well as our impressions of the benefits and drawbacks of each one.

Per usual, it is my suggestion that you consult with your accountant and attorney with regard to these kinds of matters.

Bank Lending

Many refer to this as debt financing. Under this type of arrangement, you will be indebted to the bank for money borrowed. The loan terms will determine the amount of interest which will attach to the principal amount you must repay to the bank. Debt financing can be used at various stages of a company’s evolution, from its earliest days to the time it reaches full capacity. Different phases of a company’s lifespan will call for different loan terms, based on several factors.

 Positives:

* The business will remain under your ownership and control.

* You will be able to deduct from your taxes the interest paid on this kind of borrowing.

Negatives:

* Collateral is likely to be a requirement for securing this kind of funding.

Factoring of Accounts Receivables

This is an alternative which many fail to consider. This is an option offering you instant cash availability, though it will require or strenuously recommend that you sell a portion of your accounts receivable to a factoring firm, which works to collect money from your customers.

Positives:

* This is perhaps the quickest method of obtaining funds.

Negatives:

* Should you have customers who are unwilling or unable to pay money owed, you will be responsible for paying their outstanding balance.

Friends, Family and Acquaintances

This is an alternative in which a business owner turns to friends and family to provide money for their business enterprise, ranging from a small amount to several thousands of dollars.

Positives:

* There is no trading of equity for funding.

Negatives:

* Possibility of harming relationships with friends and family members.

Revolving Credit Card Usage

While there are surely cases in which a business owner managed to succeed through funding his or her operations with credit cards, this is, to my mind, one of the last alternatives a business owner ought to select. However, the option does exist, and the fact that it is selected fairly often merits further exploration.

Positives:

* There is no security requirement.

Negatives:

* This type of borrowing can easily get out of hand.

Borrowing Against Home Equity

Prior to the recent economic downtown, this was an appealing possibility for many. But, in recent years, this type of solution has become far less available. That is not to say that you should forget about the possibility altogether, but banks are sure to have fairly stringent requirements in place. At the time this article is being produced, banks still require good to superior credit in order to grant credit to applicants. With that stated, we should examine the positive and negative aspects of this solution.

 Positives:

* If you can gain approval, you may secure a longer term loan at a more advantageous interest rate than several of the other alternatives discussed.

Negatives:

* Your home is at risk should the business fail.

* If you have a spouse, he or she will likely need to serve as a signatory on the loan as well. You may think this is not a problem at the present time, but what happens in the event of divorce? What would happen with the loan? It is my suggestion that you speak honestly about this possibility in advance in order to avoid potential difficulties in the future.

Assistance from Angel Investors

Angel investing is a funding method which is frequently misunderstood or overlooked by entrepreneurs. But, if you can show evidence of a great concept, a solid management group, the ability to endure, as well as a viable exit strategy, it is possible that you will be among the 1-3% to win funding.

 Positives:

* These investors are ready with the money necessary to launch or build your fledgling business. The total funding amount will be disbursed incrementally. Different angel groups prefer different levels of direct oversight. It is likely that they will require a position on the company’s Board of Directors.

Negatives:

* You will have to trade a portion of your business in exchange for the investment you receive. What proportion of the business you must trade will probably be determined by how much money you receive from the investors and the level of risk they have assumed. Keep in mind that investors are concerned with making money. You must conduct an appropriate amount of research in advance. It is vital that you seek the expertise of attorneys and accountants before you enter into any agreements.

The Bottom Line

 It can be difficult and taxing to obtain business funding. This article has explored several alternatives open to entrepreneurs. You must always conduct due diligence when considering possibilities. After you have narrowed the options a bit, talk things over with your lawyer, accounting, business acquaintances and professional contacts. Remember that you have various alternatives, and do not necessarily need to choose one to the exclusion of all others. You must always make decisions carefully, taking all of the negative and positive aspects into consideration.

Author Box

Brenda Collins is a seasoned business coach with vast experience helping entrepreneurs launch and nurture new business enterprises. Ms. Collins’ background includes collaborations with firms of all types and sizes all over the globe. Most recently, she worked with a successful launch within the internet technology business sector. Focusing on business strategies and marketing techniques, she has collaborated with politicians, entrepreneurs, venture capitalists and angel investors to help fledgling business owners secure funding opportunities.

Her interest in aiding business owners began long ago. She started as an employee in her father’s business while still quite young. “My background is almost entirely based on my experiences with business owners,” says Ms. Collins. She believes that the education she received while earning a teaching degree from the University of Cincinnati has been tremendously helpful in her work with entrepreneurs. Ms. Collins’ most recent project involves serving as an owner and founder of a web-based group named Zebraheard –Turning ideas into businesses. The Zebraheard group is an extremely valuable outlet for anyone contemplating launching a business. She is always accessible through the main social media sites including Facebook, Twitter and Linkedin. Anyone desiring to connect with Ms. Collins to discuss business issues can write to her at bcollins@zebraheard.com.
 

November 4, 2010 Posted by | Entrepreneur | , , , , , , , , | 2 Comments