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A Checklist on How to Run an Internet Business

If you have been thinking of a product or service that could provide you a good income, you may well have considered setting up an internet business with the aim of relaxing and watching the money grow. According to IMRG, a company for global e-retailing, consumers spend thousands of their cash on online goods and services. In the past decade, the development of the web has produced extensive profile successes to many professionals with internet business. The internet has truly advanced the way people live their lives. It offered a perfect location to where business-minded individuals can do healthy competition with global organizations. But how simple is it to get started? Here are the steps on how to run an internet business.

1. Have you prepared a smart business plan? The most important starting point of a new business would be the business plan. Starting right would mean knowing your target market and the current competition. You must also have a good plan on how to attract funding and secure good resources. Some business would take more focus on planning ways to build consumer loyalty while forging alliances with wide and strategic connections.

2. Have you found the right market? One of the most essential factors of building an online business is learning if there is a market for the product or service that you are thinking about. You need to find a niche that would make you excel. Think of a niche which still doesn’t have a market leader. If you aim for a highly competitive niche, then it may take time for you to get to the successful results you need.

3. Have you gathered the appropriate funds? You will discover several financing options available to internet entrepreneurs on the web. For a lot of businesses online, gathering the right funds can involve various sources. Bank finance in the form of loan can be cheaper than marketing your shares or equity in your own business. If you are thinking of equity investment, you have two options to select – business angels who are wealthy people looking to invest in successful companies in a budget of $10,000 – $250,000 and venture capitalists who are investors engaged in large capitals ($2,000,000). That is if they see potential profit in 2-3 years on their investment.

4. Have you set up a functional and useful website? You need to build a website where you can completely market your product or service. If building your own website gets a lot difficult for you to do, try to search for web designers online or ask your friends for suggestions. People normally purchase products from the websites they trust and websites that can give them what they need.

5. Have you developed the proper marketing strategies? Come up with a product but don’t expect orders to come racing in. Customers have to find you and you have to get to them smartly. Sites such as Google AdWords can be an effective way of advertising your product and services. This method often works on a “pay-per-click” basis which would only work when someone clicks on your website.

Remember to start small and practice patience. As an online entrepreneur, you need to posses enthusiasm, passion, energy and determination. How to run an internet business demands that you don’t give up and wait for it to expand in time.

Managing Your Financial Risks, Business Loans

A business loan is probably one of the larger financial exposures that you can take on in any business, as this has the potential to ruin your business completely if not properly managed. A further complication with small businesses especially is that in most cases financial institution would not be willing to offer you a loan, without your personal surety for this loan. This means that they can come after you personally for business debts incurred.

So when deciding to incur a debt in the form of a loan, it is very important that you again have a proper plan for how you will be spending the money you are receiving. And of course using the funds for purchases that offer some security (e.g. property and inventory) will significant reduce your overall business and personal exposure. And unless an office upgrade is essential for your business success, or you are sure you can really afford it, do not get a loan for it.

Another important consideration, that could prove invaluable, is that you should only incur a debt that you already have the means to service before you secure it. This will then enable you to maintain the financial integrity of your business, irrespective of the success of the fund allocation for generating a return. And though this is not always possible and in some cases the loan may immediately start generating income (e.g a building that already has tenants), it could prove hugely advantageous to your financial security. Essentially making sure you can afford to pay the monthly installments irrespective of whether the loan generates a return or not, will definitely significantly mitigate your risks.

A very important aspect of managing personal exposure from business debt is to attempt to build a decent company credit rating as soon as possible. This would typically require you have some business credit cards, overdraft facilities (even if you do not use them), and possibly some accounts like telephone an internet accounts to help you establish this record. The better the company record is the more likely you are able to secure debt in the name of the company without having to put your personal wellbeing on the line.

Another benefit of building a good company credit rating is that the interest rates you are likely to pay, for any future credit that you may need, will prove lower. Better credit rating inevitably equals better interest rates as a rule, and though in the short term this may not have a significant impact, it does make a difference which increases over time.

A last consideration when deciding on securing a loan is whether or not your interests will be better served by selling equity in your company, rather than take a loan. Personally this is not an option I am willing to consider lightly, however it does offer a low risk means of financing and eliminates the need to service the debt on a regular basis. On the flipside you do end up giving away a share of your company and profits, which in the long run may prove considerably more expensive.

In conclusion I would suggest that any consideration of incurring debt in the form of a loan should be very carefully considered, as this is a form of financing that has significant potential to cause harm. In fact if you can avoid it altogether, it is probably better. Though admittedly there are cases where building a business with loans can prove a very viable and feasible option. So if this is an option for you, just be sure to do with caution and care.

I wish you all the best with your ventures and invite you to share your comments and stories here.

Cheers!

Getting Familiar With Business Succession Planning

One of the most important elements of business succession planning is to designate a successor. This individual must be trained in all facets of business operations and have a comprehensive understanding of the owner’s role.

The ideal scenario is to develop business succession plans at the time the company is created. Doing so provides owners with adequate time to create plans for multiple scenarios and train successors in their duties.

While there are many reasons to implement a succession plan, the top reasons include:

• Providing liquid assets to owners
• Maintaining continuity of the business
• Establishing equal distribution of company assets to family members
• Reducing the financial burden of transfer taxes
• Identifying a successor to assume duties when the owner retires, passes away, or becomes incapacitated

Major corporate entities also establish contingency plans to ensure business operations continue regardless of what occurs. Just as CEOs appoint successors to take over in their absence, small business owners need to the same.

The same holds true for family owned entities. It is not uncommon for family feuds to erupt when tragedy strikes. To minimize risks of disputes it is imperative to put together a succession plan and establish estate planning strategies to protect assets and pass along the company to heirs.

Business owners ought to hire an experienced appraiser to obtain current value of business assets, account receivables, purchase orders, and stock shares.

Obtaining accurate values is needed to ensure adequate life insurance is purchased for owners and partners. Market values also provide owners with a fair market assessment that is needed when the company is sold or transferred.

When business owners neglect to establish a business succession plan they will be unprepared if emergency situations arise. Nearly every state has strict guidelines regarding when and how other people can take control of a company or assume important duties to keep a business afloat if anything happens to owners.

Establishing a succession plan is not a difficult task, but will require making wise choices. The sort of planning needed depends upon a variety of factors and the overall needs of the company.

Another important consideration is compliance with probate laws. Most often, business proprietors need to work with an experienced estate planner to establish trusts and power of attorney privileges. Family owned companies will need to take additional steps to preserve their legacy and pass along company assets.

Creating power of attorney forms is a vital step of protecting company assets. This legal document appoints an attorney in fact to perform a variety of duties on behalf of owners. As an example, power of attorney can authorize agents to take control of corporate finances or engage in the sale, purchase or transfer of company assets.

Regardless if successors are family members, senior management, or others outside of the company, putting together a business succession plan ensures that the company will continue operating regardless of extenuating events.