Understanding how to start a legitimate online business starts by first understanding the way online marketing and sales works. Below I have outlined 5 different phases that you can use to help you prepare and successfully launch your online business Although following these phases will drastically increase your chances of success, ultimately the key to your online success will fall on your own unique ability to get things done! Your drive, determination, ability to set goals and follow through with them will determine your level of success with your online business. Most people tend to rush into things without doing their proper due diligence and research. You need to first know what it is you’re promoting or marketing. Is it a physical product or service? Who your target market is and what do they expect to gain from your company or business. Once you take a moment to figure this out then, you’ll move on to phase 2 of your initial set up.Phase 1 – Register your Business EntityThis is so Important but yet most people totally skip it. Getting your company registered with your state will save you a ton down the road. You can find tons of resources online to register your business name with your state. If you want to create a legitimate online business do yourself a favor and take care of the legal side of your business right from the beginning It will allow you to operate as a legally registered business, accept forms of payment under your business name, hire staff (if needed), write off business expenses, open up business accounts, open up a line of credit for your business, save you in instances when someone trying to sue you and you have the benefit of being able to write of business expenses using your company’s Tax ID number.Phase 2 – Choosing your nicheThis is the simplest step but, for some can take the most time to overcome. I suggest you choose a niche in which you know. Try to go into a niche that you’re comfortable with that you’re also interested in. Don’t let the products decide what niche you’re going to go into. You choose your niche and then you choose a product that fits your specific niche. Don’t try to spread yourself too thin either. If your business is structured around music & equipment, avoid complicating things right off the bat by introducing other non related products that don’t coincide with your main product. Get good at selling one thing before you move on to the next.Phase 3 – Selecting Your Base of OperationsThis is the phase where you decide what online platform you will use to base your initial campaign from. If its physical products then you might want to start off by creating a seller account in the marketplace where your targeted audience is known to be, that receives a good volume of traffic. If you plan on going the digital route or information marketing, you will most likely need to create a website of your own. Whichever you choose, keep in mind that this should be your central hub for all traffic and communications between you and your potential customers. Your online business needs to look as legitimate as possible right from the start. People base a lot of their buying & interaction of perception. The more authentic and legitimate your online business looks, the greater your chances of converting visitors into potential customers and traffic into leads which ultimately converts into a paid customer.Phase 4 – Preparing Your Home Base to Open ShopOnce Phase 2 is completed and you’ve found your central hub make sure that you’ve done everything cosmetic that you can possibly do. If you want to look like a legitimate online business right from the start then it would be beneficial to have a company logo created and a few different website banners designed that match your overall theme. You can have this created for cheap by going to a site like fiverr.com. You also want to decide on a color theme for your website that matches your logo. You’ll need to choose who or what will be presented as the face of your online business. People want to know who or what figure represents this company in the public eye.Phase 5 – Getting CustomersOnce you have went through the 4 phases and you have a product or service to promote your next step will be to drive customers or leads to your online business. What’s having the best product or service in the world if no one can find it? No good at all. There’s two forms of driving customers to your online business or as we online marketers refer to it as “driving traffic” and that’s the free way or the paid way. Paid ways include but are not limited to google ads, banner advertisements on other high traffic websites, TV advertising radio & newspaper ads. Some free ways to drive traffic and generate leads/customers consist of social media, word of mouth, youtube.com, blogging & article marketing or joining a network with other like-minded individuals The free ways could appear to be slower, results wise but in the log run can be the base source of stable traffic & leads for your business, if your marketing budget was to dry out. Consider your budget and map out your strategy wisely.
Best 10 Small Business Ideas Of 2020
Do you feel bored with your regular nine to five job and looking for starting a business? Are you looking for starting an extra earning source? Or, do you want to start a small business in full swing eyeing to make it your career?The idea of starting a business can be exciting and all it requires is time, effort, money, and a fresh idea. We can definitely help you with the ‘idea’ part.Let’s get started with 10 small business ideas of 2020 that can get you started.Cooking/Baking: This doesn’t need a huge capital. If you already have the skills, you are good to go. Make a slow start. If necessary, work from home. Select your preferred arena such as Braising, Stewing, Steaming, Baking, Roasting, Grilling, etc. Start with 2/3 items and start delivering. Everyone likes a nicely cooked home meal. Advertise within your known area and let your cooking do the rest.Tutoring: This is probably the most known source of earning, though most of us don’t try to take this on another level. Tutoring is not limited to teaching academics. It can be a huge business opportunity with these extra steps:- Know how to play a musical instrument? Teach your dexterity.- Can make small yet handy crafts? Teach your techniques.- Good at editing or designing? Teach your skills.- Able to sing, dance, art, cook, or anything as such? Teach your expertise.- Confident in applying your makeup just right? People always asking, how are your attire always so perfect? Teach your mastery.- Know how to click the perfect picture? Teach your knowledge.To summarize, find out what you know because there is a huge number of potential students out there searching for your service. Remember, learning will never go out of fashion.Babysitting: Bet you have spent a fair share of time taking care of your baby nephew and nieces. Now is the time to use that experience. Watch the kids when their working parents are too busy to do so. Make your family and friends your brand ambassador in this case.Interior Designer: Have a fascination with a beautifully organized home? Then start learning of course! Online courses about the basic interior are not very hard to find. After gathering enough knowledge start doing small projects, take pictures, make a portfolio, and open a website or online page or hand out flyers if needed. The want of virtual assistants is huge in rate.Break the norm saying, Interior Designers are only for the riches. Provide your service in all possible ranges and see your business booming. Due to growing demand, you may count interior design as one of the best among 10 small business ideas of 2020.Customized Jewelry: Have a thing for jewelry? In that case, this business is for you. The opportunity in this field is huge with its growth projected at 5-6% per year. From golden to wooden, no jewelry will ever be old-fashioned. This is perfect for a small capital side business. Due to the rising popularity of customized jewelry among fashioned seeker women, this can be considered as one of the best among 10 small business ideas of 2020.Develop an app: There are apps for anything and everything these days. From finding all your essential files to finding a good night’s sleep, there is an app to the rescue. Coding skills or no coding skills, learning how to develop an app will only bring you potential business opportunities. Start with some marketing research and you are off to a great start.Translator: Now will be the time to put your language skills in use.Employment of translators is projected to grow 19 percent from 2018 to 2028 which is much faster than the average for all occupations. If you know more than one 2nd languages then you’re in luck and in great demand.Create your channel: A YouTube channel can earn around $3 to $5 per 1000 views. A successful YouTuber can earn millions by a single video. If you are up for it, this can be your only earning source as well. Hence this idea can be considered as demanding ideas among 10 small business ideas of 2020.If you have a passion for travel, standup comedy, music, dance, animation, teaching, creating, or anything of such sort, start sharing with the world.Learn about YouTube guidelines and know your tools. A decent location and a good camera can increase your chances of income.Ghostwriting: All ‘BoJack Horseman’ fans know about Diane and how she was a successful ghostwriter. She was never out of work and nor will you be if you have a passion for writing. A ghostwriter may not get credit for their work but it’s a lot of money.Many started as a normal ghostwriter and ended up having an influential career out of it. Averagely, an adept ghostwriter can net $20,000 per project and over $50,000 if the client is a celebrity. Beginners on average earn around $5,000 depending on the topic and length of any text.Freelance Content Writing: Content writing is undoubtedly one of the best among 10 small business ideas of 2020. In this age of digital marketing, content writers have their fair share of demands. If you have skill in formulating a well-structured story or article, this startup is for you.One can write content for a variety of things like Web content, Blogging, Social media, ad and sales copy, Expert, or industry writing, Journalistic/news writing, Creative writing, etc. An experienced content writer can earn up to $1000 to $5000 a month.If you already made up your mind to start a small business, that’s great! Don’t make a delay, pick up one from 10 small business ideas of 2020 above, and get prepared for a jump in the big space of business!
Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?
There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.
In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.
But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.
Different Types of Financing
One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.
Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.
But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.
Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.
Alternative Financing Solutions
But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:
1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.
2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.
3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.
In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:
It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.
A Precious Commodity
Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).
Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.
Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?