You are here because you want to start a new business, or do better in business than you have done in the past. You already know why you have not achieved your goal. Now you can learn new ideas to turn things around.
Foremost, your need adequate capital to start and maintain a new business for the long run. You need efficient and effective management to help you use your capital in ways that brings maximum results for every dollar spent, while at the same time minimizing waste and duplicative work processes.
In the early days of your business you would spend significant time on choosing your business goal, and deciding on a plan to achieve that goal. You would need to unpack your business plan to reveal the objectives that must be met to put your plan into action.
While all this planning is going on keep in mind you would need a capital of between $5 - $10 million to start a viable small business in the U.S. That's a huge amount of money for a small business person to raise. Now that I have got you thinking about the amount of business capital you need, I will stop here to give you time to absorb the good news that you can raise $5 -$10 million when you join this network.
Accessing Business Capital
When you have to raise $5 - $10 million to start a new business, you are forced to think big and expand your imagination. That's a good thing because you are considering ideas you previously thought outlandish or unworkable.
Many small businesses, which actually are micro businesses as their operating capital is far below $5 million; are often owned by single proprietors who make all the decisions affecting the direction of these businesses. For these single proprietors, working with others in partnership to own and manage a business is a new way of doing business they cannot readily accept.
By refusing to work with business partners, these single proprietors have made a choice between remaining small, worrying constantly about money, fear of losing their businesses, and working with business partners who would come into their business lives with money, new ideas and energy to expand the scope of their businesses far beyond what they could achieve alone.
However, working in partnership with other business men and women raises the need for enforceable contracts to govern the rights and responsibilities of the partners. These contracts are made under conditions where the partners are thinking rationally and agreeing to stipulations that positively affect their lives, which is why it is important to allow the parties to a contract three business days to read the contract, and seek advice from their lawyers before signing it.
Contractual Obligation
If you have chosen not to remain small, and live in fear of losing your business, you can turn your life around by working with other business men and women who are looking for a partner like you. The problem is when people with different life experiences come together to run a business there will be conflict arising from misunderstanding, unwillingness to compromise, or put oneself in another person's shoe.
For this reason people coming together to start a business would fail if they sealed the business deal with only a handshake and a nod of the head. This is because the conditions under which a business deal is made would change when conflict arise months down the road.
A written contract, legitimized by the signatures of the parties involved would remind them in time of conflict of their obligation under the contract, and the financial loss to be borne by the offending party. In its enforcement, the contract seeks to help the partners to act rationally, rather than emotionally in dealing with problems that arise in the ordinary course of running a business.
While a written contract may seem an unnecessary complication to a business person who has done business alone all his life, the flip side is that a contract protects the rights of ownership of the business partners. Nobody can take away your right as a part-owner of the business without due process of law. And so long as you are meeting your responsibilities to the business as stipulated in the contract, your income and right of ownership cannot be taken away.
Additionally, the contract channels the energies of the partners toward the common goal of making a profit to meet the financial obligations of the business and maintain it as a going concern. Banks to which the partners would go for business loans would want to know if the business is properly managed, and its prospect for remaining in business for the long term. A contract that clearly states the rights and responsibilities of the partners, and how conflict among the partners would be resolved would be viewed favorably by the bank.
Getting A Bank to Finance Your Business
Unless you are a wealthy person, you would go to the bank for money to start your business. Once you begin working on it you would find borrowing money from the bank is made easier by the banks strong desire to loan money to businessman and woman like you. Banks don't like holding their money in the vault for long, because they make no profit doing so. Money is the commodity of the bank. To stay in business banks must loan money to those who need it.
However, the bank's desire to meet the capital needs of businessmen and women is tempered by its desire to protect the money it loans out. In other words, the bank would want a guarantee from you or some other person that in case the new business fails, the guarantor would pay to the bank the full value of the loan, or any unpaid part thereof.
Finding somebody willing to guarantee the loan is crucial to borrowing money from the bank for a new business. The bank would not give an unsecured loan to a start-up businessman or woman. This is a fact of life.
Unable to find a guarantor to secure the loan, many small businessmen and women would tell you is the major reason they did not get their business loans. The other reason banks would argue is that the amount of the start-up capital applied for was too small to support the new business. And this is the reasoning of the banks:
Everything being equal, a bank would most likely give you a $5 million business loan, than give you $500,000. Banks know from experience that a start-up capital of $500,000 would not generate enough sales to meet the operational cost of the business, let alone repay the bank loan plus interest. But a $5 million business loan, under good management would generate sufficient sales to meet the start-up business financial obligations.
If you think getting $5 million from the bank for your start-up business is a pipe dream, stop underestimating what you can do and join Networking Up today.
Are Banks Friends or Foes
You would be hard pressed to convince a small businessman or woman whose business loan application has been denied several times that banks are friends. Unsuccessful business loan applicants see the banks as obstacles to their dreams of owning profitable businesses. They don't see the banks as friends.
On the flip side, finding the right answer to the question why do banks deny some small business loan application would inform the unsuccessful business loan applicant that the banks are simply doing their job; and that is to give business loans to applicants who meet the banks conditions for the loan.
Given that no bank in the United States can legally refuse to give a business loan to an applicant who has met all the bank's conditions, when a loan application is denied, the burden falls on the business loan applicant to prove that he has met the bank's conditions for the loan. Unfortunately, in many cases, unsuccessful business loan applicants have failed to provide sufficient proof that they met all the bank conditions for the loan.
Consequently, it's easy to see that the obstacle to the unsuccessful business loan applicant is not the bank, it's the applicant's inability to meet the bank's conditions for the loan. Among the bank's conditions are these:
The business loan should be secured with a collateral to cover the loan in the event the business failed.
The business loan should be invested in an income generating enterprise that would produce sufficient income to meet the operating costs of the business, including payment of the loan plus interest.
The business capacity to generate the aforesaid income should be certified by a feasibility study of the business location pertaining to human and vehicular traffic, and the sustainability of that traffic.
The bank would like to see a business plan that lays out the names of the owners, the business organizational structure, the goals of the business and how they would be achieved, as shown in a 12 month estimated financial statement showing the estimated income, expenses, taxes and net profit.
Working Your Way Up In A Business Network
If you think what you've just read is too much to handle, you've found the reason many have failed to own and run successful small businesses. They start with very little capital. They want to run the show alone, and as a result are limited by what they can do alone. They cannot see themselves sharing ownership of the business with partners: it's their way or the highway.
To avoid the mistakes of the "go it alone" entrepreneur the choice is clear: you need to work with partners who would add their life experiences and business connections to yours to expand your business opportunities far beyond what you can achieve alone.
Joining a business network is an effective way to meet businessmen and women wanting to meet business partners like you. These business people are as smart as you are. They want to meet potential business partners who are honest, add value to the relationship and capable of earning their trust.
Having said this, the number one error many people make on meeting a potential business partner is try to sell an idea or a product. That's a turn off. On the first meeting, your potential business partner is interested in learning about you. What type of business person are you? Are you honest; what is your temperament; are you a good listener, or the type who want to be the only person talking; do you cut others off before they have had time to complete their thoughts; are your answers to questions shallow or informed?
If by the end of the conversation you have not given your potential business partner a clear indication where you stand on these issues, you have failed to sufficiently sell yourself as a valuable business partner, and the relationship would go no further.
On the other hand, if your potential business partner found the conversation helpful, he would want to learn more about your ideas and in what ways you could work together to develop a business plan, and raise the capital to implement it.
With you and your business partner promoting the business plan, you would increase your chances of meeting a third business partner with the financial means to secure with a collateral the business loan you would need to start your new business. Having come this far, don't lower your expectation, reach for a $5 - $10 million business capital.
However, prior to receiving the capital to start your business, more detail has to be worked out regarding the type of business you wish to invest in, ownership of the business, management, sharing of profit, resolution of conflict, and dissolution of the business should that become necessary.
Contact me for detail on meeting a guarantor who might provide the collateral to secure your business capital.
Actualizing Your Business Ideas
Most people are satisfied with having a good job. For a few individuals, this is not true. Either by genes or nurturing, their minds are continuously flooded with business ideas wanting to take flight. Right after school these individuals find jobs to support themselves and their families, but unlike the rest of us they are unable to find self-fulfillment until they have started their own businesses.
If you see yourself in what you've just read, and have a business idea don't sit on it. Because if you do, it won't be long, you would watch with chagrin your idea actualized by someone bold enough to think big and find the money to invest in it. You have to act now to actualize your business idea.
To start, think big and expand your imagination. If you want to own a business that would give you a comfortable income for the rest of your life, you need business partners and a lot of money. A micro-business won't do.
Explain your business idea to someone you trust and would like to be your business partner. You may meet that person in a business network, or someone you attended high school or college with. Certainly, your business partner would make some changes to your idea, and with you go forward to promote it.
Be bold and reach for a $5 million or more business capital. The reason for this is simple. With $5 million or more, coupled with good management, you and your partners can build a business large enough to generate sufficient sales to cover your operating expenses, protect your business, and make a decent yearly profit to keep you in business for the long run.
When I talk about sufficient sales, what does that mean? Starting with a $5 million or more business capital, you are aiming for sales of $7000.00 a day, 7 days a week that works out to $210,000.00 a month, and $2.5 million a year.
Looking at these figures would give you some idea about the type and size of business you need to invest in, and the level of management needed to run it. On these issues and how to access the money for your new business, contact me with your comment.
Meanwhile, for additional articles on networking and other business issues go to www.ezynetarticles.com
