Home Based Business Startup Tips

Here we have a few tips on how to own home based business startup to earn money online.

1. Create a product

The only secret of success in this home based business startup is to find out what people want to buy and then sell them what they want. Create information-based products or your own digitally delivered product such as ebooks or tapes etc. Develop your own specific strategy to earn money by selling the product online.

2. Setup a payment system

Get a merchant account as soon as you set up the website to accept online payments from day one. Integrate the system by linking to your website via encryption software. Address security issues by using trusted providers. Get detailed reporting and monitoring of the figures regularly to identify any particular areas for concern.

3. Affiliate program

Get mass distribution through an affiliate program. After creating a website, find an affiliate program such as Clickbank for collaboration. Affiliate program websites are companies that promote products relevant to the kind of site you have. You can be paid for every click or for every sale by the merchant and for every registration with the merchant’s company can help you a lot to earn money 24 hours round the clock. How much you get and how successful you are depends upon your choice of affiliate marketing with your home based business startup.

4. Monitor web traffic

Affiliate merchant directs traffic to his website by providing his visitors fresh content that will keep people coming to his website. Techniques like link building and link swapping, and other Search Engine Optimization techniques get your website links onto other sites where more people can find them.

5. Advertise

For your home based business startup, you need a publicity campaign, search engines or reciprocal linking. Keep the website current with fresh content. Contain something that people will want to keep coming back for. Get feedback with direct articles that have information about your site and by starting a new blog.

First Step to Successful Entrepreneurship: 12 Ways to Cut Off High Business Startup Loans

When it comes to startups, the common problem that most entrepreneurs face today is the money to start a business. Being an entrepreneur is not easy, you have to take risks and move forward with optimism psychology. You need to think of ways by which you can obtain maximum output with minimum input. Well, that’s the basic rule of the business and widely followed by entrepreneurs all over the world. You need to be creative in what you do and innovative in your decisions. Few opt for business start up loans while few look for different alternatives. Bright ideas make a better future and some good initiatives can lead a foundation for you to become a successful entrepreneur. If money is scarce, that does not mean that you put your dream on hold, you always have better options to look forward. So, here are some creative ways to finance your business.

Steps to a Better future

• Sell your product to raise money – Well if you resale your product and find a suitable buyer, then you can raise funds for your business in an effective manner. No doubt there are many successful entrepreneurs all around the globes who started this way and once they complete their target, they expand their business with funds they collect.

• Support from family and friends – It is the traditional way and the most effective way in this contemporary world. You can convince your friends and family to invest or provide small business startup loan which may help you to implement your ideas better without any pressure. This way is much better than taking loans from any other alternative.

• Double Dipping – You can always start a side business to raise funds for your business startup. In this way you will not be under any kind of debt and burden and thus it is the safest way to start the business.

• Selling stuff – Well, sometimes it’s hard to sell out your stuff, but as Jarod Kintz said “Instead of burning the midnight oil, you should try to sell it”. Sometimes you have to compromise to achieve success. You can make good money out of it.

• Credit card – You can use a credit card to finance your money. This is an easy way, but it involves risk. If something goes wrong, then the interest rate goes up at a very high rate.

• Angel investors – It is one of the recommended methods and many leading companies like Google and Yahoo have used it. Angel investors give you the required amount to start up the business. You get a friendly environment and moreover a better and quicker way to deal with business.

• Microloans – You can lookout for various firms providing small loans for the young entrepreneurs. These firms are generally better than taking business startup loan from a bank.

• Get new order and deliver – There are a number of entrepreneurs who receive the order from the customer, but they are not able to supply due to lack of money for the production. There are some companies who provide loan in this scenario. With this you will be able to raise funds for your startup in a better way.

• Real estate – This is one investment which provides greater output if done after a research. Before investing your money, always do a little work to find out the current rates etc and do the right thing. With this you can raise money successfully without complications.

• Cut out liabilities – Well, it’s another creative way to earn good money. For example, you can rent your home for some time and raise a good amount of money by doing that. Many entrepreneurs have employed this way and were successful to earn enough money to start their business.

• Crowdfunding – It is a very popular way among entrepreneurs. In this you can make a good use of internet by finding people having similar thoughts on investing with small amounts. Collectively, these small amounts on adding up will provide you with a better alternative to startup your business.

• Financing by vendors – This is very helpful to obtain the material to sell your product. The manufacturers do not take any payment from you till your product is sold. In this way you get a better extension to sell your goods much efficiently.

After reading these 12 ideas, you must be very confident about your startup. But remember that things aren’t that easy as they seems. You need to work harder to achieve the best out of it. Moreover, just by visualizing ideas in your mind you won’t be able to implement them practically. You must be able to adapt according to the situations and work practically to achieve the requisite aim. Risk is always involved for young entrepreneurs, but that does not mean that you can’t do it. Overcome your fear and be creative and innovative and always ask yourself that do I have what it takes to become a successful entrepreneur?

Startup Compare Bear Helps Kiwis Save on Broadband

Startup New Zealand website comparebear.co.nz has expanded its services to help Kiwis get the best prices for their broadband needs.

The recently launched website, which offers utilities comparison, initially offered only power comparison, but has now expanded to include broadband comparison. The new service launch has already seen thousands of users compare, switch and save on their broadband.

Compare Bear was founded this year by Michael Speight – a former Facilities Manager – and Denis Tyu’kov – a former Financial Auditor. Both decided to quit their career jobs to dedicate their time to helping Kiwis save on their everyday bills.

“In the small amount of time the website has been running, we’ve had tens of thousands of New Zealanders use the Compare Bear website.” says Speight. “From those, thousands have found a better deal on their broadband using our online comparison tool. We saw many users switch and save on their electricity providers using Compare Bear, and now the broadband comparison service is proving to be working just as well!”

“Being able to help everyday Kiwis save on their bills is a really great feeling for us.” adds Tyu’kov. “We set out on a mission to save our customers time and money, and the feedback we have got from them has shown us that we are achieving this mission! There’s not many services available out there that gives users the tools they need to get unbiased price comparisons, and we are happy to now be providing that service.”

With Compare Bear, users answer a few questions – such as their location, usage and speed preferences – and are presented with a range of options best suited to their needs. Each option has a full breakdown of what’s included, so that each plan can be compared by the same standards. If users choose to sign up with another internet service provider, it’s a simple process to make the switch.

With the success of the power and broadband comparison service, founders Speight and Tyu’kov predict more utilities comparison services to come. “The next comparison services we plan to launch is mobile phone plan comparison and travel insurance comparison.” Speight says. “And we won’t stop there either – we can’t wait to continue adding more valuable free comparison services to our website!”

There are no charges to users to use the Compare Bear website – it’s 100% free and easy for everyone to use.

Calculated Risk Mangement for a Successful Startup

What is Risk Management?

It is basically taking risks for your startup in a controlled environment. So, when you take the risk you have got a backup plan to cover fire in case you run out of ammunition in the war zone (market). This is known as Risk Management in the world of startups. I will provide a brilliant example.

A person just started a small business of mobile accessories online. He knows there is enough market out there already that he needs to compete with to outreach his customers. So, before getting into the game he needs to understand that his product is unique and cheap at the very same time. Now, if the product is cheap; how can it be unique. For this particular purpose he needs to visit whole sale markets. When he finds what he needs, next step is placing a bulk order. Now, when he is selling his item online; he will get customers sooner or later. But, what matters is he took a risk placing a bulk order; at the same time he did research for uniqueness and price control. This is what exactly known as Risk Management in the world of startups.

Any start up in this world fails only when it runs out of a credit line. So, it’s completely clear that money is the lifeline of your startup. What needs your attention is Risk Management to check on the expenditure? How can you do that?

1) STOP SPENDING STUPIDLY:- You are not here to impress your girlfriend on a date. Don’t be a show off no one needs to know your spending capacity. Your clients are only seeking some brilliant product packaged with good services. They are not here to see your costly machineries, your heavily salaried employees and your mind blowing infrastructure. This is a big NO. It’s the beginning phase; focus only on good products, good services and amazing marketing. That’s all you need.

2) Don’t run with a blindfold on your eyes:- Another stupid reason for a startup failure is when you keep spending in the wrong product or services without seeking the market survey report. Why? You could lose a big fortune of money that’s why. Your customers are looking for something else and you are not ready to see that with your open eyes instead you choose to cover your eyes like a horse and run straight. Look around understand your market don’t get intimidated by a product or a service you like. Understand what the market needs, the customer’s demands and work accordingly.

I am not saying don’t take a risk. I am just saying don’t take one without a plan.

5 Must-Haves While Looking For A Digital Marketing Agency For Your Startup

Every startup or small scale business holds the potential to grow if it has the right ingredients. The ingredients are the right idea, funding & a professional digital marketing agency to hoist the digital campaigns & plans for such business.

To expand any business’s horizons it has become important for them to be a part of such a digital era. Digital marketing over conventional marketing is becoming one approach that is no doubt output-oriented, steadfast resulting and most of all cost-effective.

A brick & mortar business in today’s time requires a website, social media presence & some key strategies & actionable tasks to evolve as a recognized brand in the market. But before starting with the process, the key is to understand what your startup must look for in a digital marketing agency before partnering with their services – apart from their digital marketing startup package.

Here are the 5 must-haves to look for in a digital marketing firm of today other than digital marketing startup package:

1. Hard to miss – their website

The first thing you need to approach is their website, their website will help you decide how well they can plan for your website’s marketing. Check if their website is up to date and has all the capabilities that any website should host. Their website will speak volumes about their agency, their achievements, competency and the efforts they may be willing to put in your startup’s website to make it trending & best-selling.

2. Referrals for the credibility

It is the most crucial thing to do – to check the company’s profile & market image before extending a contract with them for their service. You can contact their ex-clients or customers to get the preview of their work pattern & check how well they have managed to publicize certain brands in the search engines. The best way could be testimonials & the portfolio embedded on the website.

3. Veteran of the current technology, software & marketing methods

Digital marketing is effortless if it doesn’t house the latest technologies, software, tools & the methodologies. Look for the veterans or experts that are familiar with the latest social media performance monitoring & analytics tools, knows the search engine’s guidelines and can come up with customized strategies suitable to the brand/company profile.

4. Complies well with your startup’s goals & ideas

A well-reputed online marketing agency knows how to come in terms with any startup’s shared goals, nature & idea behind it. An agency must comprehend the nature of business & must revert the strategies or plans that work in their demeanour.

5. Flexible in terms of making communication with the client

Such marketing firm should be easy in terms of bringing right communication on the tables. They should not lapse in terms of communicating the core messages like the process, progress or the suggested actions for the certain project.

It takes the right digital marketing firm to flourish any startup to with creativity, innovation, insightfulness in their coming process.

How to Calculate Liquidation Preference in a Startup Business Venture Capital Financing Term Sheet

What is liquidation preference?

Liquidation preference refers to preferred shareholders’ rights to receive a certain amount for the preferred shares they hold in preference to common shareholders in the event that the company goes into liquidation.

The scope of liquidation preference varies between different term sheets. Some may be extremely favorable to investors, some may be less. However, the purpose of liquidation preference is such that in the event a company goes into liquidation, preferred shareholders will always get something back for their preferred shares before common shareholders get anything. In other words, they will always get more than common shareholders. It is possible that common shareholders will get nothing if the company does not even have enough assets to settle the preference amount.

Example A:

Venture Tech Ltd. has 5,000,000 common shares outstanding.

In a Series A financing, Investors A invests $2,000,000 in return for 2,500,000 Series A Preferred Shares (i.e., purchase price per share = $0.8).

The term sheet of this Series A round provides that:

In the event of a liquidation event, the preferred shareholders will be entitled to receive in preference to common shareholders an amount equal to 2 times the purchase price per share, plus declared and unpaid dividends (the “Initial Payment”). After the Initial Payment has been made in full, any assets remaining shall be distributed to the preferred shareholders (on an as-converted basis) and common shareholders on a pro rata basis.

NOW, Venture Tech Ltd. goes into liquidation and the sale price is US$6 million.

Assuming no declared and unpaid dividends, and all other senior debts, e.g., employees’ wages, secured debts, etc., have all been settled:

How much will the preferred shareholders get?

They first get US$0.8 x 2 = US$1.6 for every preferred shares they hold.

Therefore, the Initial Payment is US$1.6 x 2.5 million = US$4 million.

This gives US$2 million ($6 – $4 million) remaining, which shall be distributed to the preferred shareholders and common shareholders on a pro rata basis.

Therefore, preferred shareholders will get a further US$2 million x 2.5 / 7.5 = US$666,666.

I.e., a total of US$4,666.666.

The common shareholders will get a total of US$2 million x 4 / 7.5 = US$1.333,333.

Total = US$4,666,666 + US$1,333,333 = US$6 million

Example B:

Following example A above, let’s say this time the sale price is US$10 million.

They will get a total of $4 million (the Initial Payment) + $6 million x 2.5 / 7.5 = $6 million

The common shareholders will get a total of $4 million.

Example C (company favored):

Let’s give it a twist. This time everything is the same as above except that the total amount the preferred shareholders will get for each preferred share they hold is capped at 4 times the purchase price per share.

In other words, they first get 2 times the purchase price per share in preference to common shareholders (i.e., the Initial Payment as in Example A and B). All remaining assets will then be distributed among them and common shareholders until the preferred shareholders have received 4 times the purchase price per share (plus unpaid but declared payment, and the Initial Payment). All remaining assets thereafter will be distributed among all common shareholders on a pro rata basis.

NOW, let’s do the math:

Putting aside the sale price, since the maximum total amount the preferred shareholders can get is capped at 4 times the purchase price per price, they in any event will get no more than 4 x $2 million = $8 million (however high the sale price may be).

What is the break even point for the sale price?

Let y be the break even sale price:

(y – 4) (2.5 / 7.5) = 8 – 4

y = 16

Therefore, the break even sale price is US$16 million.

Therefore, the sale price must be at least US$16 million for the preferred shareholders to get US$8 million. If the sale price exceeds US$16 million, they will still get only US8 million, since the maximum amount they can get is capped.

That’s why by setting a cap on the liquidation amount the preferred shareholders can get is company-favored.

The House Cleaning Business Startup Manual – Part III


Spread the word. Let friends and family know that you have started your own home cleaning business. Ask them to spread the word at work and wherever they go. Personal referrals can help at this level to get the first customers. Serve the first customers as good as you can. These customers can be the make or break foundation. If you treat them like king they might refer you to their friends. Word of mouth is the most successful form of advertising for small businesses of that kind. “Word of mouth” can carry your business further and also help to cut down on marketing expenses.

Business Referral Program: I already mentioned the “word of mouth” advertising. Taking this a step further can really help your business to take off. Implement a referral program. Pay customers if they refer new customers to you. This can be in form of cash or free house cleaning services

Start advertising in local newspapers: Concentrate on the smaller local community newspapers and less on the large metro area newspapers. Pricing will be much more affordable. A local news paper in the area where I live gets distributed to about 75,000 residential customers (not households). A business card sized ad in a reasonable location costs around $95.00 per week. You can also just work with classified ads. These ads run anywhere from $10.00 per week to around $45.00 per week. If you can – don’t choose the weekly run, but go for a monthly or quarterly deal. Don’t try to put too much information into a classified ad. Keep it short, but easy to understand. Example: “Affordable house cleaning services. No job too small. Free estimates. (123)-555-1234”

Magnetic Signs or decals for your Vehicle: If you drive a decent looking vehicle use it for advertising. If you drive an old, rusty looking piece of the 80’s – skip to the next section. Car advertising can be very effective if you follow some basic rules. It has to look professional. The message has to be short and easy to understand. Do not drive like a maniac when having advertising for your business on your car. Magnetic signs can be purchased for around $75.00. Decals are available starting at around $25.00. Look at other cars that carry an advertising message to get ideas of what to do.

Flyers: You could print nice looking flyers on your home computer, but I recommend to rather spending a little money on professional printing. Design a flyer first. Then talk to local print shops for pricing. You can also check out Internet printers like http://www.gotprint.com. 1,000 (color print) flyers at Gotprint.com will set you back around $125.00 + shipping. Try to beat that with your home computer. Paper, ink, time, and wear and tear will cost you 2 or 3 times as much. How to distribute the flyers? Start with hanging flyers on bulletin boards in supermarkets and coin laundries. Ask store owners in your area if they are willing to show the flyer in their store somewhere (if appropriate).

Do not put flyers on car windows at local groceries stores and businesses. You might violate local laws or property owner’s permissions. Rather spend a morning in large residential areas and walk from door to door and place the flyers at the front door (bring plenty of scotch tape). You can even go a step further and ring door bells and drop of flyers in person and mention that you are expanding your services to that area to see if people are interested. DO NOT put flyers into mailboxes – that is against federal law.

Have you ever seen those advertisement door hangers? Pre-printed door hangers are pretty much an extension of hanging flyers at front doors. They are already shaped with an opening for the doorknob so that they can easily be put on a doorknob when walking by. Scan the Internet for best pricing or talk to local print shops. We do not endorse a specific shop, but we have seen prices for about 5,000 door hangers for $189.00.

Business Cards: Business cards can be a very effective marketing tool. Check out different websites on the Internet. Often these websites (like Vistaprint.com or Gotprint.com) have online tools to design your business cards on their website. Always carry business cards with you and use them frequently to market your business. Keep in mind – it is a little more cumbersome reaching a large group of people with business cards compared to using flyers.

Internet: Get a good domain name and have a website build for you. More and more people search for service providers online. It starts when being in need of handymen and does not end with finding a reliable house cleaning service. A website and an email address also leave a good impression on your business cards. Statistics show that a lot of working women shop for services around their house online while at work. Purchase an online listing in your local yellow pages. The Yellow Pages are still a great way of advertising your business. The online version on the Internet is gaining more popularity compared to the print version and a listing online will help you to get more customers.

Top 10 Startup Mistakes

The following review will provide a number of examples that every entrepreneur should try to avoid when starting a venture. Some of the holes referenced below go in parallel with going out of business. With this in mind, we highly encourage you to carefully follow these guidelines. Remember, It is better to be safe than sorry. Each one of you should take your own decisions based on your due diligence, and other critical factors.

1) Having one founder. Startups should have more than one founder. The reason for this is credibility. Having at least two founders helps to diversify the work. It’s also a good thing if the founders are from different backgrounds, so that each one of them has something different to add to the mix.

Moreover, investments can be difficult to pitch with only one founder. With this in mind, potential investors might feel as though your ideas are not good enough. From a psychological stand point, when you are involved in a startup there are going to be more bad days than good days (yes we know, it is unfortunate). Having another founder that will support you through such days, and vise versa, is key. One of the best things about the early stages of a startup are the brainstorming sessions. It is impossible to describe with words the great satisfaction of coming together as a team with the perfect solution to a problem. Avoid individualism – that kind of spirit does not get you far. Team players are key, try to stay together as one and create an environment where everyone has each other’s back.

2) Wrong Location. Location is key. If you are located in the middle of nowhere it will be very hard not only to attract talent, but also the investment that will help you to build and launch your company. If you have an amazing idea and plan on executing it the best way possible, try to move to a bigger city where there is more action happening. In the beginning it will be hard to get used to a new city and to all the new changes, but you can certainly believe that in the long run it will be worth the struggle.

Some of the best cities to start a company are Silicon Valley, Boston, Seattle, Austin, Denver, and New York.

3) Doing too many things at once. One of the biggest issues that startups have is trying to do too many things at once. This creates distractions and focuses less on the tasks that need to get done. Do not try to go big right away. Make something small and make it better than anyone else. Once you have built your initial idea, then is the time to start adding new features. The easier you make it for the public, the better; otherwise they will get overwhelmed and won’t understand what you are doing.

Remember. There is nothing wrong with changing the idea that you initially started with in spite of what the market is demanding from your product. Some of the greatest projects did not turn out to be the way they were planned.

4) Hiring C- employees. On average it can take around 2 to 3 months to hire a person depending on your location. We advise you to be on the look 24/7 and never stop interviewing people. Talent is hard to find, but not impossible.

In the event you are a startup involved with the tech industry, make sure that you are hiring the best programmers. Before hiring them review projects that they have been working on, see case studies and ask for a first hand account from previous customers. This will help you in making an informed decision.

Furthermore, we recommend that you stay away from recruiters at an early stage. They do not care about your company as much as you do and the only thing they are going after is their 25% commission based on the annual salary of the potential person that you are trying to hire. This is way too much money for a startup to throw out the window. It is a pain taking care of human resources, however, someone’s gotta do it. After all, this is your company!

5) Launching too soon or too late. If a startup launches their project too soon, there could be a possibility that the product is not complete, and will not satisfy consumers. The main problem here is that if the project is not finished, it will completely turn off its users and as a consequence, people will not come back. On the other hand, you may have the problem of launching too late. This issue not only gives a bad image to the company, but since you have not been able to accomplish your milestones, it also creates a hole in the company’s pockets because keeping the lights on is not cheap.

From our point of view, launch when you have something solid. Don’t plan to launch the absolute best while waiting until such process is complete, launch with what you need and keep moving forward.

6) Raising more or less then the capital needed. Startups make this type of mistake all of the time. Make sure you have developed a detailed business plan that you are constantly updating and following carefully. This business plan should be the company’s guidelines when entering a round of financing. Keep track of your finances, and know when you are running out of money. Be sure to plan accordingly so that you can raise a little over the money that you need (in case of surprises) to carry your company until the next round of financing.

7) Lack of budgets. When startups raise money they sometimes forget that money is very easy to burn. Even though you might feel like you have everything covered, that will most likely not be the case. There are always unexpected expenses that come along the way. With this in mind, we highly encourage you to keep all the expenses as low as possible. Try to negotiate every single invoice, and extend as much as you can for the sake of your company’s cash flow. Try to operate only with the necessary number of employees. Another example of spending money could be moving into an expensive office space before the company is making any revenue. There are plenty examples of startups that blow up their bank accounts by renting very nice offices.. The moral – avoid getting an office space. Have it all start from your house if possible and only move into an office space when it is the absolute last resort.

8) Investors with lack of knowledge and expertise. Raising money is a tough battle. Dead money is the kind of investment that comes from a person who does not give an added value to the company. A good example of this would be startups who only bring in any of their friends or family members at an early stage. These kind of investors will not contribute the drive needed to have a successful startup. This can also turn off angel investors and venture capital firms that might want to jump in at a later round of financing. Another piece of advice is to not have a large number of investors at the Seed Round (first round of financing). Otherwise it will get too crazy with the legal paperwork on the next financing round, and as a consequence the attractiveness of the startup towards VC’s and Private Equities will be extremely reduced.

9) Arguments between founders. There are many examples of founders fighting, which can potentially result in losing a team member. Try to avoid fights, establish guidelines so that it never gets to a situation that it is impossible to handle. Make sure your startup has a healthy working environment. Remember, startup life is very hard to begin with, do not add additional obstacles and always try to understand each other. As explained in our article “10 Must-Know Legal Tips For Startups”, having restricted stock will prevent founders from walking out of the company with all the stock. Starting a company is not a joke, and is a long road to follow full of obstacles and darkness. Make sure you have a trusting and special connection with that person that you decide to share this journey with.

10) Lack of marketing. Your startup may have a unique product or platform, however, if no one knows about your product it’s the same as it not existing. Make sure that you get the word out and reach as many people as possible. Figure out what are the best marketing channels in order to reach the right audience. Keep in mind that print media or advertisements are less affective than online resources nowadays. In any case, as a startup your company should NOT spend too much money on advertisement.

5 Keys for Startup Investors

Hundreds of thousands of businesses are formed every year. Many of them are in significant need of capital, presenting opportunities for investors.

While startup investing is not for everyone, those with a high risk tolerance can find it a stimulating and potentially rewarding pastime. The possibility of getting in on the ground floor of the next Uber or Facebook, speculative as that might be, can be compelling.

Suppose you hear about an exciting new company looking for investors. You are aware that a majority of startups end up failing within the first few years, but you think this one could hit it big. What do you do?

1. Check out the Management

You ultimately are investing not just in a product or an idea, but in the people running the company. No matter how innovative or promising the business concept may seem, the enterprise is unlikely to succeed without capable management. You should assess not only the founders, but also those promoting the investment. An initial review often can be done online. In the case of those with professional licenses (such as brokers, accountants, and attorneys), you can check their license status and any disciplinary history. You want the people running or associated with the company to not only have clean backgrounds, but also a record of success in other ventures. Look for qualities such as experience, intelligence, creativity, integrity, discipline, and leadership ability.

2. Determine How the Business Will Make Money

Lots of companies are based on an intriguing concept. But the company must be able to translate that concept into a product or service that it can produce and sell at a profit and in sufficient quantities to generate reasonable cash flow. What is the startup’s monetization plan? What is the market demand? Who are the competitors? What is the marketing strategy? Is the business scalable, having the ability to grow rapidly without sacrificing quality or profitability? If the company is unable to provide good answers to these questions, its likelihood of success is dubious.

3. Rely on Advisors

If you are buying a used car, it is good practice to hire a mechanic to look the vehicle over to make sure you are not getting a lemon. The same principle applies in evaluating a startup. It is crucial to use qualified professionals, such as an attorney and accountant. Make sure your advisors are familiar with startups-an attorney specializing in personal injury cases probably will not be a good fit. You may also want to consult with experts in the business sector in which the startup operates. Your advisors will provide various insights you would not have on your own. They also will help you command respect from the company.

4. Thoroughly Research the Startup

Ask lots of questions and request lots of documents. If the business is concerned about revealing confidential information, it can have you sign a nondisclosure agreement. You and your advisors will want to examine the startup’s business plan, offering memorandum, financial statements, budgets, capitalization table, and corporate documents (articles, bylaws, prior investor agreements, etc.) If the documents are shoddy or incomplete, that is a bad sign. Be wary of internal financial statements; statements prepared by an outside CPA have more credibility. Audited financial statements are best, but are less common because of their expense. If your investigation raises red flags, insist on complete explanations.

5. Review the Investment Documents

Your advisors can be of great help here. At the very least, you want to be fully informed as to how the deal is being structured and what rights and obligations you and the company will have. Your attorney can advise you as to what document changes might be in your best interests and help you negotiate with the company. Your accountant can let you know whether the valuation seems reasonable. Do not proceed unless everything is fully documented. You should not invest based on a handshake or mere verbal assurances.

Startup investing requires patience and hard work. Although there are no guarantees, you can reduce the risks and boost the chances of success by following the principles discussed above.

Startup Business Plan For A Restaurant

The success of any business, start with a good and efficient plan and this is true in the case of food service trades like restaurants. Generally, Startup food business planning for a restaurant should begin with an executive summary, which will give a summary or overview of the entire business plan. This can act as a blueprint towards guiding entrepreneurs from the initial stages to the first 3-5 years of operation. This plan will document each and every detail about the operation of the restaurant.

Executive summary: When a professional Food service franchise business consultant is asked, the professional will suggest that the executive summary will identify how much financing will be needed to begin with the operations. It will also specify the funding needed until the food business begins to show up profits. Experts are of the opinion that income projections for the first three to five years should also be present in this summary. This part should also encompass a description of the proposed restaurant that identifies the unique aspects of the operation.

Concept: Professional food service franchise business consultant will also suggest that the concept, theme and the type of cuisine to be served in the restaurant and the important components that should be documented in detail in the food service startup plan. Here, the location of the restaurant should be identified.

Startup expenses: In the process of startup food business planning, it is important that appropriate plan must be documented for anticipated expenses. Generally, there will be startup costs associated with the establishment of the restaurant and it will of course include one-time expenses like purchase of furniture, commercial kitchen equipment, building alterations and initial construction. In addition, other startup expenses include glassware, table linens, theme-compatible table settings, etc… Apart from these expenses, there will be administrative costs like permission from health department, business licensing fee, etc…

Budgets: When it comes to preparing budgets, the costs for initial setup should be identified. Here, both fixed and variable expenses should be identified. Fixed expenses include those that are the same each month like lease payments. Variable expenses include regular menu items, whose cost will vary as per season.

There are professional consultants, who can help people planning to start any type of food-related trades like a food truck business. They can give the appropriate suggestion for framing a food truck business plan. They are of the opinion that the some of the above-mentioned items like budget and startup expenses should be included in the process of the food truck business plan.

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