Pros and Cons of Taking Small Business Loans

If you are planning to have a small business, you know that you would need a substantial amount of money to start it. If you already have money prepared then you can be sure that you will be able to use it well as long as you have already done proper research about it.

You also have to research about the type of business that you would like to put up. Would you like a computer shop wherein people who would need computers immediately can go? You may also have to choose FaceTime for PC download because some people only go to computer shops for communicating with other people especially if they do not have this on their phones just yet.

Pros and Cons of Taking Small Business Loans

If you do not have money however, this can be different because in order to have a small business, you would need to be able to have your own loan. You have to remember that having your own funds can help tremendously but if you do not have much, there are various options that you can take. You can learn more from here.

Of course, you can always loan money from people that you know. You can promise to pay them back once your business flourish but this can be tricky because you have no idea of knowing when you will be able to pay people back. At the same time, you may strain the relationship that you would have with other people.

One of the options that you can take is to get small bank loans. You do know that taking loans can be something that people would not want to have but this can still be effective in getting people what they need. Here are just some of the advantages that you can get from having small business loans.

  • Personalized Services – Small business loans are usually taken from banks so you know that you will not be able to take a loan unless you are a client of that bank. This can become an advantage because you become familiar with the various things that you have to do. You know that it will be possible for you to know what you should do.
  • Various Loan Options – It would again depend on the type of business that you are going to pick out but you know that you will find one that can work well with what you need. There are always various options that you can choose from that will suit what your business currently needs.
  • Lower Interest Rate – You have to remember that all loans come with interest rates. There are some companies that you can get loans from that will cost a lot of money but you can be sure that with small loans, the interest rates that you have to pay for may be even smaller than the interest rate of your credit card.

With all of these options that are available, you can be sure that this is something that will help you out a lot.

Investing in the Healthcare Sector

If you’re someone who has good knowledge of the healthcare sector, you can, perhaps, form a small business which caters to the needs of one of the many different healthcare sectors. Whether you decide to work for the pharmaceutical sector or with the hospital, know that it is an excellent opportunity for you, especially if you can pinpoint the sector that you want to work with and find the major industries in those sectors, for you to make a profit. However, there are many technicalities that one needs to understand before attempting to cater to such a sector. There are several list of classes as well as trends that one needs to understand.

Investing in the Healthcare Sector

Understanding the trends of the healthcare sector

There are specific trends that you will need to pay attention to before deciding to start your business.

Trends that are positive:

  • People who live longer despite having chronic disease
  • Baby boomers and the aging population
  • Advances in technology
  • Diabetes and obesity epidemics
  • Personalized medicine
  • A specific disease’s global reach

Trends that are negative:

  • The uninsured
  • Consumerism
  • Cost controls
  • Expenditure becoming a large part of the GDP
  • A single-payer system (U.S. Government/ Medicare)

Drug companies

If you’re planning on catering to the medicinal sector in healthcare, there are a few things that you need to be wary of. Keep in mind that despite the fact that both biotech and pharmaceutical companies manufacture “drugs”, their method in how the drugs are created differ. Both these companies also spend a good portion of their profits on research in search of new compounds. This industry is highly affected by trial and error.

Catering to the hospitals

These are the institutions that provide the healthcare. Since the U.S. laws state that any facility that has an emergency room should treat patients regardless of whether or not the person has money or health insurance in order to pay for it.

This has caused competition among the clinics and hospitals that do not have an emergency rooms, giving them the chance to make more profits, as they have the chance to pick and choose who to treat. On the other hand, the hospitals are becoming victims to bad debts which are affecting their overall profitability, and as an investor, that is a sector that you have to focus on.

Catering to the healthcare sector

As you know by now, there are many different sub sections that you can focus on if you want to start a business that will cater to the healthcare sector. You will receive generous returns if you can manage to make a profit, but know that it can also be extremely complicated and tedious. This sector is vast, which gives you the opportunity to choose from among both small and large companies alike in each of the various industries.

No matter what sector you decide to aim for, do a thorough research before you begin, as you may end up falling in a pitfall instead. If you want to learn more about investing in a healthcare sector, read http://www.investopedia.com/articles/stocks/08/investing-in-healthcare.asp

How to Start a Video Streaming Business

It is no doubt that the internet has now become a gateway for people not only to gain knowledge, but also to thrive in their careers. In fact, many people around the world are now using the internet for business purposes – they build websites in the hope of earning some cash.

How to Start a Video Streaming Business

One particular business model that is becoming popular in the online world today is video streaming. The primary reason why many aspiring entrepreneurs consider this niche is because they know that it is something that is “in demand” in the market today. Since the advent of video-sharing websites like YouTube, more and more people have been obsessed with watching videos online. And in the years to come, it is believe that more people will be looking for online entertainment. If you’re a video fanatic and searching for a way to make a living online, then starting an online streaming business can be a great option for you. Here’s the basic guide to get started:

Step 1: Decide your niche. The first thing to do is you must decide what types of videos you will offer to your audience. You can certainly choose a variety of video products – music, celebrity, personal improvement, animals, horror, comedy, how-to’s, and even Hollywood films; however, this will cost you more upfront as you’ll need a larger web space to store them and usage rights to use them. If you’re just starting out, the best thing is to start with topics that most interest you or your target audience.

Step 2: Create a video-streaming website. Obviously, you cannot run a streaming business without a website, so you need to create a fast and responsive site. Think the best domain name that will best describe what your business is, then register the domain name. Afterwards, signup with a dedicated web hosting provider that offers high-bandwidth servers and large storage space. If you can afford it, get the best hosting plan available as you’ll need it to properly run your data-heavy streaming service.

Step 3: Design your site and include necessary codes. Choose a template that will look good with your content. You would also want to include other features, such as menu options, proper codes, and useful plug-ins, to make your site more manageable and user-friendly. If you’re not that techy enough, you can always hire someone to do the job for you. But keep in mind that this process takes extra cost – but it’s beneficial.

Step 4: Get the required licensed and usage right for your videos. Before you upload the videos on your site and share it to the public, ensure that you have the permission to share those products – whether you’re collecting them from television and movie networks or independent providers. Having this permission will give you an assurance that your profits will not suffer from legal penalties.

Step 5: Determine how to profit from your site. There are many ways for you to be able to generate revenue from your video streaming website – you can include subscription fees, sell advertising space, offer products related to your content, utilize PPC or PPM programs, or get sponsors. Choose what you think is best for your business.

There are more things that you have to work on to ensure that your chosen venture will succeed. These steps are only a few of the things to do when you decide to run a video streaming business. But we hope that this simple guide will help aspiring entrepreneurs like you get started in your journey and finally achieve your dream.

Do you want to watch live football streaming? Visit watchfootballonlinenow.com.

Tax Refunds for Small Businesses

Small businesses can enjoy a lot of advantages that large corporations cannot. An example of which is the fact that small businesses get to serve their clients directly and are able to gain more hands on experience about the clients’ wants and demands than any large corporation can. Being part of a small business can be a blessing in many ways, and one of the major advantages that small business have over large corporations is the tax refunds.

Tax Refunds for Small Businesses

Deductions

It is difficult to run a small business by yourself. That is why, you should accept all the help that you can get. Don’t be shy about accepting your tax refunds, because you will need the money for later purposes. There are many expenses that you can get back, which include:

  • Office supplies: Keep each and every receipt of every office purchase that you made throughout the year. You will be able to get the cost of them all back at the end of the tax year.
  • Furniture: That’s right. Furniture is also part of your office supplies. You have 2 choices for the furniture in this case; you can either choose to deduct the entire cost in the year that you bought the furniture, or you could slowly deduct the expense over 7 years, which is also called depreciation. If you decide to get the entire cost back in one year, the deduction you will be using will be the Section 179, which allowed a maximum of $25,000 in 2014. If you decide to opt for the latter option, however, you will need to use a special IRS chard to figure out the math.
  • Other equipment: This time we’re talking about copiers, computers, scanners, and fax machines. Just like the furniture, you can either take it all in one year or you can choose to depreciate, in this case, over a period of 5 years.
  • Mileage: If your job requires you to drive around, the IRS will give you some of the cost of your trip back. However, proper documentation is necessary in this case. It is crucial for you to keep a thorough record of your mileage, date, parking costs, purpose of trip, and tolls. In this case you have many different options that you can opt for.
  • Meals, travels, gifts, and entertainment: This is no different than travelling in your car for business related purposes. Which is why, you might as well indulge yourself! Whether your transport was by auto, rail, or air, the entire trip is tax deductible. Additionally, if you have to stay the night at a hotel, the cost of that too will be tax deductible. However, meals are the only exception. You can get back only half of what you spend on your food, while your travel and hotel expenses will be covered entirely.

These are just some of the many refunds that a small business can get. If you want to know more about it, read http://www.bankrate.com/finance/money-guides/a-dozen-deductions-for-your-small-business-1.aspx

Starting a Small Payroll Services Business

If you’re someone who’s always wanted to be the one in control and not be bossed around by someone else, then maybe starting your own business will be a good option for you. However, no matter which business you may decide to venture into, remember that the path to making a profit is a thorny one, and you should be prepared for the several ups and downs you will have to face. That said, if you happen to have a certification in payroll service, then perhaps starting a small business in that field would be a good idea.

Starting a Small Payroll Services Business

Getting started

It’s always best to know as much as you possibly can about the field you’re going to devote your time, effort, and career to. That is why, becoming a professional with a certification in payroll services is a good idea, as that will also give you authenticity and will help build your client’s trust in you in the future.

You then need to decide what kind of a business you want to start. Will it be a partnership or a sole proprietorship? You need to know the tax structure of your desired business path before you begin. Consult an IRS beforehand. Although you can work from home, if you plan on hiring employees, however, you should also get a proper established office space to conduct your business from.

You then need to obtain an EIN from the IRS. You might need it for many different purposes, especially if you have employees or have a business that is a partnership or a corporation. You might also need a state license to conduct your business, so check with the state’s secretary to see if it applies to you.

You might also require a zoning permit in accordance with your local business license, so check the requirements for both and see if you will need a zoning permit or not. Additionally, for those who have a corporate or partnership business, an attorney will be needed as well. If you want to know more details, check out http://smallbusiness.chron.com/start-payroll-service-business-4341.html

Finances

As can be seen, starting a small business is no easy task. Aside from the heaps of paperwork that you need to complete, you also need to have a substantial budget to pull it off. You can take a loan for your company for the following reasons:

  • To improve or purchase buildings or land for the purpose of the business.
  • To purchase existing or new renovations for a property that is leased by a tenant.
  • To improve or purchase existing or new equipment.

However, a business loan cannot be taken to pay for goods/services as such as the working capital, franchise fees, goodwill, inventories, research and development.

For the sake of growing your company, you can also consider applying for a grant, which is a non-repayable product/fund given to you by the grant makers, who are a corporation, trust, foundation, or a government department. You will need to submit a form of proposal to the grant makers if you wish to have a chance of receiving it.

Managing Your Money More Effectively

There is a possibility that you would like to start saving up because you have noticed that every time your salary arrives or you have a source of income, you end up living from paycheck to paycheck. You have to know how you can manage your income effectively so that you can start having savings that you can use when you need extra money. Aside from that, you have to know that the earlier you start saving money, the more that it will be a habit. You can learn more on saving up here.

Managing Your Money More Effectively

Here are some of the things that you can do so that you will start saving:

  1. Spend Less Than What You Earn

You have to remember that if you are spending much more than what you are currently earning, there is a big chance that you will acquire more debt. Your debt may be manageable in the beginning but how sure are you that it will not grow bigger in the future. When you receive your paycheck, make sure that you will set aside a small amount each time. You may have to start with a little bit of money in the beginning. It is likely that when you see how much you are saving, you will be more engrossed with trying to save so you will get to save more.

  1. Have A Plan

One of the main reasons why you may be having trouble with trying to save your money is because you do not have an actual plan that you can follow. According to reports, when you plan about how much you have to save, you have a tendency to follow your plan.

  1. Have Your Own Bank Account

You may be having some trouble with trying to save because you do not have your very own bank account wherein you can place your money. There are a lot of banks that only require a minimum amount when you open an account so you will not have any problem with trying to open an account and maintaining it.

  1. List Down What You Have to Pay For

You may have several bills that you have to pay for. You can list them all down on paper or you may also choose to place them on the software that you will choose to help you manage your finances properly. For everything that you need to spend and save for, make sure that you know everything.

  1. Stop Spending for Unnecessary Things

Do you find yourself eating out often when you know for a fact that you can always cook at home? Eating out may be an unnecessary task that you can avoid right now. When you eat at home more, you will be spending more time with your family and at the same time, you might be surprised with the extra money that you will acquire after a month.

With all of these things in mind, you can check out smsf so that you will have a better chance of saving up money for your future. Who would not want to have extra money, right? You have to do something now so that you can acquire more.

Being Effective at Bookkeeping

Are you starting your own business? There is a chance that you would like to learn more about it so that you can do it effectively. You have to remember that you will be working with a lot of documents and you have to make sure that you will be effective at keeping all of your documents and filing them properly.

Being Effective at Bookkeeping

There are some things that you ought to remember so that you can be effective at bookkeeping. Are you interested to know what those things are? Here are some of the things you can do:

  1. Remember that you have to complete all of the documents that you need.

You may assume that bookkeeping simply means filing the important documents that you need but this is not the case at all. When you do bookkeeping, you are responsible for making sure that you will complete all your documents. The moment that you complete everything, that is the only time when you can be effective at bookkeeping.

  1. Know the Various Terms that You May Need to Use

You have to remember that when you are bookkeeping, there are different terms that you may not be familiar with but once you familiarize yourself with all the terms, you will be able to work on the things that you need to better. If you do not know anything then research because you have to make sure that you are aware of the terms that will be used all over and over again.

  1. Arrange All of the Transactions that You May Need

There are different transactions that you may have when you have your own business. Remember that there are some that you can list down as expenses and there are also some that you can list down as income. When you are able to track down all of your transactions, you will not have any problem at all.

  1. Find the Right Software

Since bookkeeping is a hard thing to do on your own, you may rely on outside sources to help you out such as the right software that you can trust with all of the transactions that you may have. You have to remember that to become a responsible bookkeeper, you ought to know when you may need help and you are not afraid to get help as well.

  1. Make Sure That You Have A Backup Record

You may have placed everything in books – all of the documents that you need in order to work effectively but you have to remember that keeping a backup record is necessary if in case you lose some of your files. You may want to photocopy original documents so that you will have extra copies. You may also choose to scan important documents for easy printing whenever you need it. Do remember that there are some transactions that still need the original copies of documents so make sure that you will do proper bookkeeping.

You can be an effective bookkeeper. If you need more facts and information, you can check out this link. It may take some time before you can become an expert but the more you do it, the better you will be at it.

SMALL BUSINESS LOANS IN NEWFOUNDLAND, CANADA

SMALL BUSINESS LOANS IN NEWFOUNDLAND, CANADA

Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. What businesses are defined as “small” in terms of government support and tax policy varies depending on the country and industry. Small businesses range from 15 employees under the Canadian Fair Work Act 2009, 50 employees according to the definition used by the European Union, and fewer than 500 employees to qualify for many U.S. Small Business Administration programs. Small businesses can also be classified according to other methods such as sales, assets, or net profits.

Preparing a small  business plan in Newfoundland will identify the amount of capital required. You will need start-up capital for a building and/or leasehold improvements, licenses, equipment, legal and incorporation fees and materials. You may also need operating capital for rent, utilities, wages and salaries, benefits, telephone and transportation. You will require the services of a bank to provide for cheques and deposits and to keep a separate record of your business transactions.

There are a  lot of ways to get a small business loans in Newfoundland Canada. Canada Small Business Financing Program is the leading organisation which helps with all kinds of help ragarding small business. Small businesses are an important part of Canada’s economy, but they face unique challenges when they look for financing.

Fotolia-Types-of-Financing-300x294

TYPES OF BUSINESS FINANCING:

*Term Financing: Term financing is required to fund the purchase of business assets such as equipment, land and buildings.

*Equity Financing: Equity financing is the provision of funds for capital or operating expenses in exchange for a percentage of ownership interest in the business financed without any guaranteed return, but with the opportunity to share in the company’s profits.

*Working Capital: Working capital is money needed for everyday operations such as rent, utilities, wages and office supplies. Many working capital needs are funded by the cash surplus of a business. During startup, and at times when cash requirements outpace contributions from sales, there may not be enough cash on hand to cover the day-to-day operating needs. In this case, businesses may acquire working capital either by borrowing money for a short time at fixed interest rates and repayment schedules or by establishing a line of credit at a bank or other financial institution.

*Line of Credit: A line of credit may be extended to a company representing a sum of money to be used as the enterprise sees fit. The interest on a line of credit is computed only on the amount actually used.

*Other: In addition to banks and other financial institutions,there may be other sources offunding you can access. These include personal equity, family and friends (usually called love money), informal investors (called angels), venture capital companies (private firms that invest in high risk/high return ventures, usually by acquiring large shares of the business and providing management assistance), supplier credit, equity funding from its many sources, shareholders and government departments and agencies. An Economic Development Officer can discuss your funding needs with you and offer financial advice. For more information on assistance available in this province, contact your local Innovation, Trade and Rural Development office.

The Canada Small Business Financing Program has been helping small businesses with their financing needs for over 50 years. Under the program, the Government of Canada makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

MAIN OBJECTIVES:

-To help new businesses get started and established firms make improvements and expand

-To improve access to loans that would not otherwise be available to small businesses

-To stimulate economic growth and create jobs for Canadians

The program has assisted more than 142,000 businesses since 1999, with loans totalling about $1 billion each year.

ELIGIBILITY:

Small businesses or start-ups operating for profit in Canada, with gross annual revenues of $5 million or less.

Not eligible under this program are farming businesses (Agriculture and Agri-Food Canada has a similar program for the farming industry — for information, visit www.agr.gc.ca), not-for-profit organizations, or charitable and religious organizations.

AVAILABLE FINANCING:

Up to a maximum of $500,000 for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.

PROCESS OF APPLYING FOR LOAN:

Financial institutions deliver the program and are solely responsible for approving the loan.

Discuss your business needs with a financial officer at any bank, caisse populaire, or credit union in Canada. The financial officer will review your business proposal and make a decision on your loan application. Once the decision is made to offer financing under the program, the financial institution will disburse the funds and register the loan with Industry Canada. (Find a lender near you)

Loans can be used to finance the following costs:

-Purchase or improvement of land or buildings used for commercial purposes

-Purchase or improvement of new or used equipment

-Purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant

For example, you can use a loan to finance:

Commercial vehicles, hotel or restaurant equipment, computer or telecommunications equipment and software, production equipment, admissible costs to buy a franchise.

You cannot use a loan to finance items such as:

Goodwill, working capital, inventories, franchise fees, research and development

COSTS:

The interest rate is determined by your financial institution and may be variable or fixed.

Variable rate: The maximum chargeable is the lender’s prime lending rate plus 3%. Fixed rate: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.

A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan. The registration fee and a portion of the interest are submitted to Industry Canada by the lender to help offset the costs of the program for the government.

TERMS OF FINANCING

grant-money

Lenders are required to take security in the assets financed. Lenders also have the option to take an additional unsecured personal guarantee.

For more information, please contact your financial institution (Find a lender near you).

This program is administered by Small Business Financing Directorate.

PROBLEMS

Small businesses loans can encounter several problems related to Corporate social responsibility due to characteristics inherent in their construction. Owners of small businesses often participate heavily in the day-to-day operations of their companies. This results in a lack of time for the owner to coordinate socially responsible efforts. Additionally, a small business owner’s expertise often falls outside the realm of socially responsible practices contributing to a lack of participation. Small businesses also face a form of peer pressure from larger forces in their respective industries making it difficult to oppose and work against industry expectations. Furthermore, small businesses undergo stress from shareholder expectations. Because small businesses have more personal relationships with their patrons and local shareholders they must also be prepared to withstand closer scrutiny if they want to share in the benefits of committing to socially responsible practices or not.

HOW TO START A SMALL BUSINESS IN NEWFOUNDLAND

HOW TO START A SMALL BUSINESS IN NEWFOUNDLAND

Small businesses make up almost 98 per cent of all Canadian enterprises. Small businesses in Newfoundland and Labrador account for close to 40 per cent of all employment. Even large corporations depend on the services and products of small businesses. Keep in mind that all large businesses were once small businesses. Some people run full-time businesses from their homes. In fact, one-in-four Canadian households operate some kind of home-based business. Home-based employment is a common and logical work style in rural Newfoundland and Labrador. Overheads tend to be low as there are generally no new premises to buy or rent. Hours are flexible and new business ideas can be tested on a small scale. It is often a way to learn about business with very little capital and start an enterprise that is almost debt free.

Perhaps you have wondered about starting or owning a small business and did not know where to begin. You can find out bellow what basic steps are necessary to start or own a business, the planning you need to do and the kind of personality you need. Personality? Yes, the personal qualities you bring to business are just as important as intelligence and education. Successful business people tend to be hard-working, confident, optimistic, self-driven people who are able to overcome obstacles. Some post-secondary education can help, but it’s not essential. Perhaps the single most important quality to succeed in business is a desire to work for yourself and succeed. While you can learn a great deal about business subjects in school, it’s no substitute for becoming involved in the day-to-day management of a business. Many people start part-time businesses out of their homes and gradually acquire their business skills. After reading this handbook you will have a better idea of the steps necessary to start a business. If you need more information, or would like to discuss your business ideas, call your local Department of Innovation, Trade and Rural Development office and speak to an Economic Development Officer. Also, check out the department’s website at www.gov.nl.ca/intrd.

Step 1: Assess Yourself:

So, you’re thinking about starting a small business. It could be one of the most important decisions you’ll ever make. Before you proceed, you should consider the steps involved in launching your own business. This publication is designed to help you through the process. Entrepreneurship offers many rewards, including the freedom of being your own boss, the personal satisfaction of building a prosperous business and the chance to earn an income that is limited only by your choices, skill and determination. There are, however, many risks. Many would-be entrepreneurs are not aware of the effort involved in starting and operating a small business. Many new ventures place heavy demands on your time, your family relationships and your finances. In addition, many small businesses fail within the first three years, and many require several years to return the entrepreneur’s original investment. That’s the bad news. The good news is that small business ownership offers you financial and decisionmaking independence. If your venture succeeds, you gain job security and the opportunity to provide employment to others.

Step 2: Identify a Business Opportunity:

Most successful businesses start with a good idea. This idea may be your own or may be drawn from a number of available resources, including:

* Business contacts and acquaintances.

* Business magazines and newspapers which often contain business success stories, how-to information for would-be small business owners and lists of startup as well as business purchase opportunities.

* Industry publications that report on trends and developments.

* Trade shows.

* Government departments and agencies are often committed to increasing the volume of government purchasing in their area of operation.

* Canada Business is a large network of business information centres that are located in every province and territory. They provide access to books (free of charge by mail) and periodicals on many aspects of business as well as online access to hundreds of databases and tools.

Step 3: Prepare a Business Plan:

In Step 1, you learned whether you had the personal skills, abilities and drive to start a business. You must now evaluate your business idea. The most effective way to organize your thoughts and fully develop your business idea is for you to prepare a business plan. This plan will help you to think about all aspects of the business and may help you avoid costly oversights. The business plan also provides a basis for evaluating the viability of your proposal. Be thorough, accurate and concise as you work your way through the business plan elements described below. The elements do not have to be completed in order. Once a business plan is completed, it may be possible to further analyze your proposed operations. Market research should provide you with a range of prices that consumers will accept. Analysis of your costs will help you determine the cost of producing the product or service. You must determine accurately the cost of doing business. You cannot estimate sales until you can set prices and you cannot set prices until you know accurately what your costs are.

Step 4: Prepare a Marketing Plan:

Describe the product or service highlighting its benefits to the buyer and its unique or innovative features. Identify status of patent, trademark or other legal protection. Describe the type of customer to whom you are aiming your product or service, where they live and what benefits they seek. Determine the total number of potential customers in your market area and the number you can reasonably expect to become customers. Outline the potential growth in the market for your product or service and estimate your projected growth in market share. Market share may be based on total dollar sales or on unit sales. Identify and describe your direct and indirect competitors. Direct competitors will sell products or services which may substitute directly for your own. Indirect competitors will market products or services which may displace yours indirectly. For example, Pepsi TM competes directly with other carbonated soft drinks for market share. Indirect competition for Pepsi TM might include non-carbonated drinks, fruit juice, mineral water or milk. Compare your own proposed operation to your competitors and describe the relative ease or difficulty in entering the market.

Step 5: Finance Your Business:
TYPES OF BUSINESS FINANCING:

*Term Financing: Term financing is required to fund the purchase of business assets such as equipment, land and buildings.

*Equity Financing: Equity financing is the provision of funds for capital or operating expenses in exchange for a percentage of ownership interest in the business financed without any guaranteed return, but with the opportunity to share in the company’s profits.

*Working Capital: Working capital is money needed for everyday operations such as rent, utilities, wages and office supplies. Many working capital needs are funded by the cash surplus of a business. During startup, and at times when cash requirements outpace contributions from sales, there may not be enough cash on hand to cover the day-to-day operating needs. In this case, businesses may acquire working capital either by borrowing money for a short time at fixed interest rates and repayment schedules or by establishing a line of credit at a bank or other financial institution.

*Line of Credit: A line of credit may be extended to a company representing a sum of money to be used as the enterprise sees fit. The interest on a line of credit is computed only on the amount actually used.

*Other: In addition to banks and other financial institutions,there may be other sources offunding you can access. These include personal equity, family and friends (usually called love money), informal investors (called angels), venture capital companies (private firms that invest in high risk/high return ventures, usually by acquiring large shares of the business and providing management assistance), supplier credit, equity funding from its many sources, shareholders and government departments and agencies. An Economic Development Officer can discuss your funding needs with you and offer financial advice. For more information on assistance available in this province, contact your local Innovation, Trade and Rural Development office.

The Canada Small Business Financing Program has been helping small businesses with their financing needs for over 50 years. Under the program, the Government of Canada makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.

MAIN OBJECTIVES:

-To help new businesses get started and established firms make improvements and expand

-To improve access to loans that would not otherwise be available to small businesses

-To stimulate economic growth and create jobs for Canadians

The program has assisted more than 142,000 businesses since 1999, with loans totalling about $1 billion each year.

ELIGIBILITY:

Small businesses or start-ups operating for profit in Canada, with gross annual revenues of $5 million or less.

Not eligible under this program are farming businesses (Agriculture and Agri-Food Canada has a similar program for the farming industry — for information, visit www.agr.gc.ca), not-for-profit organizations, or charitable and religious organizations.

AVAILABLE FINANCING:

Up to a maximum of $500,000 for any one borrower, of which no more than $350,000 can be used for purchasing leasehold improvements or improving leased property and purchasing or improving new or used equipment.

PROCESS OF APPLYING FOR LOAN:

Financial institutions deliver the program and are solely responsible for approving the loan.

Discuss your business needs with a financial officer at any bank, caisse populaire, or credit union in Canada. The financial officer will review your business proposal and make a decision on your loan application. Once the decision is made to offer financing under the program, the financial institution will disburse the funds and register the loan with Industry Canada. (Find a lender near you)

Loans can be used to finance the following costs:

-Purchase or improvement of land or buildings used for commercial purposes

-Purchase or improvement of new or used equipment

-Purchase of new or existing leasehold improvements, that is, renovations to a leased property by a tenant

For example, you can use a loan to finance:

Commercial vehicles, hotel or restaurant equipment, computer or telecommunications equipment and software, production equipment, admissible costs to buy a franchise.

You cannot use a loan to finance items such as:

Goodwill, working capital, inventories, franchise fees, research and development

COSTS:

The interest rate is determined by your financial institution and may be variable or fixed.

Variable rate: The maximum chargeable is the lender’s prime lending rate plus 3%. Fixed rate: The maximum chargeable is the lender’s single family residential mortgage rate for the term of the loan plus 3%.

A registration fee of 2% of the total amount loaned under the program must also be paid by the borrower to the lender. It can be financed as part of the loan. The registration fee and a portion of the interest are submitted to Industry Canada by the lender to help offset the costs of the program for the government.

TERMS OF FINANCING

Lenders are required to take security in the assets financed. Lenders also have the option to take an additional unsecured personal guarantee.

For more information, please contact your financial institution (Find a lender near you).

This program is administered by Small Business Financing Directorate.

Step 6: Insure Your Business:

There is a wide variety of insurance products tailored to the needs of small business. These include the standard insurance policies covering fire, theft and vandalism, which can offset a potentially serious loss of buildings, equipment  or inventories. It is likely that a lending institution will insist that adequate property insurance be carried as a condition of a loan. Specialized types of insurance are also available. For example, business liability insurance will help protect business operations against legal action. Certain important assets of the business, such as plate glass or expensive moulds, may be specifically insured against loss or damage. Business interruption insurance guarantees income during downtime. Plans which can guarantee a level of personal income in the event of temporary or permanent disability are widely available. Life insurance on key individuals in an organization minimizes the impact on the business in the event of death. Insurance coverage is often structured to fund buy/sell agreements among principal shareholders. Proceeds of the insurance policy are used to purchase the deceased person’s shares in the business from his or her estate, eliminating the possibility of those shares passing on to someone unacceptable to the surviving shareholders.

startyourbusiness

PROBLEMS

Small businesses can encounter several problems related to Corporate social responsibility due to characteristics inherent in their construction. Owners of small businesses often participate heavily in the day-to-day operations of their companies. This results in a lack of time for the owner to coordinate socially responsible efforts. Additionally, a small business owner’s expertise often falls outside the realm of socially responsible practices contributing to a lack of participation. Small businesses also face a form of peer pressure from larger forces in their respective industries making it difficult to oppose and work against industry expectations. Furthermore, small businesses undergo stress from shareholder expectations. Because small businesses have more personal relationships with their patrons and local shareholders they must also be prepared to withstand closer scrutiny if they want to share in the benefits of committing to socially responsible practices or not.

SMALL BUSINESS GRANTS IN NEWFOUNDLAND AND LABRADOR

SMALL BUSINESS GRANTS  IN NEWFOUNDLAND AND LABRADOR

Grants are non-repayable funds or products disbursed by one party (grant makers), often a government department, corporation, foundation or trust, to a recipient, often (but not always) a nonprofit entity, educational institution, business or an individual. In order to receive a grant, some form of “Grant Writing” often referred to as either a proposal or an application is required. Most grants are made to fund a specific project and require some level of compliance and reporting. The grant writing process involves an applicant submitting a proposal (or submission) to a potential funder, either on the applicant’s own initiative or in response to a Request for Proposal from the funder.

NEWFOUNDLAND AND LABRADOROther grants can be given to individuals, such as victims of natural disasters or individuals who seek to open a small business. Sometimes grant makers require grant seekers to have some form of tax-exempt status, be a registered nonprofit organization or a local government. For example, tiered funding for a freeway are very large grants negotiated at government policy level. However smaller grants may be provided by a government agency (e.g. municipal government). Project-related funding involving business, communities, and individuals is often arranged by application either in writing or online.

Federal financing for small businesses in Newfoundland is facilitated via a number of programs and agencies. Financing is available in the form of grants (sometimes called “non-repayable contributions”), loans, loan guarantees, income support and subsidized hiring and/or training programs. The government also provides funding for no-cost or subsidized services to small businesses, including workshops, business plan consulting, education, and federally sponsored trade missions. Financing, and federally funded or subsidized services are available both to established businesses looking to grow or expand into new markets and to entrepreneurs seeking to launch a new business.

Did you know that 17 percent of Newfoundland entrepreneurs indicate “obtain financing” as an obstacle to growth? The challenge facing most businesses is how to find and take advantage of what is out there. Most business owners receive financing through banking institutions. However, funding resources are available to small businesses from both the provincial and federal levels of government.

NEWFOUNDLAND AND LABRADOR small businessNewfoundland small business grants and other government programs and resources are increasing their penetration in Southern Ontario, since the formation of the Economic Action Plan – all to the advantage of businesses. – See more at: http://www.mentorworks.ca/what-we-offer/government-funding/#Government funding programs can help small companies tackle financing barriers so they can achieve growth and prosper. Whether the requirement is working capital, expanding the business, software or hardware investment or purchasing equipment, there are many creative ways to approach financing to solve innovation challenges.

For Start-ups and Entrepreneurs (less than 15 employees and or not incorporated for at least 3 years), find out more here.

A Leadership Grant is an award of financial assistance to a recipient in support of starting or growing a small business. Leadership Grants are not loans and do not need to be repaid. Leadership Grants are not Government grants, benefits or entitlements.

The Leadership Grants Organization is a newly registered non-profit funding organization (Registration No.: 4537467) that provides cash awards and in-kind resources to small business owners and entrepreneurs to start or grow a small business in Newfoundland.

Proceeds are allocated on a discretionary basis contingent upon the applicant demonstrating confidence, initiative, preparedness and a reasonable likelihood of future success. Grant funds allow small business operators to procure needed resources such as goods, services, equipment, inventory, advice, training and professional assistance.

Any individual that wishes to start or grow a small business in Newfoundland may benefit from a Leadership Grant.

The following Applicants may apply:

*Small Business owners that wish to grow their existing enterprise.

*Employed persons that wish to increase their income by owning a small business.

*Employed persons that wish to own a small business to gain independence from an employer.

*Unemployed persons that wish to gain income by owning a small business.

NEWFOUNDLAND AND LABRADOR TOURISM - 48 Half Hours Contest

*New, or stay at home parents that wish to increase their household income by owning a home-based business.

*New immigrants or minorities that wish to provide products or services to their respective communities.

*Students over the age of 18 that wish to start a small business to fund their education.

*Retired persons that wish to increase their income and gain independence by owning a small business.