Creative Business Financing

Whether you are already a business owner, or are starting up new, the first thing that you will think about is finance. There are many ways of going about getting the money you need.

That said, you must also take into consideration several factors before you get the money. Have a look at the various options you have in front of you, and compare it with your business plan and projected revenues. Realistically speaking, identify how you would be able to repay the money that you are borrowing.

Here are some ideas that will help you get the money you want.

Savings Account: Here we are talking about your own savings account. Before you dip into your kitty of savings, consider the following: How much savings have you got in that account? Are you dependent on that money for your day-to-day expenses? How confident are you that your business venture will succeed? Be realistic while you make these considerations. If the savings account is not something you depend upon, and you can afford to forget about the money you take from it should you incur a loss, then go ahead and take the money from it. The upside to this is that you are taking an interest free loan from yourself and saving quite a bit of money on that end. You can even repay this loan in variable installments, and not suffer penalties for it.

Family and Friends: This is also a good option for you to acquire funds for your business venture. Depending upon what you discuss with your friends and family members, you can choose the method of repayment, and also if you are liable to pay interest. The downside to this is that if you cannot repay the money back in the time that you promised, you stand to lose a good relative or friend.

Partners: Another way of generating funding is to take on partners in your business. This is again a matter of choice, and your partner must have the money and the inclination to invest.

Loans: This may not be a very creative idea, but some banks offer very interesting kinds of personal and business loans. It is worth a shot to go have a look at these options. You may just strike a gold mine, and find the perfect method of financing your new venture.

Sell the Junk: If you have any unused premises, or unused inventory lying around, or unused trademarks and licensing rights, it is a good idea to sell them to those who need them. This is a good method of recycling your own assets to create finance for your enterprise.

Sell Shares: Selling the shares of your company is a time-honored method of creating finances for your company. If you have a new company, you can do it. You can also do it, if you own a well-set company. You can also sell the shares to your employees. Talk to your CPA and get more details.

Advertise: This sounds silly, but sometimes an advertisement can also generate interested financers for your project. Putting word out there ensures that you generate interest from persons looking for a good investment opportunity. It also gives you a chance to advertise about your company along with it.

These few ideas should help you generate funds for your new venture.

 

Starting a Vending Machine Business

A vending machine business is one of those few legitimate businesses that require you to put in very little time and effort, but still rake in huge profits. That being said, this venture does have its own positives and negatives, which you need to consider before starting your own venture.

Feel like having a soft drink while walking down the street? … What do you do? Well, it is likely that you look out for a vending machine, insert a coin, and out pops the can. While you have got what you wanted, someone, who perhaps is holidaying somewhere, has made a profit out of it. You could have been this person making profit while being on a vacation, had this vending machine belonged to you. Right? If you are thinking on similar lines, here is your guide to understanding the business, which will help you get going.

Know that this business is a 100% cash-only business with a nominal initial investment, i.e., if you are not opting for those huge machines, and one that does not require a history of sales-and-marketing experience. That you are your own boss, perhaps is the best thing about vending machines. You will be the one to decide the type of vending machine you would want to opt for and where it will be placed. You will also get to decide what the vending machine will sell. And yes, you will be the one responsible for servicing machine from time to time. Once you roll out your own business, you are the only person on whom the success (or failure for that matter) of this business will depend.

Setting It Up
It is better to start small, and climb the ladder of success, gradually. Ideally, you must go in for just one or two vending machines. Select a good spot for the machine, and see how it performs for a month. This way you will get a feel of the routine involved in running the business. If things are not going the way you expected, you can make the changes — in pricing your goods, location, etc. — as and when required. Once you are confident of the way things are moving, besides gaining a monetary incentive, you may opt for more machines.

Decisive Factors
It is quite unlikely that a vending machines business will ever go into loss, though that doesn’t mean it will give you astounding profits either. There are quite a few factors that will decide as to how much profit each of your machines will make for you. As in case of any other business, you will have to take these factors into consideration when you decide to start this business.

Let us assume … that you have decided to start this business with a single machine that will sell cigarettes. You have a competitor, who also decides to start selling cigarettes through a vending machine. Both buy the same machine and sell the same brand of cigarettes. You place your machine outside a gymnasium, or a sports complex, while your competitor places his, outside a pub. It is, but obvious that the competitor’s machine will sell the entire stock of cigarettes even before your machine manages to sell a single pack. If both of you decide to remove the cigarettes and replace them with health energy drinks, your machine will finish its entire stock even before your competitor’s machine sells one drink.

In both the cases, the machines were the same, so were the contents, but the sales figures were totally different. Why? There is a simple, one-word answer to this, and your entire vending business will depend on the location.
The location

Location is the most important factor when it comes to vending machines. You should, ideally place your vending machine where human traffic — foot traffic in particular, is constant. A vending machine will get customers only when it is visible to them, and they will see it only when it is placed strategically. If your vending machine is easily accessible, it is bound to attract customers and help you make a decent profit from your venture.

Yet another advantage of keeping your machine where there is consistent human flow is security as doing so will rule out the chances of your machine being vandalized — a problem which is quite common when it comes to vending machines. If you place your machine in an area which is hardly frequented, it will not make much profit, and chances of it being vandalized will only increase.

Good places to have vending machines include malls, busy street corners, movie theaters, inside or outside pubs and discos, inside the school premises or outside it, … the list is virtually endless.

Getting hold of the place
Irrespective of where you intend to place the machine, mutual understanding with the owner of that place is a must. If you are lucky enough, you may get a place for your machine for free, or for a nominal share of the profit. Whatever deal you strike, it is always better to have an understanding between you and the other party on paper as doing so will rule out legal issues, which may crop up if differences occur at any point in the future.

Target customers

Location will also depend on who your target customers are. A little research will always work in your favor. Today, almost anything can be sold through a vending machine — soft-drink cans, gum, hot coffee, cold coffee, cigarettes, even hot dogs and pizzas.

Know the taxes
Before placing your vending machine on any street corner, or outside a pub, or any such place, make sure that you check with your local authorities, and find out what taxes and tax deductions are applicable for this business in your region.

Research before purchasing the machine

You need to trust only reputed vending machine manufacturers/dealers, and keep away from those, who make tall claims. You can visit a few established operators in your area, and find out where and how they purchased their machines, and if they were experiencing any problems with them, how did they go about solving the issue. This way you will be sure of buying it from a good source.

Start Small, Dream Big
The vending machine industry, sure is a dynamic one. There is no harm in starting small. You get the taste of managing your venture with little capital investment to start with; and finding yourself in the position to expand your business, you may increase the number of vending machines in different locations and reap good returns. Make arrangements for a standard vehicle to help you visit the location where the vending machine is placed.

Take Notice
After reading all of this, it may seem that this business is really easy — buy a vending machine, place it at a strategically apt location, fill it up with what you intend to sell, earn good money, and refill the machine after regular intervals. Theoretically — yes, it is incredibly simple. Practically speaking — yes and no; it can, or cannot be so simple depending on how you would go about it. You need to understand that owning a vending machine is not some sort of magic formula to become rich as many advertisers will make you believe. This notion itself is one make-believe!

Beware of the false claims
Going through the advertisements on vending machines, you will come across several claims of average profits every day. A majority fall heels over head for this, dreaming of all the money they will make if they start with 10 machines all at once. This, however, is not the case. These false claims have prompted a number of people to start their business only to find that they couldn’t even recover the amount they invested in buying the vending machine until several months into the business.

Buy from a reputed manufacturer/dealer

Avoid buying machines from manufacturers, who make tall claims of earning big amounts from day one. These people may be out to cheat you, and the aggressive marketing that they resort to is only to cover up the fact that the quality of their machines is substandard and their service, poor. It is in your best interest to buy vending machines from a reputed manufacturer/dealer. It may, initially cost you a tad more, but will be much more profitable in the long run.

To Sum Up
You just need to be sensible when starting this business. You should not get carried away by false claims of people becoming rich overnight (or over the fortnight for that matter). If you get confused and can’t decide on a certain issue, it’s better to take advice from someone you trust.

Business Bottom Line

There are many ways to determine if a business is in profit or loss. The most effective way of obtaining the profit and loss status of an organization is referring to its financial statements. The balance sheet is a financial statement which gives a clear idea of the financial status of a firm. It comprises the bottom line, which is the last line in the audit, and is a critical point regarding profit or loss figures.

What is a Business Bottom Line?
Fundamentally, it is the amount of profit and gain realized after all the expenses and taxes have been paid off. Because bottom lines begin with the gross sales and then deduce taxes and disbursements to assert the net profits for a quarter, investors are able to promptly find out the current fiscal status of the organization. It sums up all the information, which is why, it is possible to know if a company is earning any net income from the business venture or whether the operation is presently functioning in red.

The bottom line can be a reason for rejoicing or can render motivation to make some modifications in the company operations and processes. When there is little or no net profit earned, the organization generally takes steps to better the profitability of the business. Depending upon the situation, the strategy and plan to increase profits might initiate from the management of an organization.

How to Increase Your Business Bottom Line?
Introduce and implement strategies that will provide appropriate solutions to people’s problems and needs. You are required to create marketing strategies which would effectively cater to the wants and needs of the public. Conduct a regular follow-up with people who may need your help and support. Maintain healthy relations with the public, marketing professionals, advertising agencies, and most importantly, your clients and customers. By doing so, you will get good business due to referrals from clients and customers who are satisfied with your services.

As the bottom line is the amount of profit earned after all the disbursements are paid back, a logical approach to meliorate it can be lessening the amount of resources that are related to covering expenses. Generally, this step includes a cut in departmental budgets, or at the very least, terminating discretionary funds which are called upon to deal with the expenses not covered in existing budgets. The cost cutting measures may also be supported by eliminating positions and combining responsibilities, cutting back on overtime allowances, and changing required number of full-time posts to part-time.

Along with the measures to trim the expenses and improve financial planning, the bottom line is usually raised by introducing and incorporating new revenue streams for an organization. This may include launching new products and services, or creating a new market for the existing line of products. The management tries its best to cut down on expenses, and implement new methods and strategies to attract business and increase income.

Business Administration Tips

Management is defined as the skill of coordinating all the organizational resources, be it human, financial or material, in order to achieve organizational goals. A degree in business administration equips a person to perform this management function in the best possible way. So, for all those who are contemplating a career in business management and administration, given below are some useful tips, with regards to management education, as well as the job profile that you can expect in future.

Tips on Management Education

To make a career in this field, you will need a Master of Business Administration (MBA) degree from a recognized college or university. The degree provides education in all the major business administration and management fields. Here’s a list of subjects that you will study in a business school:

Marketing
Financial Management
Accounting
Human Resources Management
Statistics
Economics

You will learn about basic theories and principles of management as well. If you get into a good business school, there will be guest lectures by some high-profile professionals from the corporate world, which in itself is a great learning experience.

Solving case studies, giving presentations, participating in group assignments, working part-time in a company and doing internships, are some other things you can look forward to doing at a business school. Once you pass out of the school, you will have a complete knowledge of management process in business administration. A management school will also equip you in all the required management skills, the list of which is given below:

Planning
Organizing
Decision Making
Problem Solving
Communication
Hiring
Controlling
Customer Relationship Management Skills
Leadership
Team Building
Negotiation Skills

Tips on a Manager’s Job Profile

The role of a manager in business administration, depends on the kind of organization he is in. Initially, his job may be limited to his chosen field of specialization, i.e. he might be a manager in the marketing department or in the finance department. However, as he moves from junior management to mid-career level, he will be heading one of the departments in a company and performing functions of planning, organizing, staffing, directing and controlling, in his department.

Planning
Planning involves setting both short-term as well as long-term goals and arranging them in a logical sequence as to which one needs to be achieved first and so on. A manager needs to plan for what to do, how to do, when to do and by whom it should be done.

Organizing
This function mainly involves setting up a structure in the department or the organization. Setting responsibilities for each and every person or department, how they will correspond and work together, who will supervise whom, all fall under this management function.

Staffing
A manager needs to hire right people for any given job. So, he invites applications, interviews people and then hires them to work in the organization.

Directing
A manager motivates and leads his team so that they give their best to meet the organizational goals. A manager has to find the right balance between being sensitive to his staff needs, as well as getting the job done in time

Controlling
The manager assesses and keeps a check on the performance of his employees, so that the desired results can be achieved. There is a set “rewards and punishments” formula in every organization, which a manager follows to ensure maximum work output from his employees.

To perform the above functions, a manager needs to be creative, fair, sensitive to the needs of others, a good leader, motivator, problem-solver and a sound decision maker. When he reaches senior management, he will be required to overlook all the departments in the company. A person with a degree in business management and the required managerial skills, can become the CEO of a company.

An MBA degree will open a host of career opportunities for you in the corporate world. So, without waiting any further, start career planning today!