For small businesses that need loans smaller than $100,000, new options are becoming available every day. Image: Flickr / somekindabetty / CC-BY-SA

In business, there are big-idea startups that attract millions of dollars of funding. Then, there are most businesses — restaurants, coffee shops and specialty retailers that provide the day-to-day services we all use. A new startup called OnDeck is trying to help these 5 million businesses qualify for loans more easily.

The problem with small business lending

For many small businesses, qualifying for loans can be a challenge. Many financial institutions are wary of lending to businesses without a credit history or business history. Loans for amounts less than $100,000 are often considered not worth the work it takes to vet a full business with the standard 14-item business loan package. Faced with these two realities, many owners of businesses with fewer than 25 employees end up using their personal credit to secure financing. While this does tie business success to personal accounts, it also creates a dangerous brew of expensive financing and risk to personal finances that scares many potential business owners.

OnDeck provides a business solution

Cloud-based and interlinked, OnDeck aims to streamline the creation of financial reports and information for lenders. Businesses input their business profile, link the profile to their online banking, accounting and credit-card processing accounts. That information is blended with industry data, tax data and regional information to create a full financial profile, prospectus and business credit report. This system, five years in the making, creates the kinds of reports that big businesses use to qualify for choice loans. The reports also provide more real-time information than banks currently use, hoping to streamline the process for loans between $5,000 and $150,000.

Other resources for small businesses

OnDeck provides new financing resources for small businesses, but it is not the only new resource for getting small business credit. A new government partnership called StartUp America aims to provide discounts, resources and information to help small business owners get their business going or growing. The Small Business Administration also provides loan guarantees, counseling and information for small business owners. There are lots of resources out there for entrepreneurs willing to look for them.

Sources

TechCrunch
Startup America Partnership

Big for consumers, big for big business – and perhaps not so big for small business. (Photo Credit: CC BY-ND/Liam Darmody/We Love D.C.)

Groupon, the deep discount coupon website with more than 60 million subscribers, has been a boon to shoppers who go wherever Groupon’s 50 to 90 percent off coupons lead them. High-margin businesses have also benefited handsomely from the increased patronage. However, Karen Klein of Bloomberg Businessweek suggests that small business may actually be taking a loss when it comes to discount sites like Groupon, LivingSocial and BuyWithMe.

Collegiate study calls Groupon a mixed bag

Dr. Utpal Dholakia, a Professor of Management at Rice University in Houston, Texas, conducted a survey of small businesses that participated in Groupon promotions from June 2009 to August 2010. Dholakia found that two-thirds of the participants derived profit from the venture and the remainder lost money – and 40 percent of businesses indicated no plans to use Groupon again.

Groupon fires back

Groupon responded almost immediately via its corporate blog. Company spokeswoman Julie Anne Mossler wrote:

“(Groupon) runs 900 deals a day, and we’ve repeatedly polled 30,000 merchants, which is everyone we’ve worked with to date. When we ask, ‘Would you want to be featured again or recommend us to another merchant?’ 95 to 96 percent say ‘yes’.”

Mossler suggested that the Rice study was undertaken before the small businesses had a chance to calculate total ROI for their deals. Also, the fact that the study used a small sample was problematic in Mossler’s estimation.

If you can’t take the heat, stay out of the kitchen

Many of the problems small businesses have with Groupon appear to relate to employees being unable to handle the rush of one-time customers. Such was the case for Big Ass Sandwiches in Portland, Ore., last spring, writes Klein. The food cart reportedly lost $16,000 when it budgeted for 400 half-off coupons but sold 2,000 in 48 hours.

“There were a couple days where we had 100 sandwiches go out the window and we grossed $150. I still have a nervous twitch from it,” said Big Ass Sandwiches co-owner Lisa Wood.

Weird Fish in the San Francisco Mission District had a problem with the level of publicity one Groupon-like service brought its way. Restaurant owner Timothy Holt told Bloomberg that a simple miscommunication with an employee left the restaurant unable to honor a Scoutmob coupon. This led to a string of one-star reviews on Yelp, a highly influential consumer review website.

“It was a little brutal,” Holt told Bloomberg.

A small business Groupon checklist

According to retail consultant Bob Phibbs (aka the “Retail Doctor”), small businesses must adjust to the viral phenomenon of deep discount coupon sites like Groupon, as the potential to attract new customers is tremendous. However, such coupon services should be approached with a plan in mind. Here are some things Phibbs suggested small businesses should consider before diving into Groupon and its competitors:

• Is it right for your business?
• Discount non-sale items only
• Make sure you’re well-staffed
• Negotiate for the best coupon deal
• Track redemption and ROI

Sources

Bloomberg Businessweek

Groupon corporate blog

Real Time Marketer

Rice University study

Low margin companies should use Groupon cautiously

(Photo: Hailgumby/Flickr/CC BY-SA)

When it comes to shoplifting, some thieves may rationalize that it really doesn’t matter what they steal because department stores mark up their prices anyway. They may feel that it isn’t really hurting anyone, as they are not actually stealing from someone in particular. The truth is someone does have to pay for it somewhere along the process.

Do retailers gouge with huge markups?

Many store owners do mark up the prices anywhere between 25 and 50 percent, but this is mainly to cover additional operating expenses such as taxes, repairs and utilities, to name a few. So although stores may buy products at a retail rate, the profit they earn is very small, perhaps as low as 3 percent. It is the store owner who ends up paying for any loss, and there are typically no payday installment loans available to the self-employed during cash flow crunches.

Shoplifters try to justify their stealing

Some shoplifters may justify or reason with themselves by thinking the items they steal are petty items with little value. Here’s an example: Suppose that all a person stole was a single pack of gum. But what if several individuals stole a pack of gum each? Because of the lack of profit, the business would need to sell several additional packs to balance it out. This is detrimental to small businesses that are barely making it in today’s market and economy.

When people steal consumers pay

It is not only the merchant who will pay, but consumers will have to pay more to make up for what people steal. Think of how sad it is for those who only have a set amount of money to live on, such as those who are disabled or retired. Think of all the hard working individuals who are still living on short term loans for people with bad credit to make ends meet. There is also the risk that some stores may have to go out of business because they have lost so much money and can no longer operate due to shoplifting thieves. When this happens, people may have to travel farther to get needed medicines because the one they used to go to went out of business.

Shoplifting is a crime

Shoplifting is a crime, and the thief will pay if caught one way or another. Sometimes you may be caught by managers working within the store and only be given a warning, if lucky. However, most would want to teach the shoplifter a stern lesson and have harsher punishment rendered perhaps by calling the police and having them arrested, even if it was the first time. We live in a time where many small businesses are barely breaking even, so they will most likely not put up with it. They want to teach shoplifters that there are consequences to their actions, and those results can be severe.

The SBA offers emergency loans to victims of emergencies and disasters. Image: Flickr/U.S. Geological Survey

In some areas of the country, low interest Small Business Administration loans that have been heavily pushed are not proving to help. This cash advance product has been promised to homeowners and business owners to help rebuild after emergencies. Offered at 4 to 6 percent interest, the SBA offers this supposedly quick loan solution to victims of floods, fires and the Gulf oil spill.

The purpose of SBA loans

In “everyday use,” SBA loans are intended to help small businesses build and develop. The SBA is actually a loan guarantee entity. It does not offer loans online but instead works with banks to provide loans. Disaster loans, also administered through the SBA, are given to both individuals and businesses who have been affected by disasters. Like all loans, SBA loans consider the credit of borrowers and their ability to repay. Unlike other loans, SBA loans are intended only for individuals who “are having difficulty accessing other credit.”

Denial rates for emergency loans

SBA emergency loans are often initiated or offered very soon after an emergency hits. In Massachusetts, for example, the SBA has announced that loans of up to $200,000 are available to homeowners to rebuild after floods. Businesses will be able to take out loans of up to $2 million, with interest rates as low as 2.75 percent. However, in Louisiana as many as 70 percent of SBA loan applications are being denied until BP pays out damage payments. In Tennessee, about 66 percent of flood emergency loans are being denied.

Appealing loan denial decisions

The incredibly high rate of denials for emergency victims who need a loan is causing a lot of frustration among disaster victims. SBA loan programs are intended to help, but they cannot help if most people cannot access the credit. The SBA does have an appeal process that allows applicants to provide new information, show proof of altered circumstances or correct information in the original applications. In the end, though, these loans usually end up going to individuals who show proof they can repay them — and that can be very tough to show after a disaster and in the tough economy.

Sources

The Tennessean
Boston.com

More and more small businesses are shuttering their doors -- but not for lack of credit. Image: Flickr/alancleaver_2000

A bill designed to help smaller banks make more loans to small businesses is about to be voted on by the U.S. Senate. This bill will help create $300 billion in available capital to help small businesses. Banks in the lending business, though, are saying the extra quick cash advance won’t actually create more small business loans. The concern is that it doesn’t matter how many short term loans are available, there simply are not enough credit-worthy small businesses.

Small business loan program

The U.S. Senate is set to vote this week on a bill that will send $30 billion to community banks. That money is intended to create $300 billion in small business loans. This emergency loan is intended to increase the available credit for small businesses and create jobs. The money would be available for banks with assets of less than $10 billion. The National Federation of Independent Business and American Bankers Association both support the bill.

Lack of creditworthy small businesses

Many of the banks that are a target for this small business lending bill are saying it will not help. Banks do not want to let people with bad credit borrow money — that is what caused the problem in the first place. The highest demand for loans, especially for small businesses, is from borrowers who have bad credit. Without sales and profitability, businesses are very reluctant to take out loans.

High small business defaults

There are several indicators that say that small businesses are in need of more than just loans. The Small Business Administration reports a default rate of almost 7 percent already this year. Bank of America has reported that 14 percent of small business loans were charged off already this year. A credit card firm that specializes in small businesses ended up going into bankruptcy after more than 50 percent of its cards went into default in 2009.

To get the funding they need, small businesses must rely on the only credit left. Image from Wikimedia Commons.

Contrary to popular belief, there is still credit for small businesses to obtain. Unfortunately, the credit they can obtain isn’t in the form of a business loan from a bank or the Small Business Administration as much anymore.  These days, more small businesses are having to rely on credit cards.  A lot of funding that used to be readily available for small businesses just isn’t there anymore, and unless you’re running a Fortune 500 company, it’s hard to get the help you need.

Small business credit cards booming

According to CNN Money, more small business owners are having to rely on their credit cards to get the funding they need.  Many who apply for business loans are getting denied, but getting approved instead for a credit card.  The first quarter of 2010 saw a reduction of $40 billion in lending to small businesses, which is the lowest level since 2008.   Less than half of small businesses looking for funding in 2009 were actually able to secure a loan of any sort, and as of June of this year, the portion of the stimulus package that was dedicated to small business lending lapsed into oblivion.

What is in the way?

The normal way a small business gets a loan to get off the ground, or help them expand, is through either a small or mid-size bank.  There is also the Small Business Administration.  However, smaller banks do not have as much liquidity as they used to, and the SBA stimulus funding has run dry.  When a business owner applies for a loan, to buy equipment or start a company, they can pledge certain things as collateral, like property.  Since property isn’t as valuable anymore, less credit is going to be made available. They are forced then to rely on the one source of credit that’s readily available, which is credit cards.  If a piece of property isn’t as valuable anymore, it’s hard for a business to get mortgage loan modification to free up cash.

Someone is reaping all the benefits

An installment loan from the SBA includes a minimum term of seven years.   Credit cards, on the other hand, can take forever to pay off if one gets locked into making only minimum payments.  The difference between the credit card that John or Jane Q. Public has and a business owner has is that a business credit card is not covered by the CARD Act.  The main source of funding for credit cards is the biggest banks.  Bank of America, JP Morgan Chase, Citibank and Wells Fargo all lend huge amounts of money on credit cards.   Wait a moment; who was it that got the most bailout funds again?

Further Reading

CNN Money

http://money.cnn.com/2010/07/14/smallbusiness/bernanke_lending_credit_cards.fortune/

NY Times piece about SBA loans

http://boss.blogs.nytimes.com/2010/07/11/s-b-a-lending-plunged-in-june/

Many small businesses are struggling and relying on SBA loans to make ends meet. Image from Flickr.

The Small Business Administration has been charged with helping businesses weather the recession, and money is running out. The 7(a) lending program provides loans, personal and large, to small businesses around the country. The program, which was funded by the American Recovery and Reinvestment Act, is currently in a holding pattern, waiting for more money.

How the SBA provides low cost loans

The Small Business Administration itself does not give instant money to business owners. Instead, the government agency backs up loans made by banks. With the SBA “insurance policy” against default in place, banks are much more willing to act as money lenders to often cash-strapped small businesses. The stimulus package authorized the SBA to waive fees and guarantee up to 90 percent of a loan’s value.

The effect of SBA loans

Small businesses are often forced to rely on credit and loan lenders to keep their businesses going. Over just a three-month period of April, May and June, the SBA lent out $3 billion over 12,123 loans. Compared to the same quarter of 2009, that is 21 percent more emergency money for cash-strapped businesses. The program, however, is still waiting for re-authorization, which is leaving millions of dollars of loans in limbo.

The SBA loan queue

Since the official authorization for SBA loans expired in May, the agency has been forced to queue requests for loans. There are currently 419 borrowers waiting for more than $123 million in SBA-guaranteed funding. Because these SBA loans are often one of the very few types of credit available to these businesses, the agency is scrambling to help them find financing. Given the length of the recession thus far and the fact that the economy is not yet growing at a steady pace, it is almost for certain that programs such as the SBA 7(a) program will need to continue providing support for small business.

Small businesses showing no signs of current incentives to expand and grow

The National Federation of Independent Business (NFIB) compiles monthly and quarterly statistics on small businesses in the United States. Some of the areas covered in their “Small Business Economic Survey” include projected business expansion, earnings changes, sales changes and expectations, price estimates and changes, just to name a few.

The NFIB states that its federation includes some 350,000 members. Conducted among member businesses, the federation’s May 2010 “NFIB Small Business Economic Trends” survey discovered the following very interesting facts.

Small businesses report higher earnings

Small business earnings for the first quarter of 2010 have increased 9 percent, and up 12 percent from the end of the first quarter of 2009. The reason small businesses are experiencing higher earnings for April 2010 may be due to a rebound in the economy, but it still is too early to say whether this is the case.

Small business sales are rebounding

Small business sales peaked in late 2005, before the U.S. housing bubble burst. At this peak, sales for small businesses were at 15 percent. By early 2007, sales dropped to 5 percent. In January of 2008 that number dropped to -8 percent, and later dropped to -31 percent in mid 2009.

Since hitting that bottom, small business sales in the United States have risen. At last, sales were reported at -15 percent as of the first quarter of 2010, which is 30 percent below the 2005 peak of 15 percent. This 2005 number was taken before the beginning of the fallout of the housing bubble during that same year, and before the corporate banking derivatives in the autumn of 2008. Sales expectations have been in negative territory for 23 of the last 28 months, from January of 2008 to April of 2010.

In June of 2008, small business prices peaked at 32 percent. During the first quarter of 2009, small business prices reached a bottom of -25 percent. These prices declined for more than six months until early 2009. These statistics show that many small businesses, due to low sales, have had to lower prices to move inventory, which means that price deflation is occurring for many small businesses in the U.S. economy for over part of the past two years.

Small businesses borrowing less

The number of small business owners borrowing at least every three months hit its peak in April of 2006 at 40 percent. One year later, that number had dropped three percentage points to 37 percent. By the end of the first quarter of 2009, the percentage borrowing every three months had dropped seven points to 33 percent, and by April 2010, it had dropped a total of nine percentage points from its peak of 40 percent in 2006. This shows that small businesses, which are over 95 percent of the companies in the United States, are cutting back on expansion plans and, therefore, are not hiring as many new employees.

The ‘Citizen Consumers’ are the key

Capital expenditures by small businesses hit its peak in March of 2005 at 36 percent of the businesses surveyed, with capital expenditures hitting a low of 17 percent twice in December of 2008 and June of 2009. In April of 2010, it climbed just above the low at 19 percent. This shows that banks are lending less, partially due to the current banking crisis.

Also included is the fact that citizen consumers are significantly cutting back on discretionary spending and buying expensive new durable goods, if absolutely necessary. This is partially due to fears of the weak economy and losing their jobs. Many are using installment loans online to fund some purchases. And it is the U.S. consumer economy (which is over 75% of our nations GDP) that drives small business growth and expansion. It is the central factor that is contributing to the weakness in the current U.S. economy, which is clearly shown in the survey conducted by the National Federation of Independent Business.

Sources:

• Wikipedia NFIB entry: http://en.wikipedia.org/wiki/National_Federation_of_Independent_Businesses
• National Federation of Independent Business (NFIB): http://www.nfib.com/Portals/0/PDF/sbet/sbet201005.pdf
• US Small Business Administration: Office of Advocacy: http://www.sba.gov/advo/press/06-17.html

Now that the recession has officially been deemed over by experts, it’s still a difficult time for business owners. For a long time, legislators have been focused on health care and that has taken the focus off of good lending practices and financial aid for businesses. Small businesses are now seeing some hope at the end of a long tunnel because President Obama is refocusing on credit lending for small businesses in an effort to increase jobs.

Unsecured loans and the unemployment rate

The unemployment rate skyrocketed during the recession. That was a main part of the problem; without money, consumers stopped spending. When consumers stopped spending, businesses suffered and were forced into layoffs that added to the number of unemployed. Jobs were eliminated and millions of Americans were left scrambling to make ends meet.

Legislators know that to truly turn the economy around they need to find ways of spurring businesses into creating jobs. One way to do that is to start lending. If businesses can find money for expansion, they can start creating full-time work to employ the millions of Americans who are currently in need of steady work. This is why the news that the Obama administration is focusing on revamping lending laws is so critical to the business world.

Concerns of business owners

Since the recession has been deemed over, the top priority is to get the economy functioning efficiently.  People are creating jobs and pushing growth, and unsecured loans are an important part of prompting a change. That and handling the heightened cost of health care for employees top the list of small business owners’ concerns. In addition, federal taxes are also high on the list of issues owners would like squared away more quickly. A January report by the National Small Business Association showed that only 61 percent of small businesses were able to procure adequate financing and that number was down from 78 percent in August of 2008.

Handling health care costs

Healthcare cost regulation is an important part of the small business world. Though the president put it on the back burner for a few weeks, that doesn’t mean it won’t come up again in the very near future. Some analysts are hoping that the competition between private and government-back healthcare providers helps to regulate the industry and bring costs down. Not only would that give small businesses some financial relief, but it also it would open the door for money to be utilized elsewhere.

The future of unsecured loans

In the future small business owners should expect to see considerable changes in the world of unsecured loans. Though rules will still be strict, there will be newfound focus on where the money, once procured, should go. The government is doing all it can to help businesses try to put the money into creating jobs, but only time will tell if that is truly the result of its efforts.

Money making ideas for kids are growing in popularity because they are a great way to teach children about business and finance. As more adults realize the value in instructing children how to make fast cash or how to grow money over a long period of time, new and creative ideas are being sought. Instead of buying children items that they long for or giving them an allowance to save, money making ideas for kids are being used to empower children with skills they can use for a lifetime.

While concepts of chores for cash or a lemonade stand aren’t new, more contemporary money making ideas for kids are far more creative and profitable, such as:

Stock investing

With the growth of online stock investing, parents are finding that it is easier than ever to teach their children how the stock market works and how money can be made through investing. Of course, the parent is the one actually making stock purchases, but many are doing so on behalf of their children. This idea is particularly worthwhile for children who are enthusiastic about certain brands. By researching these brands and showing children how shareholders are actually profiting on sales, children are able to get a sense of how important their spending really is. With small investments and reinvesting their earnings, children are also able to learn how to make fast cash or, in some cases, how misjudgments can actually be costly. Either way, stock investing is one of the best money making ideas for kids in that it offers a broad education on finance and an understanding that changes how a young person sees the consumer-driven world around them.

Small business

Another great money making idea for kids involves starting a small business. Although Cameron Johnson is now a successful adult entrepreneur, his journey into business started when he was only seven years old and started his fast cash business by selling vegetables door to door in his wagon. From there, Cameron went on to start several other small businesses, including a greeting card and stationery business and a highly profitable Internet business. Perhaps one of the most oft-told stories about Cameron’s business acumen is of the time he bought thirty beanie babies from his sister for $100 and then resold them on eBay where he eventually averaged $50,000 per year in sales. Not long after that, Cameron was making $15,000 per day in his Internet business. As he learned the ins and outs of commerce, Cameron grew into a totally self-sufficient teenager in charge of his own financial destiny. Lessons learned, from replenishing supplies to marketing to handling his own banking, are lifelong skills that every child can profit from. Today, Cameron is an accomplished author and entrepreneur, but the early training that he received as a child entrepreneur are what has propelled him to the millionaire businessman he is today.

Non-profit business

While some kids are only interested in fast cash to buy the latest toy or finance a trip to a local amusement park, some have more altruistic concerns. Money making ideas for kids also include ideas that help kids help others. This is evident in young people like Craig Kielburger who, at only twelve years old, started his own non-profit company for human rights called Kids Can Free the Children. Another young activist, Zach Bonner, raised thousands of dollars to help homeless children and led a walk from his home in Florida to the White House in an effort to raise awareness on the issue. Young people like Craig and Zach love to help others and have made it their business to do so through massive fund raising and public awareness campaigns. While learning valuable business and finance lessons, these young people are also teaching the world about the power that lies in even the least of us.

Money Making Ideas for Kids Offer Limitless Opportunities

These money making ideas for kids are but a small sampling of the limitless possibilities available for young people to make money now. Children who learn lessons about earning their own money now are not only positioned to be financially stable adults, but they are far less likely to waste money now or in the future. When figuring out which of the hundreds of money making ideas for kids is a good fit for an individual child, adults are advised to consider the child’s current passions and work with the child to create ways to segue that passion into a profitable business.

Photo from Picasa

President Obama’s message to banks

As the President looks for ways to invigorate the lending industry, consumers are using payday loans to help them out of financial binds. Recently President Obama encouraged top bankers to “help keep the fragile recovery from faltering by boosting lending to small businesses and getting behind the overhaul of financial regulation.” He added, “We rise and fall together.”

The President is referring to the post-recession financial world. Due to the economic downturn many lenders closed their doors. Loans were defaulting in mass numbers and to mitigate losses, loan companies stopped lending. They also took on some questionable tactics to save their business. Lending limits were cut without notice, interest rates were increased and fees were out of control. Consumers suffered as a result and had to manage on their own with savings, alternative loan options and family help.

The banks response

In response to the President’s address, banking lenders stated that they are getting mixed messages. On one hand they are trying to extend loans to consumers, but on the other hand, heavy regulation from the government is making it difficult. They cite that the regulators are continuously cracking down on banks wanting them to lend more prudently. They are also pressing banks to keep larger coffers of funding to protect against potential problems. The larger money reserve means they have less money to hand out in loans.

Obama explained, “America’s banks received extraordinary assistance from American taxpayers to rebuild their industry, and now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.” The president is pushing banks to lend again. He added that each financial institution should “take a third and fourth look” at all loan applications that come to them. Lenders should do all they can to spur on the lending market.

The payday loan market

The meeting between President Obama’s cabinet and the banking industry was thought of as successful. The President’s lecture was part of an initiative to tie bank lending to the problem of high joblessness. US Bankcorp CEO Richard Davis was one of those in attendance. He believed that the meeting was “highly productive” and said that banks have lagged when it comes to lending like they did pre-recession. Proof of their slow return to normal is the booming number of payday loans currently being extended. Small lenders that offer unsecured personal loans and short-term loans are finding huge numbers of customers coming to their doors.

Peggy Champ, manager of Pay Day Now, in Pittsburgh, Pennsylvania said, “Our store is open from nine in the morning until ten at night and we have to have it fully staffed the whole time. We’ve had to go through an intense hiring process twice since June of this year to keep up.” Pay Day Now is finding that their alternative loan product is one of the few reliable loan options Americans have.

Lenders

President Obama’s plan seems to be working with the major players in the banking industry. For example, Bank of America CEO Kenneth Lewis stated that his bank would lend $5 billion more in 2010 then it did in 2009. JPMorgan Chase and Company said it would increase lending by $4 billion. Both companies are focusing on four areas of development coming 2010:

• Increased mortgage modification possibilities for homeowners

• Heavy support for the new financial regulations and legislations

• More lending to small and mid-sized businesses

• Control over CEO salaries

The changes in the banking industry are hopefully going to bring borrowers new possibilities in terms of finding funding. Until changes happen, however, many borrowers are looking to payday loans, short term loans and small unsecured personal loans to make it through their monthly budgets.

Apply here for Payday Loans

Need a tune up when it comes to home business ideas?

There are so many aspects to this life we live, yet most of us are still stumped when it comes to thinking of legitimate business ideas. While the concept is simple, there are other factors such as competition or finance which may end it before it has begun. But if you don’t try, you will not succeed and that is a fact. It’s time to take the first step to changing your lifestyle forever. In this article, I would like to explore a few start-up business ideas which might help get your creative juices flowing.

Why Depend On Others – Become Self Employed!

When people explain their reasons for not wanting to become self employed, the number one excuse they use is because they like the security. I can understand the idea of security, but the definition of security should not involve working long, arduous hours with little reward and the knowledge that your “boss” upstairs has the power to end your comfort zone on a whim. Please don’t be misled, because I am not by any means suggesting that if you have your own business you will work fewer hours. In all odds, you will work more hours but you will be content doing so because it will be your own creation that is benefitting from the extra work. Many people do in fact enjoy their jobs and fair play to them, but for those of you who are tired to death of it all, why not become self-employed?

A Few Business Ideas

When considering business ideas that will work well for you, it would be wise to take some time and think about what you enjoy. If you could make work for yourself by doing something you enjoy, then you would be living the dream, rich or not. As an added bonus, you are most likely to succeed, because doing something you love affords the motivation to stay strong – and motivation is one of the key requirements to starting a business. Whether you would like to work away or from home, there are millions of ideas out there. Find one that works for you. Start researching, because there is nothing you can’t do. All you need is knowledge, and luckily that’s free to learn (wisdom is the expensive one). Below are a few ideas to help you grasp what is possible:

• Open a recording studio
• Become a professional writer or photographer
• Start a window cleaning business
• Become a music teacher
• Create your own informative Web site
• Sell products online
• Start your own mobile mechanic company
• Become a consultant in a familiar field
• Become an arts and crafts dealer
• Start a paintball business
• If you are a martial artist, consider opening your own dojo
• Create your own handyman business

Do Some Research Before Development

I implore you to have a look around for further motivational ideas. If you are serious and give it everything you have, you will eventually succeed. It isn’t rocket science, as there are a wide variety of people who have pulled it off. What it comes down to is the will and motivation to at least try. Just remember that once you have found an avenue to pursue to do plenty of research as well as market research on the product or service you will be offering.

Online resources can help your small business.

If you’re a small business owner and have managed to survive the economic downturn of 2008 for this long, then you’re already a survivor. Of course, many small businesses have survived by using credit cards to improve cash flow and take care of expenses. That debt can build up very quickly, and can become unmanageable if, for instance, you are unable to meet minimum monthly payments on your credit card.

Options To Get Back On Track

While this article is not legal advice, it presents some options for getting your small business back on track even if it is heavily burdened with credit card debt. If you have a credit card for your business, but the business’s credit history is tied up with your own (a very common scenario), then you should be doubly tenacious in eliminating that credit card debt because it can affect your personal credit history severely.

Government Help Is Available

The government has a Seed and Venture Capital Finance page, which contains a wealth of information on how to obtain government grants for small businesses and how to approach private investment firms that invest in small businesses on behalf of the government. The government’s Loans, Grants, and Taxes page is another site where small businesses can easily find not only grants open to them, but also private “angel” investors who provide venture capital for small businesses.

The National Association of Small Business Investment Companies (NASBIC) is the professional association for the Small Business Investment Company industry and is the oldest venture capitalist organization in the world, having operated since 1958. You can find out the specific steps to take to obtain financing from Small Business Investment Companies by visiting their web page that lays it all out, step by step. Though microfinancing is mostly thought of as a program for developing countries, there is microfinancing available in the U.S. as well. Grameen America provides small loans to low-income individuals for investing in income generating activities. It also helps small businesses build credit by reporting to Experian, which is one of the three main credit rating bureaus in the US. A wealth of information is available on their website, www.grameenamerica.com.

Research Is Key To Sucess

The common thread for obtaining help from any of these institutions is that you must have clear and adequate records, including a well thought-out business plan to approach them for assistance. The Small Business Administration has instructions for how to write a business plan to help you create a business plan to get the financial help your business needs.

Micro-loans are small, short-term loans made to people who do not have access to more mainstream lenders, like banks. Making and servicing a loan involve administrative costs for lenders, therefore they will often refuse to make loans that are too small, to people that lack collateral, or to people that do meet their risk standards.
Micro-loans were originally designed to help the very poor in developing countries get access to enough funds to build a business, but the concept also filled a lending gap in the developed world and today most countries have one or more micro-lending institutions. Although there are many different types of micro-loans, most micro-lenders are non-profit organizations that emphasize helping the poor.

Micro-loans in the United States

Although the concept first gained traction in the developing the world, it was soon realized that micro-loans could also help small businesses without access to bank loans in the United States. The first major micro-lender in the United States was ACCION USA, which is still the country’s largest micro-lender and has loaned about $210 million to more than 20,000 small entrepreneurs.
ACCION USA is a non-profit organization that offers very small loans to small American businesses that do not qualify for traditional loans. The average ACCION USA loan amount is $5,300 and the loss rate is very low compared to traditional loans. Because micro-lenders are typically non-profit organizations, most micro-loans have very reasonable interest rates, as well.

Micro-loan borrowers

Mico-loans are generally targeted to very small businesses run by one or two people, such as independent child-care workers, caterers, small restaurants and food businesses, and small specialty shops. Independent contractors – like construction workers or craftsmen – are also frequent recipients of micro-loans. Micro-loans are also popular short-term bridge loans for slightly larger businesses, to help with immediate cash flow issues.
Many micro-lenders focus on lending to entrepreneurs in immigrant communities who cannot qualify for mainstream loans. Small businesses in poor or depressed areas also tend to receive more micro-loan attention than those coming from affluent areas.

Can you qualify for a micro-loan?

There are currently more than 250 micro-lenders operating in the United States, each with its own focus and minimum loan-qualification requirements. Small business loans from ACCION USA require the applicant to have a credit score of at least 575, not to have filed for bankruptcy in the previous twelve months, to be current on all bills and expenses (especially rent or mortgage payments), and to have less than $3,000 in outstanding debt. Small businesses must also be operational, have all licenses and permits necessary to conduct business, and have a regular cash flow sufficient to make monthly loan payments. Other micro-lenders have other standards, some of which are considerably less stringent than those of ACCION USA.

Micro-loans and the current economy

Not surprisingly, the recession and credit crunch have seen a large increase in applications for micro-loans. Although the default rate on micro-loans has increased some, it has not come near the levels seen in most other lending sectors. Most non-profit micro-lenders receive a significant portion of their operating capital from the government (via the Small Business Administration and a separate fund administered by the Treasury Department), so they have remained active lenders throughout the crisis. While larger loans – those of $10,000 or more – have become less common, small loans of between $3,000 and $8,000 have become easier to obtain. The loans are small, but they are often more than enough to solve temporary cash flow problems or to launch small business start-ups.

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Your small business is ready for its start. A small loan can help get it off the ground. (Photo: flickr.com)

When anybody decides to start a business, whether large or small, they must factor in the issue of cash. Without money, a business won’t succeed, let alone lift a few inches from the ground. It isn’t surprising that three-quarters of start-up businesses close within the first year. Many people are left baffled and ask themselves why this happens. Small businesses usually close their doors because they don’t have enough capital to keep things running (lights, gas, Web hosting costs, etc.).

Plan Carefully

Before you start reaching for your credit cards and scheduling interviews with banks to acquire loans, you’ll need to know what your business is and if you possess enough knowledge and passion to build it. What I mean by passion is having enough love and intellect for the field you’re interested in to continue believing in it, even when the money isn’t pouring into your bank account. Here are a few questions to ask yourself:

• Is my business a store-front, online, or home-based business?
• Am I offering a product, service, or both?
• What are the costs for my start-up business?
• Do I posses enough knowledge and passion to run my business?

These questions are very important to small business success. The costs differ depending upon whether you’re going to have a storefront or home-based business, of course. These days, most businesses operate brick-and-mortar and virtually, offering products and services in person through franchised store placements, throw mail-order and online. Just be careful not to put the cart before the horse. Once you decide in which way to start your business, you can later decide on branching out and using different marketing techniques.

Am I Offering a Product, Service, or Both?

There are lots of businesses that will offer a combination of products and specialized services. You see this type of business function in psychic medium services. They sometimes offer tarot card readings, books, candles and talisman products. Professional speakers will offer their services as well as their own books, tapes and other products to potential customers. Try to answer the question of which your business will offer: a product, a service, or both?

How Much Does it Cost to Get Started?

This question should tie in with the first one, “Is my business a store-front, online or home-based business?” We’ll use an online business as an example. If you decide you want to start a business blog, you will need to factor all of the things necessary to successfully make a profit, or at least break even until things pick up. Web hosting prices could be as little as $80 a year, but others can cost up to $300. The difference in pricing depends on what the Web hosting company’s incentives and benefits are.

Let’s say Web hosting costs $80. You also have to register a domain name for your blog. The cost for a domain name (Web address name) can go for $8.00 at Web sites like GoDaddy.com. Other than the $88.00 spent on a blog URL and hosting, no other costs are needed, other than a computer and Internet connection, of course.

A Small Loan Helps

Even in the case with a small figure of $88, a small online business could use a small loan to help get things rolling. The process isn’t all that difficult. First, seek out places that offer payday loans. In most cases, online cash advance Web sites like Personal Money Market can offer you a small loan that will get your business up and running in no time. These companies will even work with you so that you can decide when to pay them back: one week or two weeks. It’s your choice. Good luck with your new business, and remember that Web sites like Personal Money Market can help.

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Many consumers are worried about debt relief as they reach retirement age.  With news of Social Security and Medicare being tapped out within the next few decades, Americans are looking for other options to retire in comfort.  Fortunately, there are some jobs that still focus on pension plan guarantees.  Here are some industries that still support their retirees.

• Public-Service Sector workers.  Local, state and federal government positions are still highly attuned to retirement benefit payouts.  According to the Bureau of Labor Statistics, almost 80 percent of state and local government workers had traditional pensions last year. Olivia Mitchell, director of the Pension Research Council, stated “Police officers, firefighters, teachers and judges have always had pension plans.” She also noted that these careers are all putting more money into firming up their workers’ retirements to provide security for them.
• Large, private companies. Although pension plans are more difficult to find in the private sector, a recent study showed that 21 percent of private-sector entities had a plan for retirees. This is a huge benefit for employees who know they will have a guaranteed payout for their retirement years.  Consumers need to look for employment, but be aware of the retirement funding statistics. A recent poll showed that only 9 percent of companies with less than 100 employees and 34 percent of companies with more than 100 employees offer traditional pensions. Management and professional positions are also the most likely to offer  retirement plans, regardless of the size of the company.  Service-sector jobs are the least likely to have any retirement benefits.   Geographically, mid-Atlantic, Northeast and Pacific coastal regions are the most likely to have jobs with retirement benefits, in particular in their large metropolitan areas.
• Businesses with less than 10 employees.  Although most small businesses don’t offer retirement funding, exceptionally small offices normally do. This means offices with less than 10 employees, commonly doctors’ offices, law offices or family-owned businesses.  Author and expert on retirement Fran Hawthorne stated, “Very often, the owners of small doctor’s offices set up the pension plan because they want a tax-free way to put money aside for retirement. … The law requires that if you do this, you must provide the same pension for all your employees based on income.” This is encouraging news for Americans who want to work in the small business sector but still have a plan for retirement and debt relief in their elder years.

The key to success

Employees who are working for smaller businesses need to know that retirement funds are most beneficial when they stay with a company for an extended period of time.  Payouts are maximized based on time spent servicing a company.  It’s also beneficial to know that the sooner employees get retirement plans in place, the better they may fare at payout time.  Hawthorne added, “If you don’t get a job with a pension now, your (payout goes)  down every year because more and more pensions freeze each year.”

Planning for retirement

Planning for retirement is a number one concern of Americans today.  With unemployment running high, debt relief being sought and foreclosures increasing, people are wanting to store away money for the future.  There are still some ways to wisely handle the situation and live comfortably in the golden years.

Export cargo isn't just for big businesses (photo: flickr.com)

If you’re a small-business owner and want to start exporting your products, the federal government offers programs to help you expand. Most of these programs can stand alone or work in conjunction with other programs to help increase sales.

SBA and EX-IM

The two main programs available to help small business start exporting are the Small Business Administration and the Export-Import Bank of the United States. A plethora of information on  these two programs is available online, through seminars, and from one-on-one contact.

Utilizing SBA and EX-IM services

To best utilize the services of the SBA and EX-IM, businesses need both solid credit ratings and good business plans. Many colleges work hand-in-hand with the SBA to help develop solid business plans satisfying the SBA’s requirements. A business plan for the EX-IM needs to have the same elements along with a focus on the exporting plans of the company.

SBA

Both start-up businesses and expanding businesses can benefit from services offered by the SBA. These services include helping to find financing for start-up or expansion, qualifying as a minority business, acquisition of minority-based projects, and disaster assistance.

EX-IM

The EX-IM acts as an insurer for the seller on foreign sales. Basically once accepted, the foreign buyer submits the invoice to the EX-IM, along with the necessary information and fees. The EX-IM then runs a credit check on the buyer and determines whether it meets the criteria for financing the goods to be purchased. The EX-IM was established by the government to facilitate exports to foreign countries. Generally it will finance 90 percent of the purchase.

Basics

When working with both the EX-IM and the SBA the seller may then borrow on its SBA revolving credit line to purchase and produce the product it is selling. Once this is shipped, the seller may borrow up 75% of the total sale, if needed prior to payment from the purchaser. At this point the seller’s receipts can also be run through a factoring company.

Example

Here’s an example of how the process works. John Doe has a contract to produce 100,000 boxes of peanuts for export to an approved country. He takes his contract, adds in shipping costs for a final amount, fills in the paperwork, and submits this along with information about the buyer to his contact at the EX-IM. The EX-IM then runs a credit check on the information. If the credit check is approved, and if John Doe is strapped for cash, he takes his paperwork to the SBA where he has an account and borrows enough money to produce and ship the peanuts.

After shipping

Once the product has been shipped, John Doe takes the receipts to either the SBA or a factoring company where he can borrow up to 80 percent of the total amount, after deducting any previously borrowed amounts. He won’t want to borrow more than he needs, as he will have to pay interest on this money when he pays off the loan with the proceeds of the sale. He can then begin the process over again.

Conclusion

This basic overview of the services offered by the SBA and EX-IM provides an idea of some of the export-assistance options available to small businesses. Most major cities in the United States have an SBA office. The offices cover regions and the people who work there will travel throughout the region for appointments.

The EX-IM has contact numbers and seminars offered throughout the country listed on its website. Both agencies are knowledgeable about what small businesses need in order to expand into the export market, and will offer suggestions to better facilitate their services.

As long as they're OK, consider installment loans for your business's short-term financial needs. (Photo: flickr.com)

Small businesses are looking to installment loans rather than stocks for funding options. Before the recession, many small businesses were investing in the stock market, trading for added revenues. Dallas-area financial planner Chance Woods stated his clients have a “mixed feeling of relief at stock gains since March, and are reluctant to fully commit to the market.” Research is showing that most small business owners are feeling the same hesitation. The financial hit many of them took due to last years’ recession is having a huge effect on their confidence to move towards stock investing again.

Woods added, “People have been on an emotional roller coaster over the last two years, so they’re not quite ready to say, ‘I’m all in’…it’s going to take some time for them to recover and a lot less market volatility than we’ve seen.”

Alternative Investing

Although alternatives to stocks like money-markets and savings accounts were popular, it seems now that the return on investment is so low, business owners are hesitant there, too. According to Bankrate.com, the current rates for both modes of investments average about 1.5 percent around the country.  Seeing the lackluster interest rate, many business owners are opting for immediate installment loan options rather than wait out slow and minimal returns of other investing vehicles.

A Case in Point

Donnie Griffin, owner of a management consulting firm in Palm Springs, California, invested his money wisely. However, when the recession hit hard, he sold a good portion of his $250,000 portfolio. One week later, the stocks saw their biggest gain throughout the recession period. Griffin agreed he had “unfortunate timing” in his decision, but he also said that he wouldn’t venture back into the stock investing market easily. “Once you make a decision I think you’ve got to just ride it out… having experienced this drop, I’m better experienced for the next time one comes around.”

Griffin is not alone. As a business owner, his sentiments are shared nationwide. Many people lost a lot of money in stocks during the down economy. Although Griffin is patient, a lot of others aren’t. They want a more solid way of guaranteed money. Installment loans for a lot of qualified small business owners are proving to be that option. These types of loans are quick and simple for the qualified applicant. They potentially can bring money in when small business owners need it most. Rather than wait out a long-term investment and then reap only a small to moderate return, business owners are more confident in alternative types of loans.

No Guarantees on the Market

The most difficult thing for investors is that there is never a guarantee of market growth. The market is volatile and may take another turn for the worse. Robert Haley of Advanced Wealth Management stated, “It’s a gamble to hold and not sell now, and it’s a gamble to go all-in.” He believes that the way to mitigate the gamble is to build a long-term portfolio, but not rely on it for immediate funding. His belief is that a portfolio is never for immediate (or even moderate-term) funding. A better option may be immediate installment loans, or assets that are quickly liquidated. These are the types of funds that small business owners should have readily available for times of trouble.

Billboards may become a thing of the past (photo by openphoto.net)

Small business owners are looking to installment loans to make it through the rough economy. With industry giants like GM and Chrysler falling into bankruptcy, it’s easy to see how smaller businesses are in precarious financial situations. Part of the problem is cyclical. As business owner Terry Grant, owner of a small chain of dry cleaners in Orlando, Florida, stated, “It’s hard because to get more business we have to advertise; but to advertise we need more business.” Many businesses have the same problem and are looking for ways to afford the advertising needed to reach more customers.

Advertising is being cut from budgets

Unfortunately, every business is suffering and advertising outlets of the past, like magazines, newspapers and radio stations, are also suffering. They are trying their best to give customers small perks in efforts to keep their business. Meg Schaeffer, manager of the sales department of WBRT Radio said, “It’s hard because we want to keep people buying our ad-time, but the first thing people cut in times of trouble is marketing. We are trying to throw in perks and bonuses, but only our most loyal customers are still here.”

Advertising is changing

One popular way to advertise is online. Many small business owners are turning to free advertising online with social marketing and blogging. Nancy Everett, owner of a graphics design firm in Seattle, Washington, stated, “We need free marketing and online tools are the best…all it takes is time and you can create an online buzz about your product quickly and easily.” There are some simple ways of using the internet to build a brand and they are becoming more and more popular as internet usage expands.

Social marketing works

Using Myspace, Twitter, Linkedin and Facebook to market is the simplest way of getting a name out. Each of these social marketing sites boasts millions of users who check in daily to communicate, market, and build their businesses. The key is consistency. Everett confirmed this, adding, “I dedicate two hours every other day of my work week to social marketing and networking. Whether it’s tweeting people or uploading new pictures to Myspace, I make sure that there is activity on my online presence….and I always communicate with those who talk to me.”

Consistent communication is the key

That’s another key for business owners who use online marketing—consistent communication with potential buyers. Many owners realize the importance of using any communication wisely and following up. Everett added, “Even if it’s just to say ‘Thanks’, it’s all about relationships and building them… you don’t know if that one ‘thank you’ will lead to a new contract or job.” By making the most of an online presence, businesses can use funds procured through installment loans, bank loans and grants for running the business, rather than supporting a heavy advertising budget.

Blogging is user-friendly and it attracts business

Blogging is one of the most effective ways of maintaining a user-friendly and pleasant website for a business. Some tips to blogging are:

1.  Always provide fresh content. Marcus Gentry, marketing professor at Pepperdine, stated, “You want to make the customer glad they went to your website. Outdated content won’t help that cause. You need to post something as often as possible to engage your viewers.”

2.  Stay connected to visitors by asking for input, feedback and opinions. One of the best ways of captivating an audience is to ask for their opinions. Business owners should incorporate a “comment” section on their website that gives visitors an outlet.

3.  Owners should use blogs as a way to reach search engines. Blogs can keep a website popular because of the constant addition of content with keywords. There are plug-ins available to create keyword friendly URLs and business owners should find them and use them wisely.

Try social marketing – it’s free!

These are all great ways for business owners to find free advertising and marketing possibilities. In times like these when businesses need installment loans or bank loans and may even have to liquidate assets to stay alive, it’s good to know that marketing does not have to come to a standstill. Marketing and advertising are what will bring new customers in and, hopefully, generate more income.

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