Archive for 'New Business'

Selling Business Notes For Quicker Cash

Wednesday, June 24th, 2009 at 10:24 pm  
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In about 85 percent of all business sales, sellers accept a cash down payment and a promissory note to pay the balance in installments. The note is personally guaranteed by the buyer, and it is secured by the business and its assets in case the buyer defaults. Providing owner financing allows sellers to cater to a broader pool of potential buyers.

However, many sellers don’t want to be in the lending business and would prefer not to hold business notes. The good news is: they don’t have to. If you created a business note to unload your company, you can sell the note to someone else. This way you can get instant cash out of the business, instead of waiting to receive periodic payments in the future. You can use the cash for a variety of purposes, including: capitalizing on other investment opportunities, paying off debts, funding college tuition and making major purchases.

How Selling Business Notes Works

Business notes are purchased at a discount—like all notes sold on the secondary market—to make them attractive to potential buyers. Without a discount, there is no incentive for investors to incur the risk of waiting three to five years or even longer to recoup their money. Historically, more than 90 percent of new business owners fail within the first five years. Therefore, there’s considerable risk attached to the purchase of any business note.

You may receive less than the full balance of your note when you sell it. However, the total cash you receive from the down payment and the sale of the note will usually be about the same as you would have received from an all-cash sale of your business. That’s because all-cash buyers can insist on a much lower selling price.

The amount of money you’ll actually receive for your note depends on a number of factors. But as a general rule, for a full purchase, you can expect to be paid 50 to 80 percent of the balance of the note. More specifically, the amount of cash your note can be sold for will be determined by three general components: the current economic environment, the terms of the note (payment amount, interest rate, length of payback, etc.) and the degree of risk or probability that the note holder will lose his/her money.

Criteria for Purchasing Notes

Certain guidelines must be met in order for a business note to be purchased. Naturally, first-position liens are eligible. Here are some other elements investors like to see:

• The business is in a profitable position, with evidence of operating cash flow.

• The buyer has good credit, which generally means a FICO score of at least 625.

• The buyer put down at least 30 percent of the purchase price in cash, which signifies that he/she is truly committed and able to weather down cycles.

• The principal owners have made a personal guarantee on the note.

• The note has been “seasoned,” meaning the buyer has made payments for at least two months. This shows that the buyer is happy with the purchase.

• The note should have a minimum face value of $15,000.00.

Structuring the Sale

There are a number of ways to structure the sale of your business note. You can sell the entire note, or only part of it. The most common way to sell a note is through a “partial purchase,” which involves selling only a certain number of the remaining payments on your note.

Note buyers can purchase any number of the remaining payments in a variety of ways. For example, let’s say you have a note with a balance of $80,000 payable in 240 monthly installments. If you need just $20,000 now, for whatever reason, the note buyer would calculate how many payments would need to be purchased to provide you with that specific amount of cash. Exactly which payments would be purchased would depend on your personal financial situation. You could sell:

• A certain number of the beginning payments on the note. (The note buyer might purchase the first 60 payments, and then you would receive the final 180 payments.)

• A certain number of the final payments on the note. (The buyer could purchase the final 180 payments, passing the first 60 payments through to you.)

• A certain percentage of each of the remaining 240 payments on the note. Perhaps 50 percent of each of the 240 installment payments could be purchased. (You would receive one half of each of the 240 payments.)

So which option in the above example would be best for you? It would depend on your current financial needs and future concerns. All of the alternatives would provide you with an immediate $20,000 cash payment. However, you might choose the first option if you need $20,000 today and require a future monthly cash flow beginning in five years. You might choose the second scenario if you needed $20,000 now and a monthly payment for the next five years until you start receiving your retirement benefits. Or you might choose the third option if you need $20,000 today and also want/need the monthly 50 percent payment for the next 20 years.

The Purchase Process

To purchase a business note, buyers will need to take an assignment of the security instrument (UCC-1 Financing Statement) and receive an endorsement of the promissory note.) But before getting to that stage, they will do the necessary due diligence and closely examine all aspects of the sales transaction of your business. The note buyers will handle all the paperwork for the purchase, from verifying all aspects of the deal and preparing/having recorded all of the necessary documents to make the change.

The note purchasing process takes an average four weeks to complete. If the sale of your business and the creation of the note was “typical,” then you should have your money within four weeks.

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Why Do You Want To Start A Business?

Monday, June 22nd, 2009 at 1:47 am  
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Think about this. What are the reasons you want to start a business?

1. Are you tired of getting nowhere in your present profession? Do you find this really discouraging?

2. Are you looking for a chance to accumulate real wealth?

3. Maybe it’s the tax advantages that you could have from your own business. These tax advantages can add up quickly.

4. Or it could be a dream that you have had for a long time and its now time to get your business started.
Whatever the reason, you need to take a good hard look at what you want to do.

Owning a business has its rewards but it takes a lot of work, but this work is a satisfying work. Why? Because it is YOUR business, no one to report to but yourself and all the important fringe benefits (vacations, cars, retirement etc.) when you succeed in your business. Satisfying work is often so much more beneficial than working at a job that you are not very interested in, not to mention being able to work for yourself instead of for someone else.

Maybe you have the “drive”, meaning you are tired of working for someone else and have the desire to succeed in your own business. The “drive” also means that even if you fail once or twice you get right back up, learn from your mistakes and try again. People with the “drive” usually end up succeeding in one or more businesses. So do you have the “drive”? If you do, first keep this in mind, it’s better to learn from other peoples mistakes instead of making your own. Study what others have done successfully.

Do you have what it takes to be a business owner or entrepreneur?

Ask yourself this, am I an entrepreneur? Am I an individual that will innovate within business frameworks and will I take risks for the sake of potential profits? If you will, then you are an entrepreneur, congratulations the first step in owning a business.

That was only the first step to think about. Also consider some of these questions to help you decide if you want to start a business.

1. Do you know where to look for help?
2. Do you know where to get sources of capital?
3. Do you have a business plan?
4. Can you manage your time?
5. Can you develop a marketing plan?
6. Do you know how to advertise and where to advertise?
7. Can you keep a budget?
8. Can you stay consistent and persistent?
9. Do you think you know it all? Think again!

These are just a few questions of many you need to ask yourself if you want to start a business. However, don’t let these questions bother you if you had answered no to any of them. Answering no is not a reason not to start a business, you just need to look at your strengths and weaknesses and start learning what you need to do to improve yourself.

So why do you want to start a business? I’ll leave that answer up to you!

Written by Ricco Richardson
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How Long Before You Make Money?

Thursday, June 18th, 2009 at 9:15 am  
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With the exception of some not for profit organizations most people go into business in order to produce revenue (income) and profit. Unfortunately, when it comes to a home business, and especially network marketing, many people forget this important point.

In a traditional business, whether a Ma and Pa shop, or a large franchise store like McDonald’s, business owners know to watch their numbers. A business must make a profit in order to survive and, if it doesn’t, adjustments must be made accordingly.

One of the reasons for the high failure rate in small businesses, home businesses, and MLM (network marketing), is because due to the low entry costs and requirements people often don’t treat them like, “real businesses.”

Two things commonly happen:

1) Many people have the attitude that since they didn’t have to invest much to begin with they really don’t have to be too concerned about whether they make money or not, or how soon. Of course, that often ends up being a self-fulfilling prophecy. It’s not just that way with a business, but with many things in life. If you come to own something that cost a great deal or required a lot of effort to acquire you tend to appreciate it more than something of lesser perceived value.

When you consider that network marketing has made some people just as much if not more money than many other traditional kinds of businesses, with incomes of as much as $1 million a month or more being achieved, treating a MLM as if it isn’t a serious or real business is a huge mistake!

2) Because the entry cost can be so low people overlook the cost of not making money, and also have a tendency not to pay attention to how much their other expenses associated with their business (such as trips, conventions, and/or buying extra products or services over and above what you really need) add up over time.

For example, let’s say that you spend $500 to sign up for a new business. Not a lot of money at all, maybe the price of a cup of coffee a day and some change.

Weeks go by, and then months, maybe even years, and you still aren’t making any money. Perhaps you don’t think much of it because, you think to yourself, “I only spent $500 to get started in this business anyway.”

But what are the true cost? Let’s say that in addition to your startup cost you have also been spending $150 each and every month on buying your company’s products and services. (Perfectly ok if you enjoy and use all of the products you buy; not ok if you are buying more than you need simply to qualify for a certain level with your company!) And let’s also assume that you are spending $50 a month on meetings, conventions, or seminars (many people spend much more).

So, even though you really haven’t paid much attention because you only invested $500 to begin with, if your business hasn’t yet started making you money then you are really spending AND LOSING $2,400 a year, in this hypothetical example. And, here again, in reality many people often end up spending much, much more.

Going back to the example at the beginning of this article about a traditional business, like a McDonald’s. Those kinds of businesses often have much higher costs associated with them, such as a store lease or mortgage, equipment leases, payroll, etc. It isn’t uncommon for a traditional business to have to operate for months or years before making a profit.

In contrast — though networking marketing is NOT designed necessarily to make you a very large amount of money overnight — you can and should be able to generate an ever increasing residual income for yourself over time, and starting in relatively short order.

Everyone approaches a new home business differently. Some people prefer to roll their sleeves up and dig right in, expecting to start making money almost immediately. While others prefer to first spend time learning more about their new business, and/or obtaining any available training. So it’s acceptable, if you choose, to take a few weeks or even a month to “prepare” for your new business. However, especially if it is your goal to start making money right away, it is entirely realistic with most networking businesses to start earning viable amounts of money within as little as 30 days.

Certainly within 90 days you will want to start seeing some kind of payoff in return for your efforts. And no more than 6 months should go by without positively starting to see income coming in. In fact, ideally, you should try whenever possible to not only earn enough money to cover your original startup costs, but you absolutely should be making a profit (in other words, extra money) within this time.

If after 30 to 90 days, 6 months maximum, you are not making a profit, you should seriously reevaluate!

To summarize:

1) Always remember to track ALL of your directly related business expenses, including how much you spend on leads, products and services, meetings, trips and conventions, training, etc. You must add these expenses to your original startup costs.

2) Subtract how much money you’ve earned from the number above (your total expenses) and this will tell you how much money you’ve made (profit), or how much money you’ve lost and/or are losing.

3) To repeat: If after 30 to 90 days, 6 months maximum, you are not making a profit, you should seriously reevaluate!

Don’t continue down the same path if you are only spending more money than you are making, and not making any profit in return.

Remember, except for a not for profit endeavor, the purpose of being in business is to make money. And in order to make money you have to actually make more money than you spend.

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How To Become An Affiliate Marketer

Wednesday, June 17th, 2009 at 6:33 pm  
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For those new to online business a topic that has more than likely has come up is affiliate marketing. Affiliate marketing is the process of making money online by advertising another websites products or services. If you are new to being a webmaster or blogger affiliate marketing should be a consideration if you plan to make money online. First though you will need to build a web presence which is receiving a decent amount of traffic. If you would like to learn how to build a website then I would recommend visiting w3schools.com. These guys have a huge amount of free tutorials teaching people html, css, javascript, and any other web language that is needed to build a website. Now if you would prefer to take an easier route when attempting to make money online then perhaps you should consider blogging. You can create your free blog at blogger.com, wordpress.com and typepad.com just to name a few. Once you have decided which web presence you would like to introduce to the web your next task should be building traffic.

Building traffic is truly one of the most difficult tasks of being a webmaster or blogger. It is much more difficult than creating new content or choosing which layout you would like to use. Website marketing will more than likely take up 80% of your time especially if you are attempting to gain a coveted first page on Google’s SERPs (search engine ranking pages) for a competitive keyword. Now to get to the top of any major search engine there are a couple of things you will want to do. First and most important is having a website or blog that is useful and having the content updated daily. The next thing that you should work on is building backlinks. A backlink is your URL on someone else’s website. There are many ways to build backlinks such as submitting to free directories, social bookmarking sites, blog commenting, article writing, and guest posting. If you would like to know how many backlinks would be necessary to gain a first page for a particular keyword then type it into Google and go down the list checking the number of backlinks on each by going to yahoo and typing link:www.theirurl.com. Now once you have reached the top of SERPs and begin receiving a decent amount of organic traffic it is time to decide which affiliate program will be most helpful in capitalizing on your traffic.

One of the biggest questions throughout forums and other media which webmasters communicate is “I am getting XXXX amount of traffic how do I make money off it?” To answer this should be on a case by case basis. Personally I think a mistake most webmasters make is rather than finding something that would actually help their visitor they prefer to take the easy way out and sign up with a Google Adsense account. Google Adsense is a program that Google offers which places ads on your website of related websites then pays you for each visitor that clicks off your website or blog. I think the only time to use Google Adsense is when there is no other helpful affiliate program. For example I run a website that teaches people how to make money online without a web presence I chose to advertise for websites that paid people to work for them. In turn I get paid for everything that the visitor does for the website that I referred them to. I also run a blog about fishing and rather than use adsense I chose to use click bank which is a massive marketplace where you can pick and chose which product you would like to offer on your website or blog then are paid a commission for each sale usually much higher than a click on an ad. So before opting for a PPC (pay per click) system it may be in your best interest to look through some of the other options such as amazon.com, clickbank.com, and other affiliate programs. Truly though once you get the traffic deciding how to make money should not be that hard just take the time to look through your options before deciding.

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Starting An Internet Home Business Can Be Very Daunting.

Monday, June 15th, 2009 at 9:31 am  
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If you do a search on the internet at the moment for home business opportunities the response from the search engines is immense. There are so many home business opportunities at present for people to explore. Some of these opportunities can be very good, however beware as there are many so called get rich schemes advertised. These schemes state things like ‘earn thousands per day with only 5 minutes work’. An internet home based business just like any business requires determination, dedication and work (lots of it at the start) to succeed.

People just like you can make a lot of money from the internet, however there is a very steep learning curve on this type of work (believe me I know). There are lots of applications, tools etc to assist you with your campaigns. Again some of these are very good, however again some simply do not work. The best advice I can give prior to signing up for a new home based business you found advertised on the internet or an application to asssit you do your research prior to handing over your hard earned cash. Think about it if the product is good people will write reviews about, exactly the same goes if the product is not good, people will want others to know what it is like. If you are unsure communicate with the owners of the website involved and ask questions. If you are unsure then simply do not go with that tool, find another one. Ensure that you read between the lines on all sites, these sites are created to attempt to entice you to press the ‘Buy Now’ button.

Of course there are numerous schemes on the internet whereby you join under someone else and sign up to some other programs, you then advertise to attempt to sign other people underneath you, when they sign up for the other programs you are paid a commission. Some of these are good, some are abosultely useless. Again do your research.

As there are so many opportunities out there which ones should you go for – lots of people have various recommendations, however it all does depend upon what you are good at. If you are good at filling in forms for examply give data entry a try – this will earn you some money. If you are good at marketing sell something. If you like what you are doing, are good at it and passionate about it you will enjoy what you are doing, therefore doing your home based job will not become a chore because you like what you are doing. If you like what you are doing you will do it better. If you do it better the money will come in.

Think about what you do when you go on the internet, do you go on the internet to buy things, perhaps you go on the internet to participate in forums or maybe (as most people do) you go on the internet to find information. Again do what you know. If you go on the internet for example to participate in forums maybe think about setting up your own forum which you can charge a fee for. If you go looking for information, what information do you look for, what information do other people look for. Have a think about what you are good at and what you have achieved over the years. If you can find a ‘niche’ then write an e-book about it and try to sell it on the internet.

Advertising is the key on the internet, you may have the best website in the world which has taken you months to develop and is your pride and joy but if no-one visits it what is the point in having it. There are lots of ways to advertise. Some are cheaper than others and some are even free. Marketing techniques can be from pay per click systems, ezine advertising, rss feeds, mail signatures etc etc. What is better 500 people who come o your website, poke around a bit and never come back or 5 who come to your site, like it, bookmark it and come back again and again and again. If you want you can also buy the traffic, however as your website is effectively selling something we want targeted traffic not general traffic. Dont forget as you have a website you can advertise offline to.

You can suceed on the internet without a website through various means, however you will get a far better response if you have one. There are loads of articles, tips and even templates on the intenet.

Do you know what the most important thing is in internet marketing? Well guess what it isnt sale (although they are your bread and butter) it is peoples email addresses. This is known in the trade as the money is in the list. If you have a website look at various ways to et your visitors email address, be this by offering free goods, newsletters etc. Once you have their email address which is called opt in by the way you can send them mails without spamming. Nobody likes to be spammed. If you do your reputation will go down. What you can do with these e-mail addresses is hige. You can build your customers trust, you can offer services, you can sell them things – the list goes on and on.

Trust and respect – remember that anyone that visits your website is a customer or a potential customer. You will need to gain their trust and respect them at all times. Treat them as you would like other people to treat you.

The biggest bit of advice I can give you on starting a home business is use your common sense – if it doesnt feel right drop it. Ensure that you research and constantly evolve as the internet evolves. The internet is here to stay so keep up to speed with what is happening.

Peter Cunningham – Internet Marketer
http://www.whatusearching4.com

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Working From Home Is No Longer A Dream

Tuesday, June 9th, 2009 at 6:34 am  
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Many people dream about the possibility of working from home. This is especially true for those people who feel as though their current employer is holding them back from enjoying life somehow. Working from home certainly can be a wonderful thing, and many people have realized this dream, especially since the Internet has come onto the scene. If you dream of the day whenever you can quit your full-time job and began working for yourself at home then taking the right steps along the way is imperative for you to reach this goal. Here are some of the steps that you should take and some that you should not take.

One of the problems that most people find that makes it difficult for them to begin working from home is that their current job takes too much of their time. If you are working full time and have other responsibilities to consider then it typically does not leave much time in the day to be able to start a new business. That is why you must choose a business opportunity that will allow you to build your success in the time that you have. You would do this by going with a proven system that takes care of all of the work for you. All you should have to do is join the system and allow them to work for you.

One of the great things about working from home is that it will give you the freedom to build your business even further. As you begin to realize your goal of work at home success, you will begin to have additional time that you can put into your business. One of the keys to any successful business venture is that you recycle your time and energies into the opportunity. By choosing wisely whenever you decide which opportunity you are going to sink your self into, it will afford you the time, not only to build your business but also to do the things that you have always wanted to do.

One of the things that you want to avoid is any business startups that will not give you long-term profits. Many of these businesses promise you that they will give you success immediately and some of them may actually deliver on that promise. The problem is that you do not want to build your business on a system that will not be around for the long term. Having money in your hand immediately is a great thing, seeing it go away after a period of time is crushing. Make sure that you don’t begin your work at home business by joining a program that will just cause you to begin an endless cycle of opportunity hopping.

Working from home is more than a dream, it is a reality for those that really want it. If you pursue your dream by following the right leaders, you will certainly find that success can be yours and you can begin living your dream quickly.

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