7 Places to Find Startup Money

This is mostly for our US friends but it might be worth checking out options in your own country.

Think you’ve exhausted all your money-raising options? Think again. Here are seven alternative ways to fund your home based business.

By Paul and Sarah Edwards
Source: http://www.entrepreneur.com/article/80674

While the old saying “It takes money to make money” has some bearing on starting a home based business, how much money it’s going to take depends on the kind of business you’re starting. But before thinking about how to fund your home business, you have to determine how much you need–and that may not be as much as you thought.

For example, the startup costs for some home businesses–like cleaning services, daily money management and pet sitting–are quite low, costing in the hundreds of dollars to launch. Other businesses–like medical transcription, private investigating and mobile pet grooming–will cost $10,000 or more. And neither of these estimates includes living expenses, which you’ll need to take into account when calculating your startup costs if you don’t already have a job to cover those costs.

The most common sources of startup funds are tapping into your own piggy bank, retirement funds, insurance policies, employee severance package, a loan from a family member or friend, credit cards or a home equity loan. If you’ve already considered or drawn from those sources but still need additional funds, here are some other types of wells you might be able to draw from:

First, think about assets or resources you own or are entitled to, such as:

• Taxes. While still employed at a job, you can reduce withholding taxes by changing your number of allowances. Each additional allowance on a $1,000 paycheck is worth about $20; on a $2,000 paycheck, $25. So you can unlock an instant cash stream by increasing your allowances in line with the deductions you expect to have available when you file your annual income taxes. Simply follow the instructions on the IRS form or consult with a tax professional for more information. Calculate these at www.dinkytown.net/java/Payroll.html.
• Collectibles. For almost instant cash, you can sell collectibles you’ve acquired yourself or through an inheritance. This could be anything from your childhood comic book collection to your great aunt’s silver tea service, so check your attic! You’d be surprised what people will pay money for, so don’t overlook things you might just consider “junk.” Auction sites like eBay, as well as sites specializing in the type of collectible you have, make it easy and inexpensive for you to get a good price for your belongings.
• Disability help. If you’re disabled, you may be eligible for a program that provides you with counseling, classes and capital with which to start a business. Check with your state’s Vocational Rehabilitation Agency to determine what it offers. You can find your state’s agency by checking the Social Security Administration’s website.

Second, you may be able to tap into:

• SBA loans. Probably the loan program most suitable for home based businesses is the SBA’s Microloan Program, which is administered through local non-profit community lenders. The average microloan size is about $10,500, but loans can be for as much as $35,000. When this program was started, loans were character-based, that is, they didn’t require collateral. Most programs now require some type of collateral, as well as the personal guarantee of the borrower. You can find the agency administering these loans nearest you on the SBA’s website.
• Angel investors. While most angel investors, such as those you’d find through sites like www.ace-net.org and www.businesspartners.com are interested in companies that already have a track record, if you have a hot, innovative idea, you may be able to interest a well-to-do person in your community, like a doctor or a group of doctors, to invest in your venture.

Finally, you may be able to line up prepaid work so that your customers can help finance your startup. For example, you can:

• Get deposits on contracts you line up. This might be in the form of a purchase order on which you may be able to get a bank to advance your funds. Or, if you’re a service provider, such as a professional speaker, it’s common to require and get half your fee in advance from clients. This can also be done if you have a product your customer will be reselling, giving the customer confidence that they’ll get back the money they pay to you upfront with something they believe their customers will gladly pay for.
• Barter for the products or services you need. For example, if you provide lawn-care services, you may be able to get printing, web design or equipment you need by your trading your own business’ services.

When it comes to funding your home based startup, thinking creatively could help you achieve your financial goals.

Authors and career coaches Paul and Sarah Edwards are Entrepreneur.com’s “Homebased Business” columnists. Their latest book is The Best Home Businesses for People 50+. Contact them at www.workingfromhome.com.

Marketing Lessons From the ‘Little Guys’

By Janine Popick

Big businesses need to lighten up, get creative and take a few cues from small business owners.

It’s usually assumed that when it comes to marketing, small businesses can always learn from their larger counterparts, right? Chances are, the big guys have survived their fair share of marketing campaigns, whether good, bad or downright ugly. Factor in an ample marketing budget and a well-paid marketing team and they’re probably light years ahead of smaller businesses. But is that really the case? I beg to differ.

Corporations tend to keep a closer eye on their bottom line, which means they’re far less likely to take risks or test out new ideas. Conversely, the folks in charge could also decide to gobble up every last penny in the budget knowing if they don’t use it now, it might not be there next year. But what if those dollars came out of their own checking accounts? They’d certainly think twice before spending it now, wouldn’t they?

Most small business owners experience pangs of guilt after opening up their pocketbooks. I know I did when I first launched my e-mail marketing company, VerticalResponse. It seemed like every dollar spent on advertising was one less dollar going toward buying new supplies or technology, hiring employees or even clearing their paychecks. It’s a pretty tough pill to swallow. Because every dollar is so important, small businesses want to see results for everything they spend, and they want to see them quick.

That’s why small businesses must be super creative when it comes to acquiring customers. Here are some things that  I think small businesses are doing good that larger companies might learn a thing or two from.

Grassroots Marketing

Remember the days of good ol’-fashioned face-to-face networking? Ever see anyone from a huge corporation at a local Chamber of Commerce function? Small business owners frequent these gatherings and network like there’s no tomorrow, because a lot times this is their only opportunity to get out of their store or office to meet like-minded people. The San Francisco Chamber, for example, holds after-hours events where local business owners meet, exchange ideas, establish leads and stay in touch however they can. Bigger companies should follow suit by designating community coordinators who can get to know owners by name and attach real, human and hopefully smilling faces to corporate logos.

Social Networking

Small businesses excel at building genuine connections, engaging existing customers and leveraging their networks to secure new prospects. Take San Francisco-based pet boarding facility Pet Camp. They keep in touch with e-mail marketing and include lots of easy-to-share content. They take photos of their campers and post them to their Facebook page (often with hilarious captions), so proud moms and dads can check in on their four-legged family member while away. Of course, larger companies do encourage social media participation – as long as employees follow their gazillion-page social media rulebook. Now I’m not saying social media should be a free-for-all, but companies of all sizes can benefit from having a personality and some flexibility when it comes to social media.

Over-Delivering

In order to set themselves apart from competitors, “mom-and-pop” operations realize a few extra touches make all the difference in the world. I once bought a pair of shoes from a seller on eBay. The package not only arrived in pristine condition, but came with a free shoehorn, leather protection and hand cream. Talk about making the most of your packaging real estate. When was the last time you were treated to a freebie by Amazon?

Being Human

Small businesses do a great job at showing what happens behind the scenes, which helps establish a stronger and more genuine connection with customers. Sonoma, Calif.-based winery Longboard Vineyards encourages readers to learn about Oded the owner, his passion for wine-making and his loyal Longboardians while browsing photos of the lush grounds and their trips to Costa Rica and San Diego. What an great way to immerse people in the company culture.

Lightening Up

Many entrepreneurs start their own businesses for the chance to do what they truly enjoy, not to make it to the top of the corporate ladder. Customers sense this the moment they enter their stores or visit their websites. Vermont’s Magic Hat Brew Company injects fun into everything they do, whether it’s telling folks about upcoming events or where to buy beer. My own company once shot a rap video to increase awareness of what we do and years later, it’s still getting views.

I challenge big businesses to lighten up, get creative and take a few cues from small business owners. Urge your CMOs to pretend they’re spending their own money and you’ll be surprised at what they come up with to battle the competition and the “little guys.” But watch out, we’re sure to put up a fight!

Source: http://www.inc.com/janine-popick/marketing-lessons-from-the-little-guys.html

Janine Popick is the CEO and founder of VerticalResponse, a leading provider of self-service e-mail and event marketing, online surveys, social media, and direct mail solutions. The company was ranked No. 1,771 on the 2011 Inc. 5000 list. @janinepopick