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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
In a general sense, online lending- also known as alternative lending- is funding that does not come from a traditional bank. In the past, this included government loans, credit unions, and other credit lines structured like bank loans but from a different source. Now, these are part of the traditional lending market because the terms, criteria, and regulations are the same.
Alternative lenders, on the other hand, are not traditionally part of the financial industry, use different methods to communicate with clients, do not use FICO or other metrics for qualification, and use different approval processes than traditional lenders.
Due to these differences, online lending offers several advantages for borrowers:
- More options for obtaining funding
- Faster funding, which is useful during a financial emergency
- Smaller amounts available
Types of Alternative Lenders
The category of alternative lenders is a catch-all for anything that falls outside of traditional funding. Some of the most common types of alternative loan include:
- Lines of credit
- Peer-to-peer programs
- Merchant cash advance
- Working capital loan
The type that is most appropriate for your business depends on your situation.
Tips for Finding Safe Online Lenders
Before you go online and apply for the first loan offer you find, take some time to research your options. These tips can help you reduce your risk of falling victim to a scam:
- Do they have a physical address? Even though they operate online, a legitimate lender will have a physical address visible. You can then use Google to verify the address.
- Do they have third-party verification? Look the company up on BBB to find their listing and rating. If the company meets or exceeds security and privacy standards, companies like TRUSTe will award their seal.
- Do they have customer reviews? You can’t always use reviews to fully form your opinion because people are more likely to post a negative experience than a positive one. However, find out what people are saying- look for patterns in the comments- to help you determine the safety of the company.
- Who owns the website? Look the site up on WHOIS to find out who owns it and how long it has been around. This will help you determine if they are truly an online lender.
Considering Alternative Lending to Fund Your Business?
Legitimate alternative lenders understand that their success depends on their reputation for protecting their customer’s information. These companies will do everything they can to protect themselves and their customers. If you’re ready to move forward with applying for an alternative loan, contact Abundant Wealth Financial today. We can help you find the funding you need.
There are many financial metrics you want to understand as a business owner. The better you understand what’s going on with your capital, the better equipped you are to nudge your company in the right direction. That way, you can reach your goals and enjoy continued success and growth. Two of the most important financial terms are cash flow and profitability. What do these terms mean?
What Is Cash Flow?
Put simply, your company’s cash flow refers to the capital that is coming in and going out of your monthly ledger. It’s a ratio that determines how much money you’re making versus how much you’re spending. You can check your cash flow at any time of the month to see how much working capital you have available for your needs.
What Are Profits?
Profitability has to do with your overall revenue compared to your expenses. It looks at whether you’re selling enough to cover your costs and have money over and above at the end of the month. The goal is to have a profitable business that always generates more revenue than what’s required to run it.
Why Is Your Cash Flow Important?
If your business has cash flow problems — which is surprisingly common in many industries — it means that you have trouble keeping liquid capital available to use during the month. You may be selling more than enough to cover your expenses in terms of revenue, but that money may not be available at the right time.
For example, imagine a manufacturer that sells $100,000 worth of finished goods. The raw materials cost $25,000. On paper, the manufacturing company is poised to make a huge profit. What happens, though, if the customer who purchased the goods requires three-to-six months to make payment? Even though the sale is already finished and billed, the capital isn’t actually in the manufacturer’s hands yet.
This becomes a big problem if the suppliers require the manufacturer to pay for raw materials in 30 or 60 days. To avoid problems, the company would need an alternative source of financing to cover the cost until the money from the sale comes through.
Which Is More Important: Cash Flow or Profitability?
Both of these financial terms are vital. One without the other is a sign of poor financial health. Fortunately, with financing, it’s possible to balance things out. Investing in your business matters so you can continue growing revenue and profitability, which helps your cash flow.
Abundant Wealth Financial offers cash flow solutions to ensure businesses can cover expenses and build up capital for growth projects. Contact our offices today to learn more.
Small business financing can be a complex topic. Even when you ignore all the options that do not suit your business or available assets, there are a lot of options to choose from. One of the most popular types of loans is the hard money loan, but many borrowers get confused about what they are because there seem to be so many different products labeled hard money loans.
Hard Money Defined
The short version is that the term means the same thing as the term private loan, but that oversimplifies the issue. If you feel like there are many different types of loans with the hard money label, that is because there are. You have short and long-term options, collateral-backed loans, and many other products available. What makes them all hard money loan subtypes is the kind of backing they have.
Traditional banks and financial institutions work with the Federal Reserve system, which allows them to borrow at extremely low rates and then lend the money out to businesses like yours. As a result, they only need to actually hold a small portion of the loan’s value in cash reserves of their own. Hard money loans from private investors and financing firms, on the other hand, have the financial resources to back their loans. That is what makes them hard money, as opposed to the alternative soft money loans.
Secured Loans From Private Lenders
If you have asset collateral and apply for a secured loan, you can reduce the emphasis on your credit report and the interest you pay at once. Typically, secured loans also provide you with a higher maximum loan balance because the lender’s risk is reduced by the value of the asset. As a result, asset bridge loans and credit lines are very accessible when you deal with hard money lenders. Those are not the only options, either.
Some lenders also offer hard money versions of the commercial mortgage, making it easier to refinance when you need a large sum of capital. You could even use those loans to buy a new property if you have the right down payment in your company’s cash reserves.
Unsecured Hard Money Loans
If you do not have asset collateral and you are not looking for a large loan, there are unsecured loan options for working capital. The costs are high, but approval processes are fast and loan terms are very short. This allows you to access the capital you need when short-notice opportunities arise, provided you have the income to manage repayment. Keep that in mind when your cash flow is tight and a customer wants to place a big order and keep your other loan options in mind for when you do have those assets to refinance.
Abundant Wealth Financial provides hard money loans that feature fast closings and generous terms. Contact our offices today to get the financing you need.
An abundance of competition in the legal field makes it hard for firms to stand out and build up their practice. Law firms that are looking to boost their profile and attract more clients need to enhance their outreach efforts. If you’re looking to devise more effective marketing directions to get more intakes, here are some key areas to focus on.
Overhaul Your Website
Is your firm’s website up to par? Your web design can make a winning impression on people who are learning about your services online. If you’re not adequately attentive to your site’s performance, however, you could be making a really lousy impression. The first thing that you have to affirm about your website is whether it is fully functional. Unfinished sections and pages that don’t load are a huge red flag. Slow-loading pages are also a huge red flag.
Outdated-looking or visually displeasing design can have the effect of driving people away from a site, and it can undercut your most important law firm objectives. Even if the site’s problems are primarily aesthetic, not updating a site conveys that you aren’t on top of things. If people look at a firm’s site and conclude that it’s too busy to take care of basics with website maintenance, they won’t feel good about entrusting you to handle a complex legal matter.
Find What Works and Repeat It
Use data analysis that gives you a clear picture of how well various types of ad campaigns and engagement strategies are working to generate business. Specifically, you want to see what tactics are sparking interest that brings people to your website site or social media accounts as well as which segments of those leads become your firm’s client. Smartly analyzing key metric points allows you to clearly identify the most effective and cost-efficient law firm marketing tactics that you should employ in your engagement initiatives.
Build a Strong Network for Referrals
Being active in your professional community is a key component of law firm marketing. Make it a point to establish relationships with other legal professionals. Firms refer out clients frequently, and it’s not always because they don’t like the looks of a representation. A representation that involves a highly specialized practice area need or a super busy caseload may make an attorney who is conducting an intake might reasonably conclude that a referral is in order.
Ultimately, investing resources in marketing needs to be a top operational priority for law firms. Well-directed outreach tactics can position your firm for a new phase of growth. Contact Abundant Wealth Financial today to explore our comprehensive marketing solutions.
Over the last decade, the concept of company culture has dominated countless discussions in boardrooms. Though often used as a way for new management to “shake things up,” changing the culture of your business might actually have a profound impact on daily operations. However, it is vital that you go through the process of revitalizing the atmosphere of your company in the right way. This means that you need to become more organized. A strategy for organizational culture can completely revolutionize the way employees and consumers feel about your brand.
Focus on Problematic Behaviors
Being organized in your approach to changing corporate culture will benefit you in many ways. Instead of seeing a problem and immediately assuming that you need to find a solution, you should dive deeper into the reason for the issue. Why are certain setbacks happening? According to experts in the world of modern business, transforming the behaviors of your team members for the better can have more of an impact than simply attempting to solve problems as they appear. Learning more about problem sources will require effort on your end, but the results will prove essential to your future.
Build a Team
Another point to keep in mind about organizational culture is that you are not going to be able to oversee all aspects of implementing your strategy. This is where your management team comes into play. Which members of your staff exude leadership qualities? Target these individuals and ask them to be a part of a specialized team aimed at making the transition to the new company culture as easy as possible. People who are trusted by the rest of your staff are likely to see the best results when attempting to make big adjustments.
Changing the culture of a business for the sake of it might seem like a practical idea, but it actually will cause more harm than good if it is not done for a real reason. You might get pushback from employees and many inquiries about why you are doing this in the first place. To provide real insight, back your decisions up with numbers. Tying objectives to planned shifts in corporate culture is one of the more sensible choices available to you, giving you the chance to make your case with data.
Organizational culture can be a lifesaver when you are trying to make lasting changes to your business operations. Get organized and develop a plan that will breathe new life into the culture surrounding your brand.