by abundantadmin | Mar 7, 2023 | Blog
Starting a small business and reaping from its success are two different things. For some entrepreneurs, the legal go-ahead to sell goods and services feels outstanding. However, that’s not all. You must have the strict business sense to keep your small venture growing daily. Keep reading the following tips to navigate your business for more benefits.
Hire Professionals When Necessary
The personnel you staff your small business with will inevitably determine its growth directly and indirectly. Qualified workers, for instance, will deliver excellent results, treat customers passionately, and stay up with the trends since they have the necessary business soft skills and vice versa. Therefore, consider a well-structured recruiting strategy to hire professionals to fill the available job openings.
Engage Your Customers
The primary goal is to meet your customers’ needs in time and as they wish. Customer relationship management forms the backbone of maintaining the existing ones and attracting new prospects. Therefore, learn to take time to understand what your clients require, how often they make purchases, and what they’re likely to buy next. Once you have this information, tailor and match your goods or services to the fast-changing customers’ specifications.
Build a Unique Brand
In an already-flooded industry, it’d be unwise for small business owners to reproduce the duplicate of existing products into the market. The rule of thumb is to identify a market gap and channel all your energy and resources to fill it. Further, build a distinctive brand that’s uniquely identifiable and easy to pick from other substitutes. And the only way to attain this is by delivering unmatched quality products to your customers.
Utilize Social Media
These days, it’s easy to reach your customers and promote your new products with just a click. It’s also a way to improve convenience and timeliness on your and buyers’ sides. Hence, create a solid online presence, create a referral program, use e-payment plans, reply to interested customers, and give feedback on time; the list is endless.
Success is every small business entrepreneur’s dream, regardless of size and niche. And, since its accomplishment calls for finances, keep the lack of it far away from drawing you back from achieving your goals. Abundant Wealth Financing has your back! Contact us today and experience more about the available funding options. You’ll be happy you did!
by abundantadmin | Feb 28, 2023 | Blog
he process of obtaining a small business loan is a complicated one. However, military veterans have access to special programs through the United States SBA. Before you decide to pursue funding to grow your small business, it’s important to understand your options and the requirements for qualification.
VA Small Business Loan Explained
As a former member interested in starting a business, you are going to need some business funding. While you may be able to obtain funding through a traditional lender, you also have access to VA small business loans through the SBA. The Department of Veteran’s Affairs has nothing to do with these small business loans.
Just like traditional funding, these loans are provided by a lending partner and require repayment with interest. The difference is the SBA works with lenders to establish guidelines to reduce risk to the lender. This typically means lower interest rates and longer terms.
Types of VA Small Business Loans
There are several options available for veterans who are interested in a small business loan, including:
- Standard 7(a) loans
- Military Reservist Economic Injury Disaster Loans
- Micro-loans
Qualifications for VA Business Loans
The qualification requirements vary based on the loan type, personal credit score of the applicant, and other factors. The basic requirements for the 7(a) loan program are:
- Business exists for profit
- Engaged in/propose to do business in the United States or it’s territories
- Business owners have invested equity
- Other alternatives have been exhausted
Other Financing Options for Veteran Business Owners
If the above options do not match your needs, there are other programs available for veteran business owners, including:
- Street Shares
- Service-Disabled Veteran-Owned Small Business Program
- Hivers & Strivers
Resources for Veteran Business Owners
If you plan to establish your own business, there are several resources available to help, including the following:
- National Veteran-Owned Business Association
- Regional Business Associations
- Veterans Business Outreach Centers
- American Corporate Sponsors
- Entrepreneurship Bootcamps
Do You Need Finance Options for Business Growth
If you are a United States military veteran interested in starting or growing your small business, you have options. Contact Abundant Wealth Financial to learn more about these options and more.
by abundantadmin | Feb 21, 2023 | Blog
If you are a business owner who is pursuing an acquisition, there are certain things that you need to keep in mind, including:
- Growth opportunity offered by the target company
- Purchase price
- Financing terms
If these things do not align, there’s a chance that the acquisition will fail. One of the most common mistakes is to focus on the purchase price without considering the present and future growth plans of the target company. Two of the most challenging aspects of a business acquisition is securing the required capital and the most ideal financing terms.
Acquisition Financing Options
When it comes to business acquisition financing, there are several options available and each will have its own unique set of eligibility criteria, cost, expectations, terms, and covenants. These options are:
- Bank Financing
- Seller Financing
- Asset-based Financing
Bank Financing
If the business you are trying to acquire has a lot of assets, a strong profit margin, and positive cash flow, you should be able to obtain traditional bank financing. On the other hand, if your goal is to acquire a service company with a lot of receivables and short-term assets, it can be harder to obtain traditional financing.
You can improve your chances of getting a loan by finding a lender that has historically financed the type of business you are trying to acquire. If the seller has a relationship with a financial institution, try talking to them. Also, you don’t have to accept rejection- just find another lender to discuss your options with. After all, different lenders use different qualification criteria.
Seller Financing
For small- to middle-market transactions, the seller may be willing to finance a portion of the transaction. The easiest way to do this is for the buyer to make a down payment and the seller holds the promissory note for the balance of the purchase price. The business, as well as its assets, act as collateral.
The terms vary based on the specific agreement between the parties.
Asset-Based Financing
Recently, asset-based financing has increased in popularity as a viable funding source for business acquisitions. An asset-based loan is a revolving loan secured by the assets of the business. Typically, the loan is 65% to 80% of the value of the asset class.
The primary difference between traditional financing and asset-based financing is what the lender considers when underwriting the loan. In the case of traditional financing, the lender looks at the cash flow first and then the collateral value. On the other hand, in the case of an asset-based loan, the lender considers collateral, debt load, and quality of earnings.
The primary disadvantage of asset-based financing is the interest rates, which range between 12% to 28%.
Equity Financing
Equity financing involves securing equity from sources such as angel investors, private equity firms, and venture capitalists in order to raise the capital to pay the seller as well as to put working capital into the business.
At this time, most private equity firms are looking for deals with $2+ million in earnings and $10+ million in revenues. However, the owner must be willing to give up 51%+ of the company. So, the buyer won’t have debt but will have to give up control of the company.
In addition, most of these firms are looking for a 25% minimum rate of return on their investment. While each has its own expectations and exit strategy, generally they hope to sell the business or take it public within a certain period of time.
Mezzanine Financing
Mezzanine financing is a combination of debt and equity, involving a variety of technical terms such as equity investment, senior/subordinated debt, and private-placement transactions.
In recent years, the size of the mezzanine industry has grown over the past year and is expected to continue to grow as we move into the future.
Ensure Your Deal is a Success
In order to ensure the best chances for success in any deal structure and the best terms, make sure that your offer and/or business plan is well structured. You should base your plan on the combined business- not just the current one. The plan should show how combining operations will improve collateral and cash flow, as well as increase growth. If you need more help with your business acquisition financing, contact Abundant Wealth Financial today.
by abundantadmin | Feb 16, 2023 | Blog
If you have an annuity and have short-term funding needs, you may want to consider annuity financing. This is the process of taking a loan directly from the annuity or using its value as collateral for a loan from an outside source.
Why Consider Annuity Financing?
There are a couple of reasons you might want to consider annuity financing, including:
- Emergency needs such as a down payment on a home, supporting a family member, home repairs, or medical expenses
- You don’t want to give up your annuity due to tax and surrender penalties that would lower its value
How Does Annuity Financing Work?
Before we explain how annuity financing works, we’ll explain the basics of deferred and non-qualified annuities.
A deferred annuity has an accumulation period in which it grows. At the end of this period, you can annuitize it, which converts it to an immediate annuity. This is when your payments start. This type of annuity can only be used for a loan during the accumulation period.
A non-qualified annuity is funded with post-tax dollars, while a qualified annuity is funded with pre-tax dollars. You may be able to borrow money during the accumulation phase on your non-qualified annuity. However, financing with a qualified annuity may be more complex.
Here are your financing options:
- Take a loan directly from the annuity
- Use the annuity as collateral
Advantages & Disadvantages of Using Your Annuity for a Loan
Annuity financing has several advantages and disadvantages, which we will explore below:
Advantages
The advantages of annuity financing are:
- Annuity financing allows you to avoid surrender charges. If you surrender a portion or all of the annuity for cash, you’ll be required to pay a fine. In some cases, these may cancel out any gains you’ve accrued.
- Annuity financing allows you to avoid paying taxes and early distribution penalties. If you liquidate an annuity before you are 59.5 years old, you’ll be charged a 10% penalty on the amount that you withdraw.
Disadvantages
The disadvantages of annuity financing are:
- You may have to pay an early distribution penalty if you do not pay it back within the specified period of time. In addition, the amount withdrawn is subject to income tax by the federal government.
- You reduce the amount that is available to earn interest, which reduces the growth of the annuity.
- There are certain restrictions, which means this may not be the best use of your tax-deferred status.
Is Annuity Financing a Good Idea?
As a general rule, using your annuity for financing, selling it for a fraction of its worth, or surrendering it are the last resort. If possible, its best to have emergency funds set aside in flexible products such as an online savings account. You may also want to consider meeting with a tax advisor or other financial professional to discuss your goals and get some advice. If you need help, contact the experts at Abundant Wealth Financial. We can help you examine your options to get the funds you need.
by abundantadmin | Feb 14, 2023 | Blog- Marketing
Like most technology, web development adapts and changes seemingly at the speed of light. As a coder, you may be concerned with keeping up with new methods and industry trends. Therefore, these are a few ways you can maintain and improve your coding skills.
Practice Regularly
If you want to improve your basketball skills, your coach will tell you to increase your practice and do it regularly. The same strategy works for many other types of skills, and coding is one of them. The more you practice, the better your coding will be. Therefore, sit down and practice every day.
As you continuously use your skills, you will begin to see mistakes easier, your typing and analysis will be accelerated and you will learn about new practices early in their development.
Pursue Education
You can also take courses on new coding processes, and you should continuously learn about internet security and any new strategies that can help you secure your programming. Test out code editors, and when you find the one you like best, learn it inside and out. Some of these tools have features that can accelerate your productivity as well.
Also, don’t just stick with the programming language you know. However, don’t worry about learning every coding language that is out there. You can gain a general knowledge of those that are regularly used in web development while mastering the fundamentals of programming in general.
Challenge yourself. Find tutorials on new languages or build plugins that can help you and others. However, don’t get discouraged if you struggle with a concept or project. Remember that you may be working on projects developed by individuals with decades of coding experience.
Take Regular Breaks
Regular downtime is also valuable. You should not spend all day every day focused on improving your coding skills, especially if your regular job involves coding. You can actually lose productivity if you don’t spend time away from your projects and practice time.
Share Your Knowledge
The best way to learn and solidify your knowledge is to teach someone else. Therefore, you can improve your web development skills by sharing your knowledge with others. As you develop lesson plans, you will improve your organizational skills and teach your mind to put your instructions in the right order.
Remember, you don’t have to write about code, especially if you aren’t a strong writer. Instead, develop a video course or slide presentation that details different tips and tricks with a specific type of programming language or code editor tool.
It will take a bit of time and dedication, but you will find that by implementing these tips, your programming skills and productivity will increase. Contact Abundant Wealth Financial to learn more about effective web design services.
by abundantadmin | Feb 7, 2023 | Blog
If you were to ask a small business owner where to get financing, they would probably be able to immediately list a few options. Chances are, they have a bank account somewhere, so the bank may be their first suggestion. Then, they may recall where they got their financing when they needed it.
However, if you were to ask them where to access private equity financing, they may not be so sure. Most of the time, when this topic is mentioned, they will suggest that you check with an attorney or accountant, or they may mention a private equity investor that approached them at one time.
Unfortunately, small business owners who are seeking capital and private equity investors don’t connect due to a variety of factors. This is typically because small business owners don’t know where to turn or there is a shortage of capital providers in their area. In addition, most private equity investors are only interested in businesses in a specific industry, certain cash flow profiles, and of a certain size.
Private equity investors look for companies they understand, with a management team they can connect with. They also prefer to invest in companies where they can add value. Beyond that, they place priority on transactions that benefit their fund.
In order to determine if private equity financing is right for your business, you must understand that there are advantages and disadvantages:
Advantages: Private equity financing provides you with capital beyond what you would get through traditional financing, as well as the chance to pursue a growth/acquisition initiative.
Disadvantages: Private equity financing can be expensive- traditional financing is almost always going to be cheaper.
The biggest problem isn’t financial but allowing an outsider in as a business partner. In traditional financing, the lender isn’t involved with the day-to-day operations of your business. They need regular statements and payments, and need you to abide by the terms of the agreement- but that’s all.
A private equity investor, on the other hand, is hands-on. If you do not have a board of directors, they will make one. If you do, they will take a seat on it. Then, they will set a strategy and create rules for future infusions of capital.
Private equity investors want to work with entrepreneurs that will be good partners and accept advice and feedback for growing the company.
If you’re interested in pursuing private equity financing for your business, take your time and do your research. Don’t wait until you need the money to get started with your search but build relationships and bridges ahead of time. Ask your accountant, lender, or attorney if they know of any private equity investors in your industry and area. Additionally, contact Abundant Wealth Financial for more information. We can help you determine if private equity investing is right for you.
by abundantadmin | Jan 24, 2023 | Blog
If you’re interested in starting your own business but don’t know where to start, a franchise might be a good option. However, unless you are independently wealthy or you have savings, you are going to need financing for your business.
In this article, we’ll offer you a few funding options for financing your franchise. We will also explain what you should and should not do when it comes to franchise funding.
Options for Funding Your Franchise
When it comes to funding your franchise, there are several options, including:
Franchisor financing: some franchisors are willing to finance the purchase of the franchise.
Traditional bank loans: if you have a decent credit score, a solid business plan, and a relationship with a bank, you may be eligible for a commercial bank loan
SBA loans: the SBA offers several loan programs, including the 7(a) or 504 loans. In this type of loan, the SBA guarantees a certain percentage of the loan, making it attractive and less risky for the lenders.
Alternative lenders: if you do not qualify for commercial loans or SBA loans, you may consider alternative options. The approval rate is much faster- but the rates are high and terms are shorter.
Personal assets: if you do not have the cash to cover your startup costs, consider using your assets to fund the venture- as long as it does not impact your own financial stability.
ROBS (Rollovers as Business Startups): typically, if you withdraw money from your retirement before you are eligible, you must pay a penalty. However, the ROBS allows withdrawals without penalties.
Crowdfunding: some people choose to turn to online forums to raise the money for their franchise efforts.
Loans from friends and family: if none of the above options work for you, consider asking your friends and family for a loan- but keep in mind that this could cause the relationship to become strained.
Do’s & Don’ts of Franchise Funding
When it comes to financing your franchise, there are certain things that you should and should not do. We’ll explore these below:
Do’s of Franchise Funding
Below are a few of the things you should do when you’re seeking funding to buy a franchise.
- Carefully weigh all of your options, considering the advantages vs. disadvantages of each one.
- Make sure to do your research and make sure that your personal finances are in order.
- Obtain a pre-qualification to find out ahead of time just how much you qualify for.
- Decide if you want to own more than one unit.
Don’ts of Franchise Funding
Below are the things you should not do when seeking franchise financing:
- Don’t give up on obtaining funding
- Don’t underestimate your funding needs
- Don’t assume all providers are exactly the same.
- Don’t wait until the last minute.
Learn More about Financing Your Franchise
If you want to start your own business but are hesitant about starting it from the ground up, a franchise may be a good option. If you want to know more about financing a franchise, contact Abundant Wealth Financial today. We can help you evaluate your situation and determine which option is best for you.
by abundantadmin | Jan 19, 2023 | Blog- Marketing
When Facebook rapidly became the go-to social network, it’s hard to imagine anyone didn’t foresee the huge potential Facebook could provide in terms of marketing. Facebook advertising has certainly lived up to its potential and continues to provide advertisers with a rich platform in which to market their goods and services.
You don’t have to be a social media expert in order to make Facebook work for you. Here are a few tips to help you get started on your next Facebook ad campaign.
1. Know Your Target Audience or Audiences
There’s no reason to target just one audience. In fact, marketers know different audiences are drawn to different types of advertising. Facebook advertising makes it easy to target several different audiences.
2. Utilize Audience Insights
Facebook has a nifty tool called Audience Insights at your disposal. Use it. It will help familiarize you with a specific audience so you can determine whether or not that audience is the right audience for your product, or if your ad is the right ad for that audience. It is an essential tool for the success of your campaign.
3. Enticing Images
The image you use is the first thing people will see when they look at your ad. If your image doesn’t appeal to them in some fashion, they won’t bother with the ad copy. Use an image that grabs, pushing them to want more information. Facebook has designed its marketing tools around the theory of the importance of the image. Obviously, it works.
4. Where They Land
Landing pages are standard practice in ad campaigns. It’s not your home page. It’s not your “about” page. It’s a page designed for this specific campaign. Your audience needs to understand why they were led to a specific site and your landing page provides that information. Just like your image, your landing page needs to be striking enough that it has them wanting to know more.
5. Establish a Budget
If you establish a budget, Facebook will automatically keep your CPMs within that budget. Facebook will then do the bidding for ad space on your behalf.
When you put all these strategies together, you have a killer ad campaign. Best of all, Facebook advertising tools do the majority of the work for you. Each step is important and each step is vital. All you have to do is bring an image and some copy, then watch the action happen. Contact Abundant Wealth Financial and we will put together an effective Facebook marketing strategy for your organization.
by abundantadmin | Jan 17, 2023 | Blog
Equipment financing is a great option for small business owners who can’t purchase the equipment they need outright. Unfortunately, many equipment leasing companies bury the true costs so that you don’t realize what you’re paying until you’re so far in that it’s difficult to back out.
While there are online equipment financing calculators, many of them only reveal the lowest cost, which most shoppers do not qualify for. Also, most of the ads that you see only discuss 4% rates, which is not the norm.
Problem with Deceptive Leasing Calculators
Equipment leasing companies that do this believe that if you know what it will really cost you, they won’t be able to get your business. They want to make you dumb. However, most small business owners want to be informed so they can make smart business decisions based on facts.
For example, if a piece of equipment is going to cost you $800 per month, but you’ll make $3,800 per month with it, you can use that information to determine if it makes sense for your business.
The truth is, if your credit score is low, your payments may be double or more than what the payment calculators tell you- depending on your particular situation.
Why are Equipment Lease Payments so High?
Honestly, not all equipment lease payments are high- it depends on your credit score and cash flow. If these are low, equipment leasing won’t be cheap. After all, for lenders, loaning money to small businesses for the purchase of used equipment is risky.
For example, let’s say you purchase a car to drive to work in. This is low-risk lending because you have a job and will probably be able to make the payments. If you don’t, the lender just has to send a tow truck to pick it up and it can re resold easily.
On the other hand, if you have an equipment loan and your business has a hiccup and doesn’t have a high profit margin for 6 months. Plus, equipment tends to depreciate quickly. The lack of funds makes it hard to make your payments. Unfortunately, if you don’t pay, it’s much harder for the lender to send a tow truck to secure it. Plus, since it’s equipment, it’s harder to find a buyer for it- especially if business is down across the industry.
Therefore, when you are purchasing equipment, unless you finance through the dealer, the rates charged by financing companies are fair. After all, in order to remain in business, the lender must make enough to compensate for the people who can’t or don’t make their payments and make a profit.
Ready to Secure Equipment Financing?
If you need equipment to start a new business or want to upgrade your current equipment, contact Abundant Wealth Financial for more information. We can help you understand your options and guide you through the process.
by abundantadmin | Jan 10, 2023 | Blog
You’ve been told that it takes money to make money. Unfortunately, the world of financing can be complicated- especially if you’re just starting out. Traditional options require several years in business, excellent credit scores, and consistent revenue- which most new businesses simply don’t have.
This is why many small business owners turn to creative financing- it provides a variety of options to fund a business. You’ll have to think outside the box, but chances are that you will find exactly what you need.
7 Creative Financing Options
Below, we’ll take a closer look at 7 creative financing options:
Bootstrapping
Bootstrapping is using your own money to finance your business. While this does decrease your liability, it also impacts your ability to grow. If you are starting your own business with your own money, it may take years to get going. A business loan, on the other hand, could have you launching within a week. However, bootstrapping means that you don’t have to worry about making debt payments- your business is 100% yours.
Friends/Family
You may also want to consider asking friends and family for help. However, you’ll need to have the agreement in writing- and be very specific about the terms. This keeps everyone on the same page and can help avoid spoiling your relationship.
This is one of the most popular- and most affordable- options for funding your small business. In fact, research shows that over 40% of startup funding is obtained through friends and family.
Competitions
You can potentially earn startup funding by pitching your business idea to investors in a competition. You’ll be competing with other entrepreneurs- so there’s no guarantee that you will get the funds. Still, it will give you a chance to improve your pitch skills, draft a viable business plan, and meet other entrepreneurs and venture capitalists.
Accelerators
A startup accelerator can provide a variety of services to help you launch your business including funding, networking, and counseling. In exchange for financing, they will require equity, but you don’t have to pay it back in cash. Since they are investing in your business, they also want to help you succeed.
Grants
Many people believe that loans and grants are basically the same types of funding. This isn’t true. A lender allows you to borrow money to be paid back, with interest. On the other hand, a grant provides money with no repayment required. However, there are usually restrictions on how the grant money can be used based on the grant source.
Angel Investing/Venture Capital
Both angel investors and venture capitalists offer money to new businesses, as well as partnership relations, mentorship, and networking. However, venture capital requires an exchange of equity. This may seem like a good option in the beginning, but you are potentially giving up a portion of control for the lifetime of your business.
Crowdfunding
In recent years, crowdfunding has become a popular option for securing business funding for startups. In this type of funding, you present your idea to the public via a platform such as Indiegogo, GoFundMe, or Kickstarter for them to make donations. However, keep in mind that when using these platforms, they get a percentage of your donations.
The world of business financing can be complicated. Unfortunately, many entrepreneurs don’t qualify for traditional financing. Fortunately, there are some creative options available. If you need guidance, contact Abundant Wealth Financial to learn more about these options.
