Who are the crowdfunders?

There has been a lot of talk in the media about crowdfunding and how it helps to raise business finance.  It is a way of generating money for a cause, business or social project.  There are crowd funding websites that you can visit which list all of the people who are asking for your support (aka money) to help them either get their start-up business off the ground or get their art seen or their music heard or their film made or their research funding or anything else you can think of.

The people who are requesting this money normally are not giving anything back to the investor in return.  Maybe a coffee mug of a notice of donation on their website, but nothing of true monetary value.  So why do they expect people to donate money to them?  Well it all comes down to human natures.  People innately have the desire to help each other. 

But this desire is not without reservations.  They must trust the person they are helping.  They have to believe not only in their cause but in their sincerity to working that cause.  If the person comes across as insincere or phony or a scam artist just out to take their money then they will avoid that person like the plaque.  So what are crowdfunders looking for and what makes them reach into their pockets and donate for no benefit to them except getting that “feel good” moment that they are helping to make a difference in the world.

Normally these are people with at least a small amount of disposable income.  Obviously you are not going to get people living on welfare or social subsidies to donate to these causes.  They may be the beneficiaries of some of these programs!  You are looking to reach an older demographic.  People who have made their money in life and are now looking back and saying “How can I take the money I made and make a real difference in someone's life with it.”  They want to feel good about themselves and also support a cause that is important to them.

Maybe they lost a loved one to a rarely known but debilitating disease.  They are personally connected to this cause.  They do not want to see others go through the pain and suffering that they did. So they look online for places they can donate to help cure this disease.  Normally they would just search for a website about the disease.  But that may only have information on the disease and be an educational site, not a fund raising site.  However now with crowd funding, even these educational sites can put a widget (link) on their site to a crowd funding site that does have a place where these people looking to donate can go.

By utilizing the inter connectivity of the web, people who are looking to support a cause that is close to their heart can, without realizing they are doing it, become crowdfunders.  They visit these websites and watch the presentations on them.  They think about the loss they have suffered in their own lives because of this illness or disease and they want to help.  They make as small or as large a donation as they feel comfortable with and become crowdfunders, adding to the pool of wealth that is being used to fight this disease.

The amzing part of all of this is that anyone can be a crowdfunder.  It used to be you needed large sums of money and be part of an angel investor group to feel like you were contributing and making a difference in a cause.  Now using a crowd funding site you can donate as little as five dollars and know that your contribution as a crowdfunder is being added to those of thousand of other peoples and that your small donation is helping to make a difference for that cause that is so close to your heart.

Choosing the most feasible business opportunity

As en entrepreneur looking to put your mark on the world, it is essential that you choose the most feasible business opportunity. Irrelevant of whether you are starting a residential paving business, a digital marketing agency, or a fintech app, planning and access to finance will be on your to do list. A number of issues come into the equation here, including the investment of time, money, finding the right resources to support you and of course weather there are sufficient room for growth within the industry. You are going to spend time and energy in creating a business plan, finding business finance and adding work and commitment to the business so you have to ensure you are choosing the right opportunity. 

So choosing the right opportunity will seldom come easy. Here are a few pointers to remember to ensure that you start right.

•Look at the business plan of the firm and ensure that there is enough scope for growth in the financial forecasts of the business. Be reliaistic here and ensure that the plan is based on realistic market research and a good feasibility study.

•Have legal representation. Your attorney should be present when you're negotiating with the licensor-seller. At the very least, your attorney should go over the contract to purchase the business opportunity and advise you as to whether or not you should sign it in its present condition. He or she should explain what each aspect of the contract means so that you understand what you're signing.

•Have financial representation. Your accountant should look over the financial statements of the licensor-seller. In addition, he or she should be able to check out the financial strength of the company and determine whether the business is a viable financial investment for you.

•Make your own independent survey of other owners of business opportunities sold by the parent company. Are they happy with the company? Did the company do everything it promised? Is the company good to work with? Does it give its distributors help? Does it send out advertising materials? What do they feel are the strengths of the opportunity? If they had to do it over again, would these licensees buy another unit? Would they advice you to buy a unit?

•Contact competitors. This will verify the status of the company in the industry. A competing company will tell you in a hurry what the company's weaknesses are. You'll also get an opportunity to see whether or not the business opportunity compares favourably in terms of pricing and so on.

•Check the credit of the seller. Your accountant or the person auditing the business opportunity can help you with this.

•Be sure you understand everything you're signing. Read the disclosure statement, the purchase agreement and the advertising bulletins carefully.

•Check the credibility of the parent company. The parent company doesn't have to be big in terms of dollars to be credible. Use your common sense and advice from people you trust to determine whether or not a company seems credible. In many cases, small companies are a great investment for a buyer because you generally deal with the president or the top people in the company. They are going to be training you and working with you. This is a tremendous advantage, as opposed to working with somebody five or six rungs down the ladder who may be just doing a job. Are the seller's people truly interested in you? Do they seem to be sincere? Did they check you out thoroughly? Are they concerned with the kind of buyer that will be carrying their banner? This is very important. If they're just interested in taking your money, you're in trouble.

•Check the performance of the parent company. Are the seller's claims backed by performance? Do the claims that the seller make when advertising their product, for example, stand up at the store level? Do the current operators you've talked to confirm the profit claims that the seller makes?

•Check the company's management. It's not enough that they've got a good idea. Do they have the management strength to be able to train you, help you and keep the company running for another 20 years?

•Know all the costs and obligations, both yours and the seller's. What costs are you going to have to incur? What are your obligations on an ongoing basis?

•Is the company going to train you? Is training at your own expense? In most cases, you have to pay your own expenses to the training site. How long will the training last? Do you have enough money to sustain yourself while you're in training and before your business starts earning money? What kind of ongoing supervision will the company give you?

•Determine what type of advertising program is available from the licensor. Will that advertising program work for you? Check your local market. For instance, if you're buying a business opportunity in which you'll be selling bathtub liners, will advertising in trade magazines really help? Also, what are their ads like? Is the copy good? What about visual art? Don't negate the possibility that their advertising program will hurt you more than it will help. Just because you're dealing with a company that has experience in the field, their marketing campaigns aren't necessarily going to be successful.

•Are you getting value for your initial purchase price? Examine the list of equipment, fixtures, inventory, operating supplies, etc. and call a few suppliers dealing in these items. Compare the prices those suppliers quote you against the business opportunity's prices. You may be able to purchase everything, including the inventory, for less money yourself than you could by affiliating with the licensor.

Once these issues have been addressed and you are happy with what you have found, you will surely be able to choose the correct opportunity with more confidence.

Cheap Franchise Opportunities in South Africa

Starting a franchise has become a popular method of starting a small business in South Africa. Most good franchises will help you with your business plan, finding startup finance and provide you with support during the start-up process. Apart from that, as the business is already proven to be working, the risk on the entrepreneurs side is dramatically reduced.

Cheap franchise opportunities are highly sought after due to their low investment costs. These opportunities are available across several different industries. In addition, some of these cheap franchises are for people who would like to operate one on a part-time basis. Vending services are popular franchise choices and are relatively cheap to join. There are several costs related to franchises that need to be evaluated and researched prior to joining one.

Franchises can be started for as low as R10,000 in liquid cash and can go up to over R1000, 000. Some cheaper franchises have similar attributes such as they can be operated from your home and they require no additional employees other than yourself. Operating a franchise from your home can save you a lot of money because you do not have to worry about leasing or building a separate office for your business. Some examples of these types of franchises include cleaning services, landscaping services, travel planning, vending services, tutoring services, and more. Some franchises, such as vending ones, may require you to negotiate or lease space at a retail store (i.e. supermarket, drug store) or shopping mall.

Many of the cheap franchise opportunities can be operated by you with no additional employees. This can be a major cost-savings because you do not have to pay salaries or benefits. For example, if you start a franchise of vending services that rent DVDs then you may be able to manage the machines yourself from your home. Vending services allow you to operate a franchise without actively having to be present to make money. You may only be responsible for setting up the machine, negotiating the space, and ensure that it is operating correctly. This kind of part-time franchise may leave you with time to pursue another business venture, hobby, or family time.

Vending service franchises have increased substantially over the past few years. Vending machines now sell items ranging from candy to energy pills to DVDs. You have many choices in deciding which industry you want to get involved with. Consider your market and the people who visit the retail space you are going to place the vending machine in to help you decide which product may sell the best.

There are many types of cheap franchise opportunities available. Most franchise programs will state how much liquid cash is required to join the franchise program. Vending services that sell candy or rent DVDs are very popular and inexpensive to join and operate. These types of services can be operated from your home and possibly on a part-time basis so that you can enjoy other ventures.

Article Source: http://EzineArticles.com/5865051

Making sure your idea is viable

Few things are as exciting as coming up with a new business idea. You lie awake all night thinking about the opportunities as results that the new idea will bring into your life. The mind is an interesting thing and one idea leads to the next and soon you are running your own business empire. But of course you have to start with the basics, and the basics for almost every entrepreneur I know is establishing a need for the business or concept after which you can start thinking of the business plan. You can of course come up with an entirely new product idea for which there may not even be a need as of yet, in which case you will need to invest heavily in marketing to educate your potential clients on why they should be buying your product. If yours is not the next iPad though, chances are that you need to start with finding out if clients will be interested in buying your product and the actual terms related tot heir interest.

So how do you go about testing your own business ideas?

Well there’s several approaches, ranging from asking friends, family and anyone down the pub for their opinions (not recommended) to actually going out there and doing it – if it succeeds it’s a good idea, if it doesn’t it’s not (again not recommended as it’s a very expensive way to test a business idea). Instead I favor testing any ideas for your own business in several ways. Firstly desk research and when it comes to that in a recent post ‘The 2-Minute Opportunity Checklist for Entrepreneurs’ on the Harvard Business Blog, Prof. Daniel Isenberg (of the The Isenberg Entrepreneur Test) described a pretty good test:

   1. Does your business idea soothe someone’s pain, discomfort, frustration, or dissatisfaction?
   2. Are there lots of those people out there?
   3. Do these people (or companies, or governments) have money to pay for it?
   4. Will they be able to decide quickly to buy your product or service?
   5. Does your idea exploit something about you that is outstanding or unique?
   6. Are there important assets you have that no one else has? (money, access to customers, technology, leadership skills, execution, location, salesmanship, etc.)
   7. Can you think of at least two people who might join you?
   8. Do their skills complement yours?
   9. Do they have the same values as you do?
  10. Do the majority of people whose opinion you highly respect think your idea is a good one?
  11. Does at least one person (and not more than three people), whose opinion you highly respect, think your idea is a bad one?
  12. Is there something about the idea or its implementation, that compels you to really devote yourself to it?
  13. Can you sneak by the big competitors without them noticing you for awhile?
  14. Can you find a potential customer who will take your calls, give you feedback, try a pilot out?
  15. Can you start up without huge gobs of money?
  16. Can you keep your fixed costs low during launch?
  17. Does your idea lend itself to small incremental steps that can inexpensively generate valuable information as well as at least a little cash?

He suggests that if when you evaluate business idea against this criteria it scores 16 or more ‘yes’ answers then you should get on and start a business around your idea. He expands on a few points noting that great ideas are those that attract detractors, explaining:

    …unless you have at least one major detractor, then you are probably not on to something big. In fact, if everyone thinks it is a wonderful thing to do, then probably a legion of competitors is on the launch pad.

Then provides a great description of a good business opportunity:

    Opportunities consist of:

       1. the alignment of a market need,
       2. a personal competence,
       3. values or motivation.

If your business idea passes that desk research stage, then it’s time to start failing fast, failing cheap! By which I mean find cheap ways to develop prototypes and test your ideas. Where cheap doesn’t necessarily mean low cost, but rather that they use a relatively low proportion of your start-up capital. The point being that you will make mistakes and get things wrong in the early days of any business and if the first mistakes uses all your capital it’s game over, in contrast if the first mistake costs you just 10% then you have nine more chances to get the idea right and start a successful business.

Once this is done you can start to put your business plan together and ensure that your knowledge of the product and market is expressed in such a way that you can attract business finance, should that be needed. In every step of the way the excitement will of course be growing and the better you know that the demand is really there for your forthcoming business the more confidence and excitement you will take in to the next stage.

Find a business opportunity

Selecting the right business opportunity in which to invest your time and energy may be one of the more important decisions you will make. Not only of course do you want to ensure that you safeguard your business investment and that you will have a good return on the business plan that you invest in but it is also important that the idea excites you and that you are not going to be miserable every day while working on it. Create a business plan template or a mind map outlining what you are interested in, what your values and passions are and perhaps use this as a starting point.

Here are a few further tips on how to get started.

Step 1
 Are you ready to tackle new small business opportunities?  While working from home and being your own boss sounds great, not everyone has the entrepreneurial spirit, drive, and business knowledge to make it work.

Step 2
Decide if your new business opportunity is product or service oriented.  If you are a professional, such as a dentist or lawyer, this is an easy choice.  If you choose to enter the product market, decide whether you will sell directly to customers (retail) or to other businesses (wholesale).

Step 3
Choose online or local business.  Will you sell your product or service locally, or on the internet?  The overhead and start-up costs are often lower for e-commerce companies; however, you also need to think of your own knowledge of internet business and marketing, the location and accessibility of your target market, and more.

Step 4
For local business opportunities: Word-of-mouth is often the best way to find a business opportunity in your area.  Perhaps an established small business owner is considering retirement, or wants to move out of the area.  Also, check newspaper listings and visit your local small business center for business for sale listings.

For online business opportunities:  When searching for small business opportunities online, it is important to recognize small business scams.  Use reputable business listing services such as Entrepreneur.com's Opportunity Finder to review available franchise, online, and home-based business opportunities.

Step 5
Match small business opportunities to your start-up budget.  Compare the cost of each new small business idea to your available capital and any funds you can raise or borrow.  Franchises and turnkey businesses may provide an estimated return on your investment, while new business ideas require financial forecasting.  Compare the cost of starting each new business with the anticipated return to see if the idea is feasible.

Prepare a formal business plan before moving forward with any new small business idea.  Even if you choose a different opportunity, the business planning stage gives a realistic overview of the business idea and whether or not it will work for you.

Once you select an idea, consult a business lawyer, accountant, and small business resource center to ensure all licensing, tax planning, and other considerations are covered.  Do not forget to include the cost of these professional services in your start-up budget.

How to choose the right business opportunity?

Although many businesses are started because the owner had a light bulb idea from where business investment was secured, a entrepreneurial team put together, a business plan written- or maybe I should have said that in the beginning - and from there the business started, as many business owners start something with the intention of working for themselves rather than just wanting to back a certain idea. Starting an industrial paving contractor business as an example is probably geared towards creating a future for yourself and your family. So if this sounds more like you then, what may be the best way forward? Yes we will be reviewing plenty of business opportunities on this blog but it may also be useful for you of course to be pro-active in finding your own idea.

Whats more is that starting off with an idea that has not been properly researched can prevent your business from reaching its potential or cause it to suffer a premature death.

How to Research an Idea For Your Business That Is Certain To Work?

Coming up with a great idea for a business is the one thing that many potential business owners struggle with and for good reason.

Just think of how many businesses have been based on ideas that do not fulfill a demand in the market in they were envisioned to.

Unfortunately businesses that are created and started on ideas that haven’t been properly researched have often died premature deaths at great cost to the business owner.

So how do you come up with a great idea for your business that you know will work?

Well for starters it is wise to do a bit of research in terms of demand in your target market for your idea’s products or services before investing any time and money in your business.

Passion over a certain idea is a start but may not fulfill the requirements for a successful business.

For instance your passion in the mating habits of the north sea clam may not be a great business idea as it won’t fulfill a need in the marketplace even if you have the most brilliant books & other stuff to sell on the subject.

In other words the idea you come up with needs to have a certain demand but too much may mean too much competition which will make it just as hard to make a success of. So think niche market – in other words come up with an idea that satisfies the demand for a specific market segment & don’t try and be everything for everyone.

Business Opportunity of the week - On-line Student Tutorials

This weeks business opportunity of the week is for the young entrepreneurs out there in the form of On-line Student Tutorials. This is a much needed idea aimed at students and school goers who fall behind at school or simply want to improve their grades. 

An Internet business that focuses on supplying quality tutorials on the web could be lucrative. Imagine being able to offer courses ranging from how to understand Maths, Speak and write better Zulu and how to pass the science and biology exam. The range of courses on offer could be huge and could cover every aspect of school ranging from hobbies, education, sports, business, languages and much more. 

The great thing about this idea is that once it is set up, your overhead costs are really low and you really only have to focus on marketing 

So if you have a bit of capital, love education and are willing to commit for the long term then setting up an Internet tutorial website could be both enjoyable and lucrative in the long term. 

This business can easily be run from home initially until growth demands 
office space of your own.

Upside: If you remember your school days and the frustration of not understanding Maths, science or any other subject, or if you have kids in school currently experiencing the same challenges you would know that this business idea is a winner.
Downside: Its fairly easy to start-up and once you make a success out of it you can be assured that competitors will follow.

Verdict: A great idea for entrepreneurs with IT savvy, a bit 
of cash and the drive to make it work. Initial set-up costs may be relatively 
low but a solid marketing plan and budget to support it is a must. My 
research has shown nothing similar in South Africa yet, so the early 
bird is likely to grab market share. 

If you need support with your business or business plans please contact us