Small Business Funding Investment Opportunities

You should never let a lack of funding stop you from attaining your goals in business, especially if that goal is to expand your business. There are many small business funding and investment opportunities that small businesses and entrepreneurs are able to take advantage of.

Funding sources, such as banks, government institutions, venture capitalists, and angel investors, are very diverse, so it is important to see what the requirements are for each type of lender or investor.

If you are seeking funding for an existing business or company, lenders are interested in finding out the history of your company. The kinds of things they will want to learn are things such as if your company has a good track record of management and performance skills. They will also want to know if you have the ability financially to be able to repay a loan, as well as what your current cash flow situation is. This will allow them to then figure if your business is capable of handling any extra debt. This is actually a good practice, because as much as you want to succeed, lenders want to see you succeed, as well.

Another factor that will come into play is you own personal credit history. If your own credit is great, you will get the loan; however, if you have problem credit or no credit at all, you may at first be declined, but you can talk with the lender to let them know what steps you have taken to turn your life and business around.

One way to make your chances of obtaining a loan better is to put up some form of collateral. This will help reduce the risk being taken by the lender in the event that you should default. This also shows lenders that you are willing to put your own personal property up for your business which shows confidence in your endeavors.

Sometimes, a loan will be declined because the presentation has been poorly written, there has not been enough collateral put up, there is not enough cash flow, or there is simply not the requisite amount of management experience needed.

Some of the main sources for small business funding and investment opportunities are:

Banks or credit unions, and sometimes finance companies are the primary sources of funding for small businesses. These institutions have small business departments that are experienced in handling small business loans. The best place to begin your search is at your own personal institution. It can work in your favor if you become more than just an acquaintance of the manager and the staff at the bank. Shy away from using the ATM for all of your business, and go inside and be friendly. This does not guarantee that you will get the loan, but it will help your presentation go much more smoothly.

As you can see, there is money out there for small businesses to take advantage of. With a carefully prepared proposal and the right approach, you will be able to obtain the funds that you need that will match your ability to repay.

Property Investment – Help, My Property Won’t Sell

It is commonly said that you make money when you buy, not when you sell. However, often this lesson is not learned until you try to sell a property. I remember the first property I tried to sell. It was a two-bedroom unit in a small complex of eight. A lovely unit… only four years old in an upmarket growing suburb. I was moving to another state in Australia and wanted the property sold, to enable me to buy another home in Queensland.

The property took over 12 months to sell. Three contracts fell over due to finance issues for the purchaser. That was my first experience in selling a property. The emotional roller-coaster was challenging. Initial excitement when the offer was negotiated and accepted, followed by confidence when the contract was signed, followed by disappointment when finance was not approved for the purchaser. The final emotion was frustration when the contract fell over. This happened three times.

Prior to this experience I believed properties took on average three months to sell, depending on the current market conditions. A few years later, we decided to sell one of our properties. This time it took close to two years to sell.

The property was a 2000 square metre property in a beautiful coastal holiday town. The property had zoning that allowed for the development of eight two and three-bedroom townhouses. The property was ideally located on the main road, a couple of hundred metres from the shopping precinct and beach, had two street access and was very close to community amenities such as a child-care centre, school and bus stop.

One month after we purchased the property we were offered $70,000 more than what we had paid for it. We had no intentions of selling the property at the time. Later, on realisation that we did not have the experience, contacts or time to develop the property, we decided to sell it. The first two offers we received were from developers. The offered a 12-month settlement contract. They would pay an upfront amount, with the balance paid in 12 months. This contract suited them. They got to hold the property with little money down. Negotiations could not get the terms of the contract suitable to both parties, and both contracts stalled.

In hindsight we should have accepted the contracts. These were the first two offers we received. We expected more offers to come in that didn’t have a 12-month settlement term. The market turned, developers pulled out of the market, residential construction slowed down and our property took an additional 18 months to sell. Holding a property for an additional 12 months to two years is not good from a cash-flow perspective.

It is important to consider the type of investor you are, before you risk buying a property that is wrong for your investment strategy. Don’t assume you can just sell a property if you need to. When selling, the market is in control. The market determines when it wants to buy, what it wants to buy and for how much. This experience provided one of our biggest lessons in property investing… know what type of investor you are, and be that type of investor only.

Small Business Success Or Failure Ratios Must Be Taken Into Consideration

Despite what many people think not every franchisee succeeds. Usually when a franchisor fails it is either problem with management, marketing, lack of hard work, or lack of working capital and cash flow. Sometimes, the reason franchisees fail is due to lack of support from their franchisor. Nevertheless, the success rate of franchisees is nowhere near 100%. Some franchises will succeed, while others will not.

If you are going to invest in your own business, and take the risk and buy a franchise, but you have to consider your real chances of success, and the potential for failure. One way to do this is to find out the number of terminated franchises, or the number of franchises that have gone out of business, as a percentage of how many franchisees are in existence total. This can provide you a ratio.

Think to yourself, if you are willing to invest your real money, and all your time and effort it will take to build your business on that level of risk. For instance if 68% of the franchisees are successful, but 32% have failed, then your chances of success are only two-thirds. Are you seriously willing to take that risk?

Now many franchisees are very optimistic when they first purchase their franchise, and they believe that they will follow the system and work harder than everyone else, plus they believe in themselves and consider themselves better than the franchisees that have failed, which have come before them.

Whereas, this might be true, it might also be overly optimistic and incorrect thinking. At some point during the franchise purchase decision, you will have to look in your mirror and decide if you really have what it takes, and if you are willing to take that risk. If not don’t buy the franchise. Please consider all this.