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Getting Money to Grow

You may have used personal savings or money borrowed from friends and family to get started, but where do you go when it's time to grow your business? If you've been in business for less than three years or have nothing to offer as collateral, you might find traditional lending institutions unwilling to finance your business. There are options, though--if you know where to look.

Going back to those same friends and family--but making it a formal loan with a set repayment plan and interest--might be a viable option, if you haven't already gone this route. For instance, an institution like CircleLending--which administers loans between individuals by handling and storing all the documentation, creating a repayment schedule, taking care of payments through debits and direct deposits, and even handling collections if the loans go into default--can make things easier for both you and your loved ones.

"There's this huge volume of loans between individuals in this country, and there really is no third party to reduce the high rates of default which typically occur in these loans," says Asheesh Advani, president and CEO of CircleLending, based in Cambridge, Massachusetts. According to Advani, $65 billion a year is transacted between family and friends in the form of loans. In addition, 14 percent of the total amount of money raised by businesses comes from friends and family.

While borrowing from friends and family may be an alternative, however, what if your need exceeds what you can borrow from them? When Paul Entin founded his previous business, Fitnesslink.com, the company grew rapidly, and he knew he needed to seek outside funding to bolster the technology he was using to run the site. Unwilling to give up control of his company to a venture capitalist--he'd been approached several times--he instead got a microloan from an SBA-backed lender. The infusion of funds allowed Entin to beef up the technology in his business, which he subsequently sold.

So when it came time to find funding for his current business--epr, a Washington, New Jersey, marketing and advertising firm specializing in industrial clients--he knew exactly where to look. "We had talked to our bank and investigated other ways, like home equity loans, but this seemed like the most effective way to go. It was a fair interest rate, plus they were able to give us the loan without having a [drawn-out] process upfront," says Entin, who invested the $27,000 from his second loan into office equipment and materials.

And although Entin doesn't plan on adding employees--he outsources a lot of graphic design to a network of freelance professionals--or moving out of his home office anytime soon, any future expansions in the business will likely be funded by microloans.

If you lack funds on a short-term basis, think about creative forms of financing, such as pre-selling. "We teach [our students] to use a customer as the basis of funding," notes Professor Ken Proudfoot, director of the Larry Friedman International Center for Entrepreneurship at Johnson & Wales University in Providence, Rhode Island. "And the way that works is by pre-selling the product or service--taking a deposit for the delivery of the product or service in advance of actually delivering it," says Proudfoot. You can then use the deposit to purchase the materials you may need to deliver the product at a later date.

Another method of obtaining financing for supplies or materials is to approach vendors of those products about opening a line of credit with them. With flexible terms of payment, you can stock your inventory or buy raw materials for your product without having to put the cash upfront.

Now before you go out and borrow from anyone, make sure you have a bona fide need. Money won't solve problems in your business, warns Proudfoot, and you shouldn't expand your capacity without first ensuring you have the customer base to justify the expansion.

New Promotional Ideas That Work - Without Competition!
By Paulina Roe
Posted Monday, October 25, 2004

Find a "silent auction" or raffle going on, and contribute a product or service of yours. You will be listed as a contributor, "Donated by Joe's Company", and then it will have your contact information. If the prize is truly worthwhile, people will want to know how to get more of it. You will have left people a good feeling about you for having contributed, and their trust factor and confidence in you will climb. They will refer your company to others and you should see an increase in business (but you must provide a product or service that people want and appreciate -
something of value).

Try to have your logo or slogan included with your contact information - so people will get a feel for any other line of related products or services you provide. Don't list anything unrelated - it will ruin your credibility. It would be advantageous to include a "coupon" for 10% or some amount for people to get a deal from you. See if you can leave business cards with the donation for people to pick up, or if you can have your discount printed up in the "credits" that list the donators.

To find groups in need of donated products and services, tell other people as you run into them that you have items to donate - many will be associated with a church, or scout troop, or sports team, or school fundraiser group, etc. Make some calls to local churches, asking if they are looking for any raffle or silent auction items. You might even spark up a fundraising drive with your suggestion. Call scout troops, schools, sport teams - all are looking for ways to raise money. Many are at a loss to think of what - you can provide them an avenue.

We have a fundraising website at (http://doubleii.com/fundraising.html) - contact me and I can add your donation request to the site and perhaps provide an avenue for a fundraiser to find you. This would be a benefit to your paid subscription to this newsletter.

This tactic does work - if people like your offering. I have used it at church silent auctions, and at swim team fundraisers. The woman with a store next to me has donated items to sporting events. It does bring in more awareness of your business, and should increase your sales. Make sure to include your business and contact information so that you will be recognized.

More "Slick Tricks" can be found in the "Slick Tricks" weekly newsletter - new and cutting edge tactics in promoting, which will keep you ahead of your competition. P. Roe has been writing on the Internet for the past 5 years - always bringing new information to both newbies and the experienced. (http://doubleii.com/slicktricks.htm)

How to Give Appropriate Business Gifts

Most of the time when you give a business gift, your intention is to thank or congratulate someone or to encourage business. The last thing you want to do is give a gift that might offend the recipient, so follow this advice to choose an appropriate present.



Steps:
1. Check to make sure your intended recipient's company does not have a no-gift policy or a limit on the dollar value of gifts that its employees may accept. The company receptionist or personnel department can usually tell you this, sparing you an awkward conversation with the recipient.

2. Consider how the gift will be received, what it will say about your company, if it's actually a benefit to the recipient, and how likely it is that the gift will remind the recipient of you and your company.

3. Know your recipient so that you can purchase a meaningful gift. Make mental notes when someone tells you about their recent dieting efforts, comments on their favorite flower or expresses a penchant for pistachios.

4. Choose top-quality, brand-name products when purchasing business gifts. Cheaper, lesser-quality products may send a negative message to your recipient about how much value you place on the relationship.

5. Give appropriate business gifts at the appropriate times, usually as soon after the event as possible. If you send a box of chocolates before your client signs the contract, not only do you run the risk of offending someone on a diet, but your gift could be seen as a form of bribery.

6. Write a short note to accompany your gift for an extra personal touch.

7. Make the effort to deliver the gift in person, if possible. This extra effort will help add further emphasis to the thoughtfulness of your gesture.


Tips:
Stick with items that aren't too personal. Travel accessories, personalized desk accessories, entertainment tickets, computer accessories, books and CDs are usually safe bets, provided you know something about your intended recipient's habits in these areas.

Keep a close eye on the price tag. Gifts that are too expensive may make the recipient uncomfortable or uncertain about the intentions behind the gift.

Pay special attention to the presentation, wrapping or packaging of your gift. First impressions are hard to change.

Try sending gifts at times other than major holidays. These occasions could include a promotion, a new baby, a birthday, a new business referral or a get-well wish.


Warnings:
Avoid giving personal gifts (this is usually considered to be a product or service that involves touching the skin), joke gifts, alcohol, tobacco products, products promoting your company, money, jewelry, expensive electronics and religious gifts.

Remember where the road paved with good intentions leads. Gym passes, health club memberships or exercise equipment could offend an overweight person, even if they have expressly told you they want to lose weight or that they are on a diet.

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Gift-giving Advice for Small Business People
by Mark Cox

When the holidays come around, for some people, choosing the right gift for colleagues, the boss or their customers can be as difficult as winning over a new client. To help navigate the tricky "do's and don'ts" of workplace gift giving, big box office products retailer Office Depot, is offering an etiquette expert's guidance to its small business customers.
A recent survey conducted by Harris Interactive on behalf of Office Depot found that the majority of people are unsure of holiday gift-giving etiquette at the office. The survey revealed that while 78 per cent of workers plan on either giving gifts or celebrating the holidays at their workplace, 90 per cent are unfamiliar with the proper gift-giving protocol for business associates and clients.

To assist customers in understanding the unwritten rules governing the workplace this season, Office Depot has hired Etiquette Expert Hilka Klinkenberg to provide insight on the workplace gift exchange.

"Simple points that are easy to remember can help reduce the uncertainty surrounding workplace gift giving," Klinkenberg added. "Giving an appropriate gift helps solidify relationships for the rest of the year and the future."

According to Klinkenberg, there are eight key tips that customers should keep in mind while shopping for business-appropriate gifts this holiday season:

Tip #1: Know your recipient. Whether the gift is for a client, boss or assistant, be aware of the person's style and consider your recipient's interests. For example, if he or she travels frequently for work a Business Tote or Notebook Backpack are great options. The stylish co-worker will surely appreciate something like a Safari Stapler Gift Set, to add a touch of pizzazz to an otherwise bland workspace.

Tip #2: Think about giving a gift that someone wouldn't buy for themselves. Without being extravagant or expensive, a "splurge" item could help your business associate relieve some holiday and office stress. For example, an Illuminating Mood Candle adds some soothing ambience to the office while a MediaPlay Cordless Mouse is great for work and entertainment.

Tip #3: Remember your budget and remain consistent. A budget will often be the determining factor when making business gift purchases this holiday season. The key is to create a list, set a spending limit and stick to it. Try to spend the same amount on an individual from year to year. If you spent $100 last year, a $20 gift might send the wrong message.

Tip #4: Give the gift in person. Personal gift exchange is always more meaningful. However, never ask someone to open a present in front of you; it could easily create an embarrassing or disappointing situation. If it is not possible to give a gift in person, plan to ship the gift by Thanksgiving since many business associates travel and take vacation toward the end of the year.

Tip #5: Presentation Counts. Pay attention to your gift-wrapping. Take a moment to personalize your gift by using appropriate paper and packaging; be sure to consider the recipient's corporate culture and ethnic background. Do include a hand-written card.

Tip #6: Give a gift that is both thoughtful and useful. Simplifying a busy person's life or updating an outdated co-worker with the latest technology will ensure that your gift makes a lasting impression. Presenting someone with a needed gift shows that you're paying attention. For example, a Digital Voice Recorder is perfect for the colleague who is always on-the-go and needs a convenient "audio to-do list." For the co-worker who is curious about technology, a Web Camera or Slim Audio Player could be appropriate.

Tip #7: Avoid personal gifts. According to the Office Depot survey, 57% of respondents who planned to give holiday gifts to business associates will give personal gifts, but only 15% would like to receive a personal gift from their co-worker. What is considered too personal? A good guideline is to steer clear of anything that touches the skin...lingerie, fragrances, jewelry, clothing, and anything that requires size, style or color.

Tip #8: Match the gift with your company's image. Building a corporate image is something companies work hard to achieve all year. Don't ruin it with a holiday gift that doesn't reflect the company's personality. For example, if your company describes itself as edgy and creative then your client gift should reflect this, and classic but more conventional gifts like a Notebook Leather Case or Pen and Pencil Set would be less appropriate.