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Top 10 Ways To Fund Your Start-up Business

Top 10 Ways To Fund Your Start-up Business

It’s been said that it takes money to make money. The aspiring entrepreneur is often pressed to find more funds. Where can you find them? Here are some creative ways to finance start-up businesses.

1. Founder’s capital

Prepare for your start-up business by saving. It will take much more money than you planned. Consider inviting a wealthy and trustworthy friend or relative to be a co-founder and perhaps silent partner. Other people and firms who might consider investing want to see that the founders are truly committed to the venture with their own funds.

2. Friends and family

These people believe in you and your ideas. They want you to succeed. They are mostly interested in the founders and if the concept sounds interesting. Many of them say, “If you, the founders, are committed to this, I know it will go far. Count me in.” Usually, they do not conduct complete evaluations of things such as reputation, revenue, or accident insurance coverage for employees, but rather invest based on faith. Their knowledge of the founders is the key factor that helps them get the risk to a manageable level.

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Most of these supporters come in prepared to lose their investments in order to support the founders in fulfilling their dreams. Consider selling unregistered securities through a private placement offering (PPO) to friends and family who qualify as accredited and sophisticated investors. Engage security attorneys to ensure compliance with the Security and Exchange Commission (SEC) and state “Blue Sky” requirements.

3. Barter

What services or products do you have or will you have that one of your service providers wants? Rather than pay cash, barter. Explore how you can exchange products or services instead.

4. Stock options

Talented people can often be enticed to work for equity as a form of compensation. Rather than fork out the firm’s limited cash, explore setting up a stock option for employees as well as consultants and service providers.

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5. Government grants

Government funding — at the national, state, and local levels — can support development of new technology at research institutions and support entrepreneurial activity. The technology from research organizations can ultimately be transferred to start-up businesses.

Explore what government sources are available for your venture. For example, apply for SBIR (Small Business Innovation Research) grants administered through the various US government agencies. If you are a foreigner to the country, make sure you know the additional requirements. The Citizenship Bureau gives you a better idea about the importance of Country of Tax Residence and Residential Status, should you start a business outside your country of origin.

6. Corporate fees and grants

Engineering charges for consulting and customized development may be available from commercial accounts interested in applying your technology to their pressing concerns. These corporations get an early look at the product offering and have the ability to greatly influence its direction. Additionally, these firms may evolve into long-term strategic partners.

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7. Revenue from product licensing and sales

Once you have a product available, revenue from its licensing and sales activity can help bootstrap the firm. Choose projects that will generate cash to fund your ongoing operations.

8. Debt financing

Some firms find debt financing through banks and other financial institutions and investors. The funds must be repaid plus interest. For example, the Small Business Administration has a business loan program that works in conjunction with banks. However, the majority of these lenders consider your credit score status as an important factor to determining your trustworthiness.

9. Angel investors

Angel investor networks have formed throughout the country. These high-net-worth individuals are sophisticated investors interested in early-stage private equity investment in emerging firms with great potential. They may also want a management or board position in your firm as part of the deal.

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10. Venture capitalists

After considerable due diligence, these firms make private equity investments in promising early-stage companies. A venture capitalist’s primary goal is to maximize financial return while getting the risk to a manageable level. In exchanging their money for an ownership stake in the company, venture capitalists also bring business acumen, contacts, and seasoned board experience to the firms in which they invest.

Featured photo credit: Ideator Team via ideator.com

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Junie Rutkevich

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Published on November 8, 2018

How to Answer the Tough Question: What are Your Salary Requirements?

How to Answer the Tough Question: What are Your Salary Requirements?

After a few months of hard work and dozens of phone calls later, you finally land a job opportunity.

But then, you’re asked about your salary requirements and your mind goes blank. So, you offer a lower salary believing this will increase your odds at getting hired.

Unfortunately, this is the wrong approach.

Your salary requirements can make or break your odds at getting hired. But only if you’re not prepared.

Ask for a salary too high with no room for negotiation and your potential employer will not be able to afford you. Aim too low and employers will perceive as you offering low value. The trick is to aim as high as possible while keeping both parties feel happy.

Of course, you can’t command a high price without bringing value.

The good news is that learning how to be a high-value employee is possible. You have to work on the right tasks to grow in the right areas. Here are a few tactics to negotiate your salary requirements with confidence.

1. Hack time to accomplish more than most

Do you want to get paid well for your hard work? Of course you do. I hate to break it to you, but so do most people.

With so much competition, this won’t be an easy task to achieve. That’s why you need to become a pro at time management.

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Do you know how much free time you have? Not the free time during your lunch break or after you’ve finished working at your day job. Rather, the free time when you’re looking at your phone or watching your favorite TV show.

Data from 2017 shows that Americans spend roughly 3 hours watching TV. This is time poorly spent if you’re not happy with your current lifestyle. Instead, focus on working on your goals whenever you have free time.

For example, if your commute to/from work is 1 hour, listen to an educational Podcast. If your lunch break is 30 minutes, read for 10 to 15 minutes. And if you have a busy life with only 30–60 minutes to spare after work, use this time to work on your personal goals.

Create a morning routine that will set you up for success every day. Start waking up 1 to 2 hours earlier to have more time to work on your most important tasks. Use tools like ATracker to break down which activities you’re spending the most time in.

It won’t be easy to analyze your entire day, so set boundaries. For example, if you have 4 hours of free time each day, spend at least 2 of these hours working on important tasks.

2. Set your own boundaries

Having a successful career isn’t always about the money. According to Gallup, about 70% of employees aren’t satisfied with their current jobs.[1]

Earning more money isn’t a bad thing, but choosing a higher salary over the traits that are the most important to you is. For example, if you enjoy spending time with your family, reject job offers requiring a lot of travel.

Here are some important traits to consider:

  • Work and life balance – The last thing you’d want is a job that forces you to work 60+ hours each week. Unless this is the type of environment you’d want. Understand how your potential employer emphasizes work/life balance.
  • Self-development opportunities – Having the option to grow within your company is important. Once you learn how to do your tasks well, you’ll start becoming less engaged. Choose a company that encourages employee growth.
  • Company culture – The stereotypical cubicle job where one feels miserable doesn’t have to be your fate. Not all companies are equal in culture. Take, for example, Google, who invests heavily in keeping their employees happy.[2]

These are some of the most important traits to look for in a company, but there are others. Make it your mission to rank which traits are important to you. This way you’ll stop applying to the wrong companies and stay focused on what matters to you more.

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3. Continuously invest in yourself

Investing in yourself is the best investment you can make. Cliche I know, but true nonetheless.

You’ll grow as a person and gain confidence with the value you’ll be able to bring to others. Investing in yourself doesn’t have to be expensive. For example, you can read books to expand your knowledge in different fields.

Don’t get stuck into the habit of reading without a purpose. Instead, choose books that will help you expand in a field you’re looking to grow. At the same time, don’t limit yourself to reading books in one subject–create a healthy balance.

Podcasts are also a great medium to learn new subjects from experts in different fields. The best part is they’re free and you can consume them on your commute to/from work.

Paid education makes sense if you have little to no debt. If you decide to go back to school, be sure to apply for scholarships and grants to have the least amount of debt. Regardless of which route you take to make it a habit to grow every day.

It won’t be easy, but this will work to your advantage. Most people won’t spend most of their free time investing in themselves. This will allow you to grow faster than most, and stand out from your competition.

4. Document the value you bring

Resumes are a common way companies filter employees through the hiring process. Here’s the big secret: It’s not the only way you can showcase your skills.

To request for a higher salary than most, you have to do what most are unwilling to do. Since you’re already investing in yourself, make it a habit to showcase your skills online.

A great way to do this is to create your own website. Pick your first and last name as your domain name. If this domain is already taken, get creative and choose one that makes sense.

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Here are some ideas:

  • joesmith.com
  • joeasmith.com
  • joesmithprojects.com

Nowadays, building a website is easy. Once you have your website setup, begin producing content. For example, if you a developer you can post the applications you’re building.

During your interviews, you’ll have an online reference to showcase your accomplishments. You can use your accomplishments to justify your salary requirements. Since most people don’t do this, you’ll have a higher chance of employers accepting your offer

5. Hide your salary requirements

Avoid giving you salary requirements early in the interview process.

But if you get asked early, deflect this question in a non-defensive manner. Explain to the employer that you’d like to understand your role better first. They’ll most likely agree with you; but if they don’t, give them a range.

The truth is great employers are more concerned about your skills and the value you bring to the company. They understand that a great employee is an investment, able to earn them more than their salary.

Remember that a job interview isn’t only for the employer, it’s also for you. If the employer is more interested in your salary requirements, this may not be a good sign. Use this question to gauge if the company you’re interviewing is worth working for.

6. Do just enough research

Research average salary compensation in your industry, then wing it.

Use tools like Glassdoor to research the average salary compensation for your industry. Then leverage LinkedIn’s company data that’s provided with its Pro membership. You can view a company’s employee growth and the total number of job openings.

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Use this information to make informed decisions when deciding on your salary requirements. But don’t limit yourself to the average salary range. Companies will usually pay you more for the value you have.

Big companies will often pay more than smaller ones.[3] Whatever your desired salary amount is, always ask for a higher amount. Employers will often reject your initial offer. In fact, offer a salary range that’ll give you and your employer enough room to negotiate.

7. Get compensated by your value

Asking for the salary you deserve is an art. On one end, you have to constantly invest in yourself to offer massive value. But this isn’t enough. You also have to become a great negotiator.

Imagine requesting a high salary and because you bring a lot of value, employers are willing to pay you this. Wouldn’t this be amazing?

Most settle for average because they’re not confident with what they have to offer. Most don’t invest in themselves because they’re not dedicated enough. But not you.

You know you deserve to get paid well, and you’re willing to put in the work. Yet, you won’t sacrifice your most important values over a higher salary.

The bottom line

You’ve got what it takes to succeed in your career. Invest in yourself, learn how to negotiate, and do research. The next time you’re asked about your salary requirements, you won’t fumble.

You’ll showcase your skills with confidence and get the salary you deserve. What’s holding you back now?

Featured photo credit: LinkedIn Sales Navigator via unsplash.com

Reference

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