Everyone knows that to start up a business requires start-up funding. For most businesses, the start-up amount is never a small amount. There is an initial gestation period, where the business needs to grow its client base as well as its range of products and services. That is why starting up a new business is never easy, and most people simply give up.
Today, due to the evolution of technology, it is possible to start a new business with very little initial capital outlay. The products and services are already developed, ready for you to take them up and resell. As you are reselling other people's products and services, you are also known as a reseller. But what exactly will you be selling?
There are many types of different items that you can consider selling. But one of the most popular product you can sell is domain names. A domain name is a name for a website. Everyone who wants to register a domain name needs to do so with an official registrar. The problem is, being a registrar requires a substantial amount of licensing fees. If you want to keep your risk to a minimum, you can always consider being a reseller.
Being a reseller means that you buy domain names at wholesale prices. That usually means you buy in bulk. When you do so, you get the products at a steeply discounted rate. You may then resell these products to your clients and make a profit.
To grow your Internet business further, you may start looking at any Internet related products and services to resell. Such products include web hosting, site builders, and many others. When someone takes up a domain name, it's likely that he will need hosting, web design or development services, etc. You will be doing your clients a big favor by offering comprehensive services under one roof.
There are many benefits when you become a reseller. The most obvious benefit is that you keep risks to a minimum. You don't need to spend thousands of dollars to develop your own products, only to find that you face stiff competition. You can select the products that you know your clients will need, buy them at bulk pricing, and make a good profit from there.
The other major benefit is that as a business owner, you can now focus all your time and energy on marketing your business. Spend more time contacting potential clients and partners and you will be making sales very soon. There is no need for you to worry about programming, customer support, and other aspects of the business. In other words, as a reseller, you can focus on one thing - which is to go all out and sell.
With the need for little initial capital outlay, strong products and more time for marketing, you have a much greater chance of success. Some domain resellers even provide you with a website so that you can get started immediately! Special advertising credits are also provided to give you the boost and encouragement that you need to take action.
Ultimately, this is your Internet business. How much you earn, and how far you go, depends on your hunger for success. Question is, are you ready to take on the challenge and boost your income levels to greater heights?
Borrowing from banks is every small entrepreneur's nightmare. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don't despair, however. There are several common types of alternative sources of capital for setting up a business available to young companies.
Savings and Investments
The first source you should consider is your own savings and investments. One disadvantage though of self-financing is that if things did not turn out the way you want them to be it will be your money that goes down with the ship.
Angel Investors
Angel investors are affluent individuals who provide capital for a business start-up, usually in exchange for ownership equity. These individuals are looking for a higher rate of return than would be given by more traditional investments (typically 25% or more). Angel investors are an excellent source of early stage financing and high-growth start-ups.
They are often willing to tread where there is too much risk for banks and not enough profit potential for venture capitalists. And since angel investors are often retired business owners and executives, they can also provide valuable management advice and important contacts.
Peer to Peer Lending
Peer-to-peer lending is a means by which borrowers and lenders may transact business without the traditional intermediaries, such as banks. It can also be known as social Lending, ordinary people lending money. The process may include other intermediaries who package and resell the loans--examples are Prosper.com and Zopa-but the loans are ultimately sold to individuals or pools of individuals. Prosper.com, which is available in the US only, offers business loans for small companies.
An enabling technology for peer-to-peer lending has been the internet, which connects borrowers with lenders, for example through an auction-like process in which the lender willing to provide the lowest interest rate "wins" the borrower's loan. (wikipedia.com)
Money pool
Instead of a bank loan, borrow smaller sums from several family members, friends, or colleagues. The lenders have no legal ownership in the business, but can act as advisors and cheerleaders for your venture. Remember though that nothing causes tension in a family like lending money that is never paid back.
Credit Cards
Many business owners use their credit cards to fund their businesses. Credit cards offer the ability to make purchases or obtain cash advances and pay them at a later time. But as a long-term financing method, they can be expensive. Most credit cards will charge you 2% to 4% of the face value of a cash advance as a "fee" making this method of financing very risky.
Bootstrapping
Another source of capital for setting up a business is bootstrapping. It is a way to finance a business by saving rather than borrowing money. It's being as frugal as possible so your business can be started on as little cash as possible.
The use of private credit cards is the most known form of bootstrapping, but a wide variety of methods are available for entrepreneurs. Other forms of bootstrapping include owner financing, minimization of accounts receivable, joint utilization, delaying payment, minimizing inventory and subsidy finance.
While bootstrapping involves a risk for the founders, the absence of any other stakeholder gives the founders more freedom to develop the company. Many successful companies including Dell Computers were founded this way.
Venture Capital
Venture capital is not suitable for all entrepreneurs. It is an option for small companies that have a seasoned management team and very aggressive growth plans; however, venture capitalists will rarely invest in small businesses that have no intention of going public. If a company does have the qualities venture capitalists seek such as a solid business plan, a good management team, investment and passion from the founders, a good potential to exit the investment before the end of their funding cycle, and target minimum returns in excess of 40% per year, it will find it easier to raise venture capital.
The venture capitalist objective is to invest in a company for a short period of time ? say 5 years ? and then cash out of the business while making a significant return on their investment.
Both Gen Wright & Amy Remollata are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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