Economical Start Ups – Avoid using up all resources

Cheap-to-run businesses are just the thing you need in present situation, and there are plenty of them, for example consulting business, online businesses (e.g. drop shipping), real estate brokerage, and the like. Some of these economical businesses initially need a huge capital to start with, and every so often people get carried away by the excitement and spend on things that are not really necessary in the start, it makes business startups a risky endeavor. Overspending at any stage of the business is obviously a bad practice, but being wasteful when you have just started, is asking for trouble. In case the business fails, it'll be so much more difficult to recover from that failure. Huge spending in the start will make you impatient and even the small setbacks will felt like a blow.

Start small and grow rather than starting big and diminishing:

Some startups, while trying to devastate their competition, spend too much on marketing and other stuff, which overburdens their finances. As a result, the first business that gets hurt by this excessive spending is ironically their own. Rule of the thumb for most businesses is to start everything on trial bases, instead of jumping in the market with high hopes and putting everything on stake.

Plan & Research:

Make a list of all requisites and expenditures that you may need in the start and then try to avail most of the low-cost alternatives available. For example, when you are looking for office furniture, you can save plenty by getting some second-hand office chairs and tables (in good condition), as the brand new furniture hardly plays any role in the final decision of a customers who pays a visit to your office. Similarly, don’t indulge in extensive borrowing from banks or other resources; do not unleash some lavish advertising campaign as well.

Niche Segment:

You cannot capture the whole market all at once; you have to start by small segments. Big ambitions are fine but make realistic targets and go step by step. Niche is the keyword for any small business, even more so when you are just starting. Targeting a specific set of customers allows you to save on research, marketing, production and distribution. Also, starting by focusing on a small niche won’t put other relatively large businesses on the alert, saving you from some serious blocking up tactics that these business can employ to choke your business in the start.

Source:
Wholesale Trade Suppliers, Dropshippers, Distributors & Manufacturers

Different types of discounts you can offer to your customers

What are the two most attractive words, you can use in your advertisement to lure customers? Answer is Discount and Free, and although “Free” can pull much larger crowds as compared to “Discount”, you can’t really offer your products for free. Therefore, discount is a more practical, sensible and smart option to use. Different types of discounts and sales are very effective to curb the competition. It can also provide a good boost to your sales in the time of recession, when people are looking to save on every deal. However, offering discount on your products will obviously reduce the inflow of cash, therefore you need to chew over your discount strategy over and over, keeping in mind all costs and expenditures. In addition to this, there are some laws in developed countries that impose some restrictions on discounts; you need to confirm to these regulations as well.

Here are some of the discounts you can offer to your customers.

Quantity Based Discount:
You must have noticed a huge difference between wholesale and retail price. Whenever you buy something in large quantities you expect some discount from the seller. People are more than happy to offer low prices to a buyer who will purchase in large quantities because it allows the seller to save in many ways. But normally these quantities are too large for a normal consumer and only businesses can afford to purchase a product in these quantities, however you can offer some sort of off-price if the customer buy more than one units, for example 5% off if someone purchases 10 units or more.

Payment Based Discount:
If majority of your customers make purchase on credit then you can offer payment based discounts to these customers, tempting them to pay as soon as possible by offering a small discount on paying cash without delay. Prompt payments will save you all those collection costs and help you with daily expenditures of the business, as well.

Trade Discounts:
These are the discounts you have to offer to the middleman, be it the wholesaler, retailer or distributor, so that they can cover all costs of marketing that may be needed before the product reaches to the ultimate consumer. Trade discounts are in fact, the biggest of all.

Special Discount:
In some cases you can offer discounts to some specific group of customers to capture that special segment of the market. This niche group can be of students, house wives, doctors, your previous customers, small business owners or any other strategically targeted group.

Source:
Wholesale

Different approaches for investment in Private Equity

Private equity is the capital of a company that is not for sale for general public at stock exchange. Equity securities are privately owned by the owner(S) of the company and they are not publicly traded. Investment in Private equity often involves huge amounts, which is why normally investment organizations like investment banks or mutual funds carry out these investments as an entity. Private equity investors often acquire a company, even if they don’t get the complete ownership of the company, they still hold enough shares to be actively involved in the management and company decisions. That’s the key thing about holding private equity, that you can be instrumental in the company decisions.

Leveraged Buyouts:
The most common investment made in private equity is a leveraged buyout, in which the investor acquires considerably large number of shares in some company, with an amount that is mostly borrowed from small investors. The investor in this case can be some private equity firm or even the manager of the company (who will purchase private equity to have power over the business that he/she has been managing so Far. It is also known as management buyouts. A rarity in the past, leveraged buyouts occurs quite often now days, as more and more institutional investors raise funds to purchase the majority of shares in some operating business. These investing companies then take drastic steps to improve the performance of the business after acquiring control over the business, however leveraged buyouts are not always successful and collapse as often as other businesses.

Distressed Securities:
Any kind of investment in a bankrupt company (or a company that is about to go bankrupt) is called distressed investment (so it’s not the investor who is making some distressed investment decision). These securities are often valued at a lower price than the original value. By nature, it is a risky investment; therefore it has to be handled by experienced investors and not the starters.

Investing as Venture Capital:
Venture Capitals are raised to support big business start ups, Venture Capital is a pool of cash that goes around looking for entrepreneurs with sound business ideas. Entrepreneurs have to rely on Venture Capital when the required amount for start up is too large to be raised by any other mean. Though it means less control for entrepreneurs, still it helps them getting started and executing the idea that has been haunting them for some time.

Source:
Wholesalers

Commonly used types of branding

Having a large pool of brand loyal customers is probably the best asset a business can have in the long run, it is always easier to hold on to an old customer when compared to the efforts it take in acquiring a new one. Building a brand is like building your stronghold in the market, it’s like a castle that will protect your business from the competition; however you need to keep building up and keep strengthening incessantly, in order to stay safe. Branding is not simply choosing a catchy title and spending hefty amounts to have it appear everywhere. Branding is the name of a thoroughly planned marketing strategy, where you choose your strongest point and foster your marketing plan around your strongest features, while adding new features with the passage of time.

Branding focused on company name:

Majority of the brands are based on company names. In this technique the business starts from thinking of a name which is unique, easy to remember and likeable, all at the same time. Once you’ve your company name established as a popular brand, the whole range of the products attached with this brand will get an upper hand in the market. Sometimes, the association of your brand name is enough for a soon-to-be launched product to hit it off with the brand loyal customers. Coca Cola, Microsoft, Nokia, Nestle, Pizza Hut, these are all examples of some enormously popular brand names. A company can focus on just one Brand for entire product range or choose a separate brand name for each of its products.

Iconic Branding - The untouchable:

Some businesses grabbed the idea of Branding and took it to a whole new level, becoming monstrously huge and almost unbeatable in their respective fields. In some cases it was the product alone, which took them to these heights (e.g. Google); in other instances there were some great marketing tactics involved (e.g. Nike). Some of them gain such popularity that they’ve started to represent the product itself, for example Google is now widely used as a term, standing for online search.

Mood Branding:

In a relatively new branding technique, businesses have started to attach a general feeling or attitude with the usage of some particular product. Companies make inspirational taglines to appear with the product. For example “Think different” by Apple or the famous “Do It” by Nike. These slogans are used extensively in the ads, so much so that the name of the product alone can ignite some specific feeling in consumer's mind.

Source:
Wholesale

Writing a business proposal that works

Business proposals are important even if you are the only business vying for the customer, and their importance increases twice as much when you are dealing with tough competition. What’s more? An outstanding and exceptionally written business proposal will go as far as closing the deal for you. Do you need anymore reasons to carry on reading?

Up till now, you must be having an idea of the purposes or objectives of a business proposal. In simple words, business proposal is a message in written form (containing announcement, special offers, product details or directions to make a purchase, etc) that is intended to convince some potential customer to buy from you. You ought to spend more time and effort on business proposal than any other promotional material because in most cases business proposal will make or break the deal for you.

Requisites of a Business Proposal:
Business proposals are often sent out following the request coming from an interested party; try to focus your business proposal on the information that the client has asked for. An ideal business proposal is supposed to endow your customer with the specific information that he/she has requested, effectively matching the customer requirements with your products or services. Business proposal can have any or all of the information regarding your products, price quotes, past experience, salient features, legalities, testimonials, etc.

Know the Nature of your business proposal:
Before you sit down and try to come up with a business proposal, you must be having an exact idea of how much information your customer wants? Unnecessarily stuffing the document with everything related to your business e.g. business history, product details, prices, terms and conditions, etc will irritate the customer, as he/she’ll have to undergo quite a number of pages, just to locate the information he/she has requested for.

Writing a Successful Business proposal:
As a copywriter, business proposal is one of those marketing copies, where you have got to give your best shot, because you need a very balanced approach when preparing business proposal. For example, you must make your point that you are the best in the business but at the same time, you are obliged to avoid artificial amplifications. Steer clear of spelling mistakes at any cost, business proposal is the reflection of your commitment towards your business and a spelling mistake will reduce your image to rubles. Throw some incontestable reasons to buy your product, highlight the benefits but don't narrate false stories. In the end of the document, provide the customer with all necessary steps and procedures, in case he/she decides to buy after going through your business proposal.

Source:
Wholesale Suppliers

Winning combination of internet and B2B marketing

Though business to business transactions have been there for ages, B2B marketing is a relatively new phenomenon (or perhaps marketing was not classified into separate categories like B2C, B2B, and B2G back then). Ever since the categorization, business marketing has surpassed the traditional "consumer marketing" by all measures, that too in this short time period. Business marketing is now established as a much bigger and more profitable venture, particularly in the developed countries. Basic difference between these two, as evident by the names is that in B2C marketing we target individual consumers, while in B2B marketing our aim is to engage businesses, organizations and large corporations. Business marketing is undoubtedly a tough job, but far more profitable without any doubt. Mainly, for following reasons …

• The profit margin is much larger than consumer marketing
• You don't have to cope with the cut-throat competition that exists in consumer marketing
• Business marketing is not unpredictable and complicated when compared to consumer marketing
• Once secured, the customer (i.e. a business) stays with you for a much longer period
• Customer acquisition cost is lower when weighed against the income that generates as a result

Internet and B2B Marketing:
From positioning to promotion, and sales to customer support service, Internet has revolutionized the B2B marketing, B2B marketing and Internet make an excellent duo that is cost-effective, far reaching and equally promising. Ignoring internet as a marketing medium altogether, can prove to be a suicidal decision if you are running a B2B business.

Low cost:
If you are looking to cut down costs for research studies, promotional campaigns, lead generation or even branding, internet is the most economical medium to carry out all these tasks, and the fact that most of online marketing techniques may draw in only the targeted customers, makes it even more worthwhile.

Cementing your relations with the customers:
Social media networks e.g. Facebook or LinkedIn enables your customers to interact and get the answers to their queries (regarding your business or products) in no time. Corporate Blog is an excellent way to establish yourself as an experienced professional; you can elaborate your business mission, share your knowledge of the industry, and get immediate feedback. Similarly, you can provide your customers with an expeditious customer support service at absolutely no cost involved.

Online B2B marketing platforms:
Luckily, internet offers various types of B2B marketing platforms and business networks, which mean you've got a pool of interested buyers readily available. These networks (e.g. dailytrader.com) can take the fuss out of B2B marketing and give an instant boost to your sales.

Source:
Wholesale

Which business structure is best for your small business?

There are basically three types of business structures (or forms of ownerships) to start with, and if you are looking to commence a business, you need to study all of them in detail as they are not just different methods to manage a business. Business structure actually plays an important role in many ways. For example, cost of starting and then maintaining a business varies with different structures; then you have this very important objective of minimizing tax payable, another decisive perspective can be the liability factor. You can change the structure in future (e.g. getting into a partnership from operating as a sole proprietor) but it's better to start from the right one, instead of going through the change process later on.

Sole Proprietorship:
The most basic form of small business, where one man starts, manages and owns a business. There's no or minimum start up costs involved, you are the sole possessor of your business and all its assets. However, this sole ownership comes with unlimited liability, which means even your personal assets are at risk in case something goes wrong and a suit is filed against your business. As a sole proprietor, you are responsible to pay income tax on your profits. Apart from the unlimited liability part, sole proprietorship is the most convenient way to start a small business, for example consultancy services, real estate agent, retail store, etc.

Partnership or Joint Venture:
Another very simple form of business structure is known as partnership; in which two or more persons join hands to establish and manage the business. Profit, loss and liabilities are equally divided between all partners (or as per the agreement). Taxation liabilities are same as sole proprietorship, as partners are required to pay taxes on their share of profits, in individual capacity. Just like sole proprietorship, your personal assets are not protected as each partner carries unlimited liability (unless some of them are mentioned as limited partners in the agreement). Partnership can also result in some disputes or personality clashes if all members are fixed at running the business in their own way. Partnership helps two or more people to combine their finances and expertise to form a more competitive business when compared to sole proprietorship.

Limited Liability Company:
Limited Liability Company has characteristics of multiple business structures; it offers tax advantage similar to partnership, while precluding the unlimited liability. Limited Liability Company functions like corporations except that they are not required to offer company shares in stock exchange. Even though the cost of maintenance or establishing a Limited Liability Company is higher than partnerships or sole proprietorships, many smart entrepreneurs still prefer this business structure just because of limited liability clause.

Source:
Wholesale

Valuing a business before investing into it

Business valuation is the assessment of economic value (Fair market value) for that business. You may need business valuation for a number of purposes, for example when you are looking to invest in some business, or planning to buy/sell some enterprise. Business valuation is not only handy when investing into some business, it also helps in taking better decisions when you are getting into partnership with someone or seeking loans for your business. Valuation is normally carried by professional appraisers, first because it is a complex task and needs professionals to do it; second an outside party will provide a more objective and neutral report. However, a better understanding of what contributes into the valuation of businesses will help you to progress into the right direction.

Just like any other financial report, the appraiser or valuator needs to disclose what approach has been applied for business valuation as all approaches have different pros and cons. Three approaches mostly used for business valuation are

i) Asset based approach
ii) Income based approach
iii) Market approach

Sometimes a combination of all of these approaches is used.

Asset Based Calculation:
Anything of economic value, that a business own is called an asset. As the name suggests, in asset based approach a business worth is calculated as the sum of its assets (both tangible and intangible) minus the total amount of its liabilities. These figures are picked from balance sheet. In liquidity based approach, assets are valued by the net amount they can generate in case their owner decides to sell them in the market.

Income (or earning) Based Approach:
Several methods are used in Income based approach, but the most appropriate method is "discounted cash flows". Unlike asset based approach where business is valued by the value of assets, this approach focuses on the future earning potentials. The drawback of this approach is that it depends mostly on the projected cash flows and expected returns, which are not guaranteed to be correct.

Market Value based Approach:
Market value based approach seeks to determine the business value by comparing it to some recent sales of similar type of businesses. There are no real calculations involved and this is merely an estimated value, which relies on the simple demand and supply rule for the markets.

Most experts recommend a combination of these approaches for a more realistic result. There's no single approach that will suit all types of businesses; stakeholders can choose an approach of their liking or leave it to the professional valuator to decide the most suitable one.

Source:
Wholesale