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AHBBO Home Based Business Information Return to AHBBO Archives
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_______________________________________________________________ A Home-Based Business Online _______________________________________________________________ Issue 136 : June 10, 2017 Sent to 13,426 Opt-In Subscribers Editor: Elena Fawkner Publisher: AHBBO Publishing http://www.ahbbo.com Contact By Email _______________________________________________________________ _______________________________________________________________ IN THIS ISSUE _______________________________________________________________ 1. Welcome and Update from Elena 2. Home Business Idea of the Week 3. Feature Article - Financing Your Home Business 4. Surveys and Trends 5. Success Quote of the Week 7. Subscription Management 9. Contact Information _______________________________________________________________ 1. Welcome and Update from Elena _______________________________________________________________ Hello again and a warm welcome to all the new subscribers who have joined us since the last issue. Much of what you read in AHBBO is concerned with is actually *finding* the right idea for a business to run out of your home. This week, we assume that you already have your bright idea but not the money to put it into action. "Financing Your Home Business" looks at the various ways of obtaining financing for home businesses when you don't have a wealthy relative to bankroll you. It's at segment 3. As always, thanks for reading and I hope you enjoy this week's issue. Remember, AHBBO is for YOU! If you have comments or suggestions for topics you would like to see addressed, or would just like to share your experiences with other subscribers, I want to hear from you. Please send comments, questions and stories to Contact By Email . _______________________________________________________________ 2. Home Business Idea of the Week - Local Tour Guide _______________________________________________________________ Do you live in a city or town that attracts large numbers of tourists? If so, and you enjoy meeting new people, have you considered setting up shop as a personal tour guide? To start, you obviously need to have an intimate knowledge of the places of interest in your area as well as some knowledge of its history. Some cities or towns will lend themselves well to a walking tour of the city center while others will require some form of motorized transportation to ferry your guests to the various points of interest. Be prepared to recommend particular restaurants, hotels, theatres and the like. Your guests will see you as an authority on the area and will be likely to ask for your recommendations. To generate custom for your tour guide service, target travel agents in your area as well as relocation consultants. If you are aware of any major businesses in your area who frequently entertain overseas business colleagues, approach them with an outline of your services. Often, overseas businesspeople travel with their spouses and your service would be a welcome complement to their itineraries. Also target convention organizers. Quite often, partners of convention delegates would prefer to spend their time sightseeing rather than hanging around the convention or the hotel pool. Design and have a brochure printed and leave copies in places you think people looking for tour guides will frequent including tourist information centers and hotels. Leave your brochures with the concierge. ----- This is just one of over 130 ideas from the new "Practical Home Business Ideas From AHBBO" e-book. Find out more at home business ideas . _______________________________________________________________ 3. Feature Article: Financing Your Home Business _______________________________________________________________ © 2017 Elena Fawkner So, you have a great idea for a business and, more importantly, the know-how to bring it into creation. The only thing you're missing is the cold hard cash to get started. What are your options? Assuming you don't have a ready line of credit, an expansive bank manager, wealthy relatives or a substantial stash of retirement savings you're willing to risk, you're going to have to do some serious homework and legwork. Fortunately, there are a number of sources of finance for the fledgling small business entrepreneur, at least one of which may be right for you. SBA LOANS Available only to U.S.-based businesses (but look for similar programs in your own country if you're outside the U.S.), the SBA (the U.S. Small Business Administration) has assisted thousands of entrepreneurs start their own small businesses. The SBA doesn't issue grants (money you don't have to pay back) or make loans directly, rather, it guarantees loans made by private lenders thereby reducing or eliminating the risk inherent in new business ventures and making lenders more willing to lend. The primary consideration for the SBA is repayment ability from the cashflow of the business as well as "good character, management capability, collateral and owner's equity". You will be expected to personally guarantee your loan. This means your personal assets are at risk. As for the types of businesses eligible for SBA loans, the SBA imposes the following criteria: the business must be "for-profit" (all that means is that your business has a profit motive, not that it has actually generated a profit yet), be engaged in business in the United States, there must be "reasonable" owner equity (what's reasonable will depend on the circumstances) and you are expected to use alternative financial resources first, including your own assets where practicable. The SBA also imposes limitations on the use of loan proceeds. For example, although the proceeds can be used for most business purposes (the examples given by the SBA include "the purchase of real estate to house the business operations; construction, renovation or leasehold improvements; acquisition of furniture, fixtures, machinery and equipment; purchase of inventory; and working capital"), you can't use the loan proceeds for financing floor plan needs, to pay existing debt, to make payments to the business owners or to pay delinquent taxes etc. As a general rule, loans for working capital must be repaid within seven years and loans for fixed assets must be paid for by the end of the economic life of the assets (but not to exceed 25 years). Interest rates are negotiated between the borrower and the lender but the SBA imposes maxima which are pegged to the Prime Rate. Finally, the SBA charges lenders a guaranty and servicing fee for each loan approved, and there is nothing preventing the lender oncharging these fees to the borrower. The guaranty fee for a loan of $150,000 or less is 2% of the guaranteed amount; over $150,000 but below $700,000, it's 3% and above $700,000 it's 3.5%. The annual servicing fee is 0.5% which is calculated on the then-current loan balance. Where the borrower meets the SBA's credit and eligibility requirements, it will guarantee up to $85% of loans $150,000 and less and up to 75% of loans above that amount (up to a maximum of $1,000,000). For more information about the various SBA loan programs, visit the SBA website at http://www.sba.gov. PRIVATE GRANTS At present, there are no U.S. government grants offered for small business. If you're outside the U.S. check with your own government about the availability of small business grants. You never know! Various corporate grantmakers make grants available for small business though. For more information, visit http://www.fdncenter.org/funders/grantmaker/index.html . ANGEL INVESTORS Angel investors are good souls with a healthy sense of self- interest. Figuring they can get a higher return if they're prepared to take a bit of a risk, they're also often successful entrepreneurs themselves and want to give their fellow travellers a hand up. Think of funding from an angel investor as a bridge or gap-filler between being a start-up and qualifying for venture capital. The kinds of dollars we're talking about here are between about $150,000 and $1.5 million. Beyond that point you're in low venture-capital territory. The SBA estimates that there are around 250,000 angels in the U.S., funding about 30,000 companies a year. So, how do you hook up with one? Not an easy task, unfortunately. It comes down to networking. Start by talking to professional and business associates - they will often know someone who knows someone etc.. Also, check out ACE-net if you're prepared to sell a security interest in your company. It's an internet-based listing service for securities offerings of small, growing companies. The website is at . VENTURE CAPITAL you're in the big leagues now. Generally you're in the ballpark of millions (of dollars that is) rather than thousands. Venture capital firms look for their return on investment from capital appreciation rather than interest (unlike banks, for example). They're generally looking for a return of 500-1,000% on exit. It won't surprise you to learn that venture capitalists are particularly leery of internet-based businesses right about now and not without good cause. It also serves them right. But if you have a solid business plan and strong growth potential, this could be an option for you longer term. One of the common concerns about this form of financing, however, is that you may have to part with an unacceptable amount of control over your own business. In return for their risk, venture capital firms will usually want some control over how the business is run and a say in business decisions. A venture capitalist will expect a seat on the board, for example. It's important to remember, though, that it's in the venture capitalist's best interests for your business to succeed, so giving up some control in exchange for outside expertise may well be something worth thinking about. To find venture capitalists, get a hold of "Pratt's Guide to Venture Capital Sources" for a listing of 1,500 or so including names, contact details and areas of interest. Of course, you'll find no shortage of information online as well. For most readers of this article, your best bet would be to start out by investigating the various loan programs offered via the SBA (or your country's local equivalent). But don't overlook more obvious, close to home sources first. For example, if you have family funds at your disposal and you're confident that your business will succeed, better to start out slow and ease into outside sources of financing as your business cashflow can support it. After all, Uncle Jack is much more likely to be understanding about the occasional cashflow crunch than your bank manager. Of course, if you're NOT confident that your business will succeed, don't get into debt with *anyone*, let alone family members. ------ include the following resource box; and (2) you only mail to a ------ practical business ideas, opportunities and solutions for the work-from-home entrepreneur. http://www.ahbbo.com _______________________________________________________________ 4. Surveys and Trends _______________________________________________________________ © 2017 Ryanna's Hope => ADVERTISING REALITIES Our first "taste" of mass advertising was the infamous "patent medicine" campaigns of the late 1880's. A campaign of selling "elixirs" to the American public that contained cocaine, heroin and many times 44% alcohol rates, the ads claimed they cured everything. America's first attempt at advertising in this industry virtually killed it in 10 years. With few exceptions, it proved to be a "Decade Of Lies." ========================= Advertising Time Line... 1869 - George P. Rowell issues the first Rowell's American Newspaper Directory, providing advertisers with information on the estimated circulation of papers and thus helping to standardize value for space in advertising. ========================= => "DOING TIME" AFTER THE AGE OF 50 While most adults age 50 or above are more likely to be intermediate Internet users testing the waters of the Internet, their heavy online habits have set them on a fast track to become fully accustomed to the medium. Compared to 18- to 24-year olds, they spend on average 6.3 more days per month on the Internet, stay logged on 235.7 minutes longer and view 178.7 more unique pages per month. Source: Scarborough Research => THE HIGH INCOME MALE SHOPPER Nearly 60 percent of e-shoppers are male, 70 percent attended college, and 65 percent have white-collar jobs. More than a third (36 percent) have a household income of $75,000 or more. Three-quarters of Internet users are not yet shopping online. This group has similar habits and lifestyles to e-shoppers, but their Internet usage patterns aren't as diverse, according to Scarborough Research. => WOMEN STILL CONTROL THAT DECISION PROCESS Why is the female audience so desirable? According to a survey conducted by Women.com, Harris Interactive, and Proctor & Gamble, women control 80 percent of all purchasing decisions, and 73 percent of women regularly access product and service information online. Nearly 90 percent of the women surveyed said they were the primary healthcare decision-makers. => SPENDING POWER OF THE TEENS Though the exact age range defining Generation Y varies, all sources agree that it includes teens and young adults in their early twenties, with an average designation of youths between the ages of 13 and 22. For these young people, using a PC is about as intimidating as operating the family microwave. They are a generation nourished by digital technology and, according to Forrester Research, more than 60% of them are online. They make up about 27 million of the total 40-million online consumer population, and their average yearly income is $3,000, which translates into $81 billion in spending power. => WE STILL WANT "LIVE BODIES" TO TALK TO! Modalis surveyed 1,000 US consumers between April and May 2001 and found that 98% of respondents have used the internet for some form of customer service help. The most popular customer service element consumers desired on a company's website was the general telephone number -- 86% sought the number online. => AND... WHY THEY'RE NOT BUYING? eMarketer reported that in the beginning of 2001, the number one reason US internet users did not buy online was because customer service options were slow, poor or non-existent. _______________________________________________________________ 5. Success Quote of the Week _______________________________________________________________ Success is having a flair for the thing that you are doing; knowing that is it not enough, that you have got to have hard work and a certain sense of purpose. -- Margaret Thatcher _______________________________________________________________ _______________________________________________________________ 7. Subscription Management _______________________________________________________________ To SUBSCRIBE to this Newsletter:
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