Description
final project
Introduction:
Information technology consulting (also called IT consulting, computer consultancy, computing consultancy, technology consulting business and technology services or IT advisory) is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. In addition to providing advice, IT consultancies often estimate, manage, implement, deploy, and administer IT systems on businesses' behalf, known as Outsourcing. The IT consulting industry can be viewed as a Four-tier system: • • • Professional services firms which maintain large professional workforces and command high bill rates. Staffing firms, which place technologists with businesses on a temporary basis, typically in response to employee absences, temporary skill shortages and technical projects. [Independent consultant]s, who are self-employed or who function as employees of staffing firms (for US tax purposes, employed on "W-2"), or as independent contractors in their own right (for US tax purposes, on "1099"). [Information Technology security consultant]s To gain external, objective advice and recommendations To gain access to the consultants' specialized expertise Temporary help during a one-time project where the hiring of a permanent employee is not required or necessary To outsource all or part of the IT services from a specific company Focus on the relationship: Understanding the personality and expectations of client, client organization and all other stakeholders Clearly defined role: Defined roles and responsibilities for both clients, other stakeholders and consulting team Visualize success: Helping the client see the end at the beginning You advise, they decide: Client is the best person to decide
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There are different reasons why consultants are called in:
The four basic principles of IT consulting are:
Once a business owner defined the needs to take a business to the next level, a decision maker will define a scope, cost and a time-frame of the project. The role of the IT consultancy company is to support and nurture the company from the very beginning of the project till the end, and deliver the project not only in the scope, time and cost but also with complete customer satisfaction.
Project scoping and planning
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The usual problem is that a business owner doesn't know the detail of what the project is going to deliver until it starts the process. In many cases, the incremental effort in some projects can lead to significant financial loss. Business process and system design The scope of a project is linked intimately to the proposed business processes and systems that the project is going to deliver. Regardless of whether the project is to launch a new product range or discontinue unprofitable parts of the business, the change will have some impact on business processes and systems. The documentation of your business processes and system requirements are as fundamental to project scoping as an architects plans would be to the costing and scoping of the construction of a building. Project management support The most successful business projects are always those that are driven by an employee who has the authority, vision and influence to drive the required changes in a business. It is highly unlikely that a business owner (decision maker or similar) will realize the changes unless one has one of these people in the employment. However, the project leadership role typically requires significant experience and skills which are not usually found within a company focused on dayto-day operations. Due to this requirement within more significant business change projects/programs, outside expertise is often sought from firms which can bring this specific skill set to the company. An IT consultant needs to possess the following skills: • • • • • • • • Advisory skills Technical skills Business skills Communication skills Management skills Advisory language skills Business and management language skills Technical language skills
Under normal circumstances a fee for IT consulting is measured on a per day, per consultant basis. There is however an alternative option; fixed fee IT consulting. A fixed fee IT consulting contract applies only to projects which are well defined, for example: • • • • Infrastructure refreshment projects Network design Implementation of specific well described features, such as monitoring platforms Infrastructure capacity planning
Generally, fixed fee IT consulting is for a specific amount of work, within a defined timeframe.
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Many companies are now moving towards a fixed priced IT consulting model. This trend is expected to continue as more companies now require delivery of IT Consulting services within a defined time and price structure. Open ended consultancy models generally favour the consulting firm, as the consultancy firm is rewarded on a per day basis, there is no incentive to complete assignments within a fixed time. The result often being risk of project and cost overrun. There is a relatively unclear line between management consulting and IT consulting. There are sometimes overlaps between the two fields, but IT consultants often have degrees in computer science, electronics, technology, or management information systems while management consultants often have degrees in accounting, economics, Industrial Engineering, finance, or a generalized MBA (Masters in Business Administration). According to the Institute for Partner Education & Development, IT consultants' revenues come predominantly from design and planning based consulting with a mixture of IT and business consulting. This is different from a systems integrator in that you do not normally take title to product. Their value comes from their ability to integrate and support technologies as well as determining product and brands.
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Literature Review:
Microsoft the best example for Entrepreneur
A year in review of the information technology industry is presented. No matter what, 1996 will always be remembered as the year of the channel. In November 1995, IBM Corp. announced plans to completely overhaul the company's PC and channel business plans to work more closely with the channel to capture service revenue. In December 1995, Microsoft unveiled a sweeping online strategy that made Office, Windows 95 and Windows NT front ends to the World Wide Web. In addition, the company released a middleware specification called DocObjects that allowed 3rd-party applications to act as front ends to the Web. The new year was ushered in with Intelligent Electronics Inc. revealing plans to make major changes to its business model and management structure in what was yet another attempt to win back reseller loyalty and return the master reseller to the front of the channel playing field. In February 1996, Microsoft Corp. was turning up the heat in its Internet bid, negotiating deals with virtually all major telecommunications and cable companies to broaden distribution for its Internet and networking products.
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Infosys has reason to remember Nordstrom fondly
Mr. Murthy is employee # 4, not employee number # 1 at Infosys. Although he resigned on December 29, 1980, the day he decided to start Infosys, Murthy did not join Infosys, which was incorporated on July 2, 1981, until 18, March 1982. He had promised Ashok Patni that he would complete two projects and it took him that long to do that. "I must have served the longest notice period in the history of corporate India," laughs Murthy. P.S: N.S. Raghavan was employee # 1
Infosys has reason to remember Nordstrom fondly: the retailer agreed to what was then a record billing-rate. The first major customer Infosys signed on after refusing the GE business was Nordstrom, and at a far higher billing-rate. Not surprisingly, one of Nordstrom's senior executives was a honoured guest when Infosys showcased its Electronics City campus to the world in 1994. One individual present on the occasion remembers that the CEO of a large rival software firm based in Bangalore and his deputy were keen to meet with the man, but that Phaneesh Murthy, the man who had signed the deal for Infosys, kept them at bay.
Most people in Infosys saw Phaneesh as Murthy's successor in the late 1990s and the early 2000s. Murthy, most Infoscions (as employees are known; former employees are called Exfoscions) admit, was inordinately fond of [Mohandas Pai] and Phaneesh simply because he thought their performance extraordinary. Given Phaneesh's age (he is now 44) and his profile (he was head of sales and was responsible for helping the company grow from a $10 million one to a $700 million one between 1992 and 2002) most people within the company saw him as Murthy's successor. Then, the sexual harassment suit (circa 2002, when a former Infosys employee in the us, Reka Maximovitch, alleged that she had been harassed by Phaneesh) happened, and Phaneesh had to leave the company.
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Mphasis is good example of how to lead under very difficult circumstances. : 14 Apr 2012. (ET)
The man NR Narayana Murty (they are related) calls 'the smartest person of the Nagavara clan,' chats with CD about entrepreneurship, history, religion and of course, poetry. Why do you advise students to read Shakespeare instead of management books? Because Henry V is a very good example of how to lead under very difficult circumstances.
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Genpact is clearly at the head of the pack: May 7, 2006 (Business Today)
GECIS had grown at a CAGR (Compounded Annual Growth Rate) of 10,000 per cent over seven years, but [Pramod Bhasin] wanted more. "I thought that if we could do this for GE, the toughest client in the world, we would be able to do it for others too." Around the same time GE realised that India, to it, had finally made the shift from being a resource-centre to being an attractive market. "GE understood that a BPO business wasn't its core competence," says Victor Martinez-Angles, Senior Vice President, and Commercial Leader, Genpact, and then part of business development and mergers & acquisitions team at GE Corporate, adding that the company did express some anxiety over losing control of one of its fastest growing businesses. GE also believes in driving a hard bargain with its vendors-as several of India's it services firms will affirm-and the fact that there isn't much to be gained in bargaining with oneself may have also prompted the company's decision to sell a majority 60 per cent stake in GECIS to two private equity firms, General Atlantic Partners and Oak Hill Capital Partners. "GECIS had a seasoned management team at the helm and a mature product offering," says Abhay Havaldar, Partner, General Atlantic. "We saw a huge opportunity for its business model." In December 2004, GECIS formally became a third-party vendor and in September 2005, the company was christened Genpact and although one of Bhasin's journeys was now over, another had just begun.
Before it can drive the change that Tiger speaks of, and to reach the revenue-milestones it has set for itself, though, Genpact will have to address several challenges, some unique to it, others common to the entire industry. "Genpact will have to first reduce its business dependence on GE," says [AccessIntellect]'s Roy. Bhasin is aware of the need to do so. "We aim to reduce GE's (the business Genpact derives from GE) share in total revenues to 50 per cent by 2008," he says. "It is already down to 85 per cent in 2005 from 94 per cent in 2004." The company hopes to achieve this by winning new customers and acquiring companies that could bring in non-GE revenues. In late-March, Genpact and NDTV announced a joint venture that would provide media process outsourcing services such as editing, captioning, indexing, and digitising analogue content. With the global media and entertainment industry worth an estimated $150 billion (Rs 675,000 crore), the joint venture is looking a huge opportunity in the eye. "It is an exciting new field to explore and potentially a business as large as the software business is in India today," says Prannoy Roy, Chairman, NDTV.
The process of building Genpact's non-GE business began a year before its separation from GE (Anju Talwar, the company's Senior Vice President who heads the non-GE operations was asked to consolidate these in early 2004 itself; subsequently, Tyagarajan has been asked to scout for more). Today, Genpact boasts 80 customers other than GE; 40 of these came through the acquisition of New Jersey-based Creditek, 15 from the acquisition of a GE unit in Mexico and 25
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were new wins. One such was a deal with the us-based financial services provider Wachovia, which also saw the company pick up a 7 per cent stake in Genpact (from GE whose stake is now down to 33 per cent). And on the acquisitions front, it is targeting two to three companies with an offshore business model and between $100 million and $200 million in revenues (existing valuations in India should make Genpact itself a not-very-affordable acquisition for large global it services firms that are on the hunt in India, although, as is the case with such things, one can never tell). "We have enough cash reserves (to fund these acquisitions)," says CFO [Vivek Gour]. "We don't need to raise money through an initial public offering." Not that raising money from an IPO would be difficult. "A BPO firm is evaluated on the basis of its pre-tax (and interest) margins, the number of contracts on its books, customer-commitment, and the inflationsharing equation between company and customer," explains a Delhi-based equity analyst. With estimated net profit margins of between 15 per cent and 18 per cent as compared to between 10 per cent and 15 per cent for the industry, Genpact is clearly at the head of the pack.
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Apple inc start up history: July 26, 2011 (Apple Lover)
Exactly, many of us had known about apple product but I realize not at all of apple user knowing the history of its company. Steve Jobs and Steve Wozniak were friends and both are interested in electronics. Wozniak design the computer to chat some time when, in 1976, he designed what would become the Apple I. Jobs, who had an eye for the future, insisted that he and Wozniak to try to sell the machine, and April 1, 1976, Apple Computer was born. Apple was founded by Steve Jobs, Steve Wozniak and Ronald Wayne to sell the Apple I personal computer kit. Wayne has sold part of Jobs and Wozniak in the early history of the company. Apple Inc. is the largest technology company in the world and the second largest company by market capitalization. Apple designs and manufactures computer hardware, software and other electronic products, including iPod, iPhone and iPad. The company is innovative and set industry standards for personal computers since the beginning. Later PowerBooks began with the introduction have set the standard for laptops. Today, with their computers, laptops and other devices like the iPod success, iPhone and iPad they are a force to reckon with. In May 2010, the market capitalization of Apple closed the day at 222.12 billion dollars is ahead of its rival Microsoft from Apple Corp. has reached a record $ 330.26 in 2011 the first regular session negotiation.
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Intel was distinguished by its ability to make semiconductors :
At its founding, Intel was distinguished by its ability to make semiconductors. Its first product, in 1969, was the 3101 Schottky TTL bipolar 64-bit static random-access memory (SRAM), which was nearly twice as fast as earlier Schottky diode implementations by Fairchild and the Electrotechnical Laboratory in Tsukuba, Japan. That same year Intel also produced the 3301 Schottky bipolar 1024-bit read-only memory (ROM) and the first commercial metal–oxide– semiconductor field-effect transistor (MOSFET) silicon gate SRAM chip, the 256-bit 1101. Intel's business grew during the 1970s as it expanded and improved its manufacturing processes and produced a wider range of products, still dominated by various memory devices. Federico Faggin, the designer of Intel 4004. While Intel created the first commercially available microprocessor (Intel 4004) in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random-access memory chips. However, increased competition from Japanese semiconductor manufacturers had, by 1983, dramatically reduced the profitability of this market, and the sudden success of the IBM personal computer convinced then-CEO Andrew Grove to shift the company's focus to microprocessors, and to change fundamental aspects of that business model.
By the end of the 1980s this decision had proven successful. Buoyed by its fortuitous position as microprocessor supplier to IBM and IBM's competitors within the rapidly growing personal computer market, Intel embarked on a 10-year period of unprecedented growth as the primary (and most profitable) hardware supplier to the PC industry. By launching its Intel Inside marketing campaign in 1991, Intel was able to associate brand loyalty with consumer selection, so that by the end of the 1990s, its line of Pentium processors had become a household name.
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Introduction & Company Profile
AWB (Apna Website Bana) : Apna Website Bana.com Was Founded on 29th October, 2012. AWB Basically an IT Consultant mostly provides services on Website Development, SEO, Blog, WordPress Setup, Software Development, E-commerce Website, Domain And Web hosting Services. ? Objective :
Design priorities do vary. For example some sites focus on service, other sites focus on sales. Clarifying the key objectives, purpose or priorities helps to determine the content and structure of the site. ? Mission :
To enhancing the business growth of our customers with creative Design and Development to deliver market-defining high-quality solutions that create value and consistent competitive advantage for our clients around the world. ? Vision :
To become a prime performer, in providing quality Web, Print and Software solutions in the competitive global market place. ? Commitment :
We take pride in our on time delivery and ability to meet quick turn around requests while exceeding customer quality demands. Customer Satisfaction continues to be of utmost importance to CWS, as do Consistent quality, Constant innovation, Technology enhancement, Process improvement and Customer orientation. We have developed our core competence and aligning objectives at all levels so as to realize synergy in operations. It is our collaborative approach, creative input, and emphasis on economical solutions that has allowed us to develop an impressive and diverse client list.
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What It Takes To Start a Business - Starting A New Business
Many people may enjoy the notion of starting their own business because of the lure of generating immediate profits for their innovative inventions and ideas. However, it takes more than just having an idea of a establishing a startup that will lead to a company’s success. There is a considerable amount of planning that needs to take place prior to the launch of a company in addition to personal and financial dedication. Despite the fact that the majority of startups will eventually fail in their first year, many of these failures can be prevented if entrepreneurs’ simply took the needed time to properly assess if they have what it takes to run their own company. Industry experience One question forthcoming enterprise founders should ask themselves is whether or not they are fully capable of starting their own business. The idea of a startup may seem like an alluring prospect, but without familiarity and understanding of the industry, entrepreneurs may experience a difficult time in sustaining their company’s success. The imperative qualification of industry experience should not be overlooked because it may mean potential failure in the end. Lack of experience does not necessarily mean that entrepreneurs should not start a business; however, they should wait until they have developed considerable knowledge in the field. They can accomplish this by talking to other business owners within the same industry who can give practical advice about startup costs, revenue projections, expertise in running a company, and other additional company expenses. A prospective entrepreneur should also conduct independent research regarding competitors as well as find out which sorts of businesses are needed within their community. Risky business Many entrepreneurs will agree that starting a small business is a risky endeavor. Not only should ample time and energy be invested during a company’s preliminary stages but company founders should also be aware that their reputation may be jeopardized if their business fails. In addition, if a company is not successful as anticipated, there may be a strong possibility that business owners may have to resort to closing or bankruptcy and lose much of their invested wealth. The first few years of a company is considered to be a very crucial time for entrepreneurs since their startup’s fate is unexpected. It is important that an individual evaluate the different risks involved when considering entrepreneurship. If they do not feel comfortable with taking these risks, then perhaps they may need to reconsider whether starting a small enterprise is suitable for them. For more information about the Pros and Cons of Angel Investing, please refer to our related articles section of Angel Investing. Be ready to be the boss Many first-time entrepreneurs will agree that the reality of running a small business is very different than what they had initially expected. Some business owners may have the misconception that once they launch their businesses, they will be able to finally have more available free time and can live a comfortable, stress-free lifestyle; however, this is not completely true. A significant part of owning a company and becoming your own boss includes an undeniable amount of sacrifice, where much arduous effort and comprehensive hours of labor is required. Many business owners may not be prepared for these daily challenges and may lack
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the necessary personal drive and motivation to manage their employees, deal with customers, or even run a whole company. Forthcoming entrepreneurs are encouraged to actively solicit the opinions of others to find out if they are completely capable of being their own boss and running a company. The pooled opinions may vary, and at times, be painful to accept; however, it is always a good practice to obtain constructive criticism from others before making the crucial decision to start a business. Family support Starting a small enterprise and managing family life are considered to be both demanding, fulltime responsibilities. Both commitments encompass the sacrifice of time, effort, and finances to properly sustain. These can be quite difficult tasks for the entrepreneur to properly balance and for their family members to fully accept. Family members of business owners should be prepared for all the daunting challenges associated with a startup, including the demanding schedule of their loved one. It is a proven fact that entrepreneurship can be mentally, physically, and financially draining. Family members should offer their loved ones understanding and emotional support, especially during the preliminary years of the company launch. Genuine enthusiasm and creativity Many people become inclined to start a business simply for the financial return. On the other hand, there are entrepreneurs who have the tendency to see beyond this monetary gain, are clearly very enthusiastic about entrepreneurship, and confident that their products and services are what people want. In addition, this latter group of entrepreneurs tends to have a relentless inherent sentiment that once their unique ideas are marketed, these innovations can clearly improve one’s quality of life. This unwavering optimism and passion for their company is the driving force behind their solid success. For more information about Winning Entrepreneur Characteristics, please refer to our related articles section. Once an entrepreneur has evaluated they have what it takes to start a company, they can now follow a few steps to launch a successful business.
1. Visualization and research of product, service, and market
The initial step to a successful business involves the company owner’s work in preparing and improving the products and services that will be offered to paid customers. Prospective entrepreneurs must first decide on the type of business they are interested in starting. They must then use those ideas along with their personal and professional experiences into envisioning and creating goods that will greatly attract a consumer base. The design and innovation of such products often entails extensive research of competitors and prospective consumers in the targeted markets. Once the products/services are determined, a product prospectus should be written, documenting how each of the products/services are prepared, used, and its competitive edge.
2. Preparation of a marketing strategy and well-written business plan
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Once entrepreneurs establish enough knowledge about their target markets and have implemented their active concepts into reality, they are now ready to market their goods and ideas. This often entails devising a marketing strategy which is successfully accomplished by paid professional assistance and/or experimental presentations to attract a consumer base. A detailed business plan is also needed for any business, regardless of the size of the company, which documents the company’s objectives, their goods/services offered, startup costs, and the targeted market and customers. Every business plan varies, and the Small Business Administration (along with other private companies) may be able to offer paid technical and practical advice in creating a business plan tailored to a company’s needs.
3. Seeking professional assistance
Government agencies can offer company owners much needed expert and friendly advice on starting a business. In addition, lawyers and accountants can provide entrepreneurs with valuable information concerning government rules, regulations, zoning, and other legal issues. Many of these professionals can also critique proposed business plans and assist in determining which legal form is most suitable for their company (i.e. partnership, proprietorship, corporation, etc.).
4. Sources of capital
The final step in starting a business entails obtaining the necessary funding to sustain a company’s survival. Some sources include the use of personal savings, angel, (for more information about angel investors, please refer to our related articles section) and venture capitalist financing, borrowed money from business associates, private loans, and family and friends. The process of obtaining funding may be time consuming and frustrating; however, it is important to stay motivated until the desired capital is raised. While many people can envision the idea of owning their own business, some do not have what it takes to start and successfully sustain a company. Most small enterprise failures can easily be avoided if business owners would simply be aware of the challenges that lie ahead and evaluate within themselves if they are fully prepared to start their own business. Once they are able to determine that they are capable, they can then take the necessary steps needed for startup success.
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Public Relations Campaign to Help Improve a New Business
A poor marketing strategy is one of the leading reasons why most businesses fail. It is no wonder that many new enterprises resort to establishing a strong public relations campaign in order to actively advertise and promote their businesses. Public relations are a vital necessity for a company’s success. Without it, entrepreneurs have no outlet to effectively sell their products and services. Public relations can encompass many different channels, including print and broadcasting media as well as in-store promotional offers. Depending on the type of business, the entrepreneur can decide which public relations outlet will be most useful in establishing the company’s success. Here are a few steps entrepreneurs should follow in order to determine the most efficient manner to promote their company. 1. Define your audience Every public relations campaign for a new business should first develop a good idea of who their target audience will be. Depending on their products and services, a company can tailor their marketing approach according to the demographical information of their prospective customers. For example, a children’s clothing store can easily target grade school children (ages 8-12) by selling the latest school fashions and accessories. Their newspaper and television ads can primarily focus on contemporary casual school wear with a friendly “back-to-school” theme. 2. Define your competition The next important step is to identify the competition. Every business has competitors, and it is extremely important for new business owners to thoroughly study their opposition so they can work aggressively to “outdo” them. Such information can be obtained by visiting their opponent’s websites and by studying their different marketing materials and pricings. For example, a car wash that is located two blocks away offers new customers 15% off their deluxe wash. Entrepreneurs can have a competitive edge by offering their existing customers 20% off as an incentive to stay loyal, and they can recruit new customers by advertising large posters at local gas stations. 3. Determine your advertising budget After identifying the target audience and any major competitors, entrepreneurs are now faced with determining the most effective way to publicize their business. Advertising a new business is not a cheap endeavor. The entrepreneur should establish how aggressive their approach will be in winning over potential customers and how much they can afford to pay for their marketing strategy. For example, if an entrepreneur of a small flower shop can only afford to use print media, they can use their advertising budget towards posters and fliers that can be distributed locally and then use a portion of the budget towards newspaper and magazine ads. If one large ad is too expensive, they may opt to place smaller ads in newspapers and magazines more frequently. 4. Self vs. hired professionals Once an advertising budget is determined, the entrepreneur can now decide whether they will need the help of a public relations specialist to promote their company. There are many
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“cheaper” alternatives rather than hiring a public relations specialist, including the use of newspaper advertisements, posters, direct-mail notices, blogs, etc. to lure prospective customers. On the other hand, a skilled public relations specialist can easily provide more aggressive methods of publicity. Since they will most likely have proven experience in the given field of industry, they can effectively convey accurate information to the target audience through more outlets, including local and national television commercials, in-store item positioning and sales, and various packaging styles and techniques in order to gain new and repeated customers. A public relations firm can also help devise many suitable topics for public relation statements, including announcements, communicating a change, stating an opinion, or revealing a finding. The following ideas can be used to develop effective public relations for a new business: 1. Media outlets There are different kinds of media outlets which business owners depend on to promote their enterprises. Print media refers to any image or text that can be produced on paper or on objects. Posters, brochures, catalogs, daily newspapers, business journals, fliers, and newsletters are some forms of print media. It can also comprise of billboard advertisements and items which contain company letterhead and promotions (i.e. pens, key chains, etc.). For example, a jewelry store can rent billboard space and place their billboard advertisements along busy highways to lure customers, while a local bank can advertise their grand-opening on promotional key chains and pens. Common broadcasting media include television and radio markets. It is common for many businesses, small or large, to resort to this form of public relations since it provides a fast and efficient method to gain local, regional, and national recognition. Entrepreneurs also like to use this broadcasting approach since it repeatedly reminds listeners of any grand openings or upcoming sales during their normally scheduled television viewing and radio listening times. For example, a department store can choose to advertise their television commercial during the evening news. Throughout that timeslot, many people who are watching the news can also be aware of any sales and in-store promotions the department store chooses to broadcast at that time. 2. Bartering or trade-out Another successful method of public relations for a new business is the use of bartering. When a company practices bartering (trade-out), they simply exchange their products and services for free radio airtime. Many radio stations benefit from bartering since the products and services can be used for their on-air contest prizes. In the same respect, companies can use this trade-out as a platform to aggressively advertise their company. For example, when a local fitness center barters with a radio station, they can exchange several free three-month memberships to their gyms for every 5 commercials that the radio station plays. Bartering is certainly an effective means of advertising for both parties involved. 3. Get the management team involved A company’s management team can play a very vital role in the success of a business. They, too, should be part of a company’s public relations campaign. Entrepreneurs are encouraged to
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inform their management team of the progress of their company’s sales and even get them involved when brainstorming different ideas to increase overall transactions of their offered products and services. The management team can greet customers when they enter the store and inform them of any free trial periods currently offered. Management can even pass out different sample products in the storefront in order to entice potential customers. A perfect example of the management approach to marketing can be found in any local mall. On a typical weekend, one may discover that their local mall ice cream shop has a new flavor. To promote this new ice cream flavor, the company’s staff members can simply offer free edible samples to different people passing by and even give discounts to those who purchase a cone or sundae of the new flavor. 4. Network through existing customers Existing customers serve as an essential component for a company’s success. If a customer is pleased with the products and services offered, they can simply converse with others about their delight in a company. This positive word of mouth is transferable and a good way to gain prospective customers. Companies can also offer their existing customers promotions or rewards for helping them recruit new patrons to their business. For example, a residential management team can offer monthly rent discounts to new tenants who agree to sign a one year lease with them. Not only do the new residents save money, but existing customers who refer family members and friends can also receive continual rent discounts. 5. Always position yourself as an expert Customers always feel a degree of satisfaction and comfort in knowing their inquiries were addressed by an expert. Therefore, it is vital for business owners, their management team, and staff to establish themselves as specialists in their chosen field. They should know everything about their products and services and be ready to answer even the most detailed inquiry with confidence. For example, a college-aged, health conscious customer went to three different health food stores looking for a particular grain that is high in protein and fiber (called quinoa). In all three stores, the staff had no idea what she was referring to or had never heard of the word before. Discouraged, she went to a final location to find this product. She was amazed to learn from the sales clerk that not only did they carry this product, but that he was also able to provide background information about the product and of the different varieties available. This customer was so pleased by her encounter that she not only referred her friends to shop at this store but she also remained a loyal repeat customer for many years. 6. Website development Another way new businesses can gain customers is through the use of their website. A professional-looking, user-friendly company website can have a competitive edge among others since many people enjoy the convenience of shopping online. Many companies can further raise their profile by employing the help of a professional webmaster for search engine optimization and affiliate posting to increase the flow of online traffic to their company website. For example, if someone is looking to buy fine silverware and dishware, they can simply type “fine silverware and china” during a web search and will instantly find sites that exclusively sell these products. In addition, there is great marketing value when a company decides to post their advertisements on affiliate sites and vice versa. By linking different sponsors and associates on a company’s
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website, entrepreneurs can easily raise their recognition since they can be listed on many different sites. 7. Community involvement and public speaking A new company can boost their profile by participating in several non-profit organizations and community-related services. First, a business owner should identify some local causes they may find worthwhile and promote their business in the process. For example, the owner of a trendy women’s boutique can decide to become involved in breast cancer awareness and research. Through active participation of high-profile community marathons, bake sales, and events, the entrepreneur can gain recognition, especially if they advertise they are a sponsor. In the same respect, the entrepreneur can also speak out during public events about breast cancer awareness as well as donate a portion of any item that was bought in their boutique towards breast cancer research. This type of public relations can be beneficial for both parties since community involvement was an effective way to raise money and awareness for the company and for cancer research. Public relations are extremely important for a company’s success. They can include everything from networking through existing customers to active participation of community-related activities as well as targeting the assistance of television and radio to advertise their company. If a company decides that the broadcast media is the most effective outlet to improve their business, they can write a press release to a local newspaper to make an announcement. They can also seek the assistance of a public relations firm who can conjure different topics for all public relations statements. If done properly, a public relations campaign can add to the popularity, profitability, and trustworthiness of a new business.
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Small Business Funding Myths - Starting A New Business
There exist many misconceptions regarding funding for small businesses. Some prospective business owners may believe that obtaining necessary capital for their is an easy and straightforward task, when, in fact, the process may be more complicated than initially anticipated. For example, many business owners may feel the need not to implement an effective marketing strategy or prepare a well-devised business plan, which can often greatly contribute to a company’s failure. Furthermore, there is an erroneous belief that the U.S. government can offer financial assistance to those who apply and that entrepreneurs can increase their chances of acquiring angel capital if they actively solicit the help from numerous contacts. The realities of many common myths are explained below. An individual considering the prospect of entrepreneurship should be aware that it takes time to evaluate the different options in order to obtain funding and that they may even experience repeated rejections before the needed capital is raised. Myth No. 1- "I can easily find funding for my new business in a few months." The Truth- Obtainingstart-up funding is a long and tedious process that can actually take years to achieve. A wise entrepreneur is one who acknowledges this extensive process yet is patient and seeks all means to accomplish this goal. First, these entrepreneurs take time out to meticulously research prospective investors with experience in their field of industry. In the course of this process, they may be rejected multiple times; however, they still find time to optimize their resources by networking extensively with others. They also use their rejections as a means to refine their elevator pitch and devise a well-detailed business plan. Most investors will not even consider providing necessary funding for a venture unless the entrepreneur has demonstrated such preparation. Their invested company’s products and services must also prove to be successful in trial marketing, which may also take a considerable amount of time to execute. In addition, entrepreneurs must establish that they have exhausted all other financial opportunities to launch their business. Along with the due diligence process, which can take months to achieve, it may be several years until the entrepreneur is able to obtain desired funding. Myth No. 2- "My business idea is great and unique. I should get funding right away.” The Truth- Often times, entrepreneurs are overconfident about their business ideas and innovations. Just because they feel that their products or services are marketable does not mean that their ideas are good enough for investors or the general public. Every year, thousands of people truly believe that their inventions will be the next "million dollar” idea, when, in fact, the majority of these ideas will lead to many disappointments. Many business ideas will simply not survive in the market due to the competition among major competitors and the development of further well-devised products. That is why entrepreneurs need to research and refine their ideas, which takes much needed planning. In fact, an invention should be test marketed after establishing such preparation in order to get ample feedback from customers. An invention is considered "fundable” when a test model (pilot model) can prove that consumers will be willing to pay for the product(s). This will not only show investors that the company has the potential for
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producing a large return on investment, but it also gives time to polish any flaws before mass production of a product takes place. Myth No. 3- "I know everything about my business; therefore, I do not need to create a business plan.” The Truth- According to the United States’ Small Business Administration (SBA), approximately 90% of all small businesses fail within the first two years of operation. It is also striking to note that the majority of these companies have no business plan. If a business plan exists, it may not be updated or the company may even fail to comply with their existing plan. This is why most successful entrepreneurs agree that the key to sustaining a startup is by creating and enforcing an effective business plan. Most prospective investors will not consider investing in a company without a business plan, which primarily focuses on daily company operations, the management team and employees, finances, etc. Business owners and employees are encouraged to follow their business plan and update it accordingly throughout the development of their company. Myth No. 4- "I know how to market my products; therefore, I do not need a marketing plan.” The Truth- A marketing plan is a written document that details the advertising objectives of a company. It documents a business’ marketing approach and expenditures in promoting their company, brand, or company’s product line. Many startups depend on their marketing plan to gain publicity and to promote newly released products or services. Consumers, on the other hand, are highly influenced to buy products from companies with effective marketing plans and strategies. Hired professionals are known to devise successful marketing plans, which are vital components of a company’s overall investment. Through an effective marketing strategy, plan, and public relations, an enterprise and their product line can gain public recognition, further contributing to their success and profitability. Myth No. 5- "The more investors I contact, the more likely I can find funding.” The Truth- Often times, this myth is accompanied by sending mass e-mails and direct mail to hundreds of investors with the hope of successfully targeting prospective ones. Investors will admit that this is clearly the wrong approach when trying to find investors since mass mailing is considered a waste of money, time, and energy. Investors who grant small business funding should be sought by quality, not quantity. Entrepreneurs are encouraged to thoroughly research several potential investors at a time who have a solid track record of success in their field of industry. Even though there is a high probability of rejection, the entrepreneur should not be discouraged and should continue to research probable investors. Upon this research, each prospective investor should then be sent a personalized request. By sending these custom-made requirements, the entrepreneur will gain credibility from investors, who will recognize them for conducting their own due diligence. Myth No. 6- "I can easily get funding from the SBA.”
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The Truth- This is a very common myth of many entrepreneurs. The fact is that the Small Business Administration (SBA) does not lend money directly to business owners. Instead, they act as a guarantor through local lenders in order to stimulate the economy in many communities by promoting startup growth. A prospective applicant should have a good credit history, proof of income, a solid business plan, and collateral in order to be considered. Even though it is smaller in amount than most banks lend to startups, approval of an SBA loan will increase one’s chance of obtaining additional capital from many lending institutions. Myth No. 7- "I can get government funding for my startup.” The Truth- Most federal grants are available only to medical, scientific, educational, and nonprofit ventures. If a startup does not fall into one of these categories, they will most likely be rejected for their application. Non-profit organizations that do get accepted for government grants are usually related to research or product development. One important fact to mention is that grant funding is usually awarded in small amounts and is not a sufficient source for financing a startup. Businesses that acquire grants often depend on multiple sources of capital, including capital from lending institutions and private investors. It is also a very competitive process to obtain a federal grant since there is only limited funding available. Entrepreneurs who strongly believe that their business falls into the category of receiving government grants should target different organizations and propose a grant request. Myth No. 8- "Venture capitalists will give me money for my startup.” The Truth- Venture capitalists usually invest in companies that are already established, not ones that are in the early stages of development. Due to the fact that venture capitalists pool their money from multiple sources, they are extremely selective with funding applicants, choosing their investments in "safe” companies, ones that have already established a large degree of success. Angel investors, on the other hand, typically invest in startups and early stage ventures, companies that have not yet established any degree of success. They use their own money for funding young companies, making their investments more "risky” than that of venture capitalists. However, they are also selective with their applicants, who need to convince them that their company will produce a large return on investment. Conclusion Many of the common small business myths contain some of the most inaccurate information about funding a startup. Now that these funding myths have been debunked, it is the entrepreneur’s duty to conduct their own ample research in order to learn about the credibility of any given information. In addition, business owners are encouraged to work with skilled professionals with expertise in their field who can create for them practical business and marketing plans so that they can successfully find adequate funding for their venture.
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What does an IT consultant do? There is no legal protection given to the job title IT consultant therefore anyone can wake up one day and start up an IT consultancy business. Unfortunately this means that there is a real spectrum of consultants with a huge range of ability all out there trying to win your business. That said IT consultants do tend to fall into some distinct categories: • The local computer shop. Quite often working out from a local retail store selling computers and peripherals these consultants will supplement their retail income with some “break fix” work or onsite consultancy. They are often very good at mending broken computers, installing basic networking and setting up basic software packages. The cost per day may be from £100 – £250 depending on the work they are doing for you. The one man band. Without retail premises these people rely on advertising in local papers and listings and word of mouth to get their work. They may have a broad set of experience and be able to help you fix a number of problems. They may also offer a technical support service on an annual contract, enabling you to call them up on the phone to help fix an urgent problem. The cost per day is likely to range from £200 - £600, dependent on the work you have agreed with them. The small and medium sized consultancy. Often formed of a group of consultants these people often have more specialised skills grown out of working as an employee for one of the big product manufacturers. For example they may be experts in small business accounts software or specialised CAD (computer aided design) software that you may need to use in your business. Many of these consultancies would be affiliated with one or more of the major vendors and would have undergone training and certification according to some quite rigorous rules. Theses consultants are unlikely to offer more general or ad hoc IT consultancy. Costs per day will be from about £500 - £1500. Large consultancies. There are some consultancies that employ many thousands of consultants and IT engineers, offering everything from hardware supply through to business remodelling. The cost base of these companies is reflected in their daily charges, many with a minimum of £1500 per day for fairly junior staff. Principals and partners can easily be charged out at over £3000 per day. These consultancies are probably not suitable for many small businesses.
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Analysis of sources of finance available for IT Consultancy Feasibility :
Ways to Raise Startup Money 1. Personal savings . There's nothing like having your own money saved, to put into your startup. You have the satisfaction of having saved it on your own, and the knowledge that you don't owe anyone. Risk : It's your money, and if you're not successful, the money is gone, and with it the opportunity to do anything else with it later. 2. Partner savings . Having a partner helps spread out not only the business management but the financial burden. A good partnership is also synergetic, bringing more success than running a business alone. Risk : A fed up partner who wants out; arguments; irresponsible partners who leave you with all the debt; broken friendships. 3. Sell your stuff . Sell anything you haven't used in a year or longer. The same goes for leased items. Risk : Regrets, or worse: going out and spending to replace the item(s) you sold. 4. Windfalls . Invest any tax refunds, gifts, lottery winnings into your business. Risk : Getting hooked on lotteries and gambling to "fund" your dream business. 5. Barter and resell . Consider offering product or services that you can barter in return for something that you can sell for a profit. A very extreme execution of the bartering principle is Kyle MacDonald's One Red Paperclip experiment. He started with a red paper clip, and through a series of swap/ barter transactions, he ended up with a house within a year, and is now trying to trade it, potentially for cash. Risk : One Red Paperclip is a novel approach, though unless you have something well-thought out and as interesting (and you let your personality through), it's hard to do a successful followup
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act. You might find enough people to support you, but you'll need to find them and hopefully they'll know nothing about One Red Paperclip. 6. Retirement savings plan . Dip into your retirement savings, especially if there's a government incentive (i.e., qualified tax break). Or take advantage of home ownership programs from retirement plan funds, and use your original rental funds towards your business. Risk : If you can't pay back your savings plan, there may be a penalty as well as having to declare the funds as earnings. 7. Credit cards . It might be easier to use your lines of credit (which you'll have if you have a good credit score). Risk : Credit card interest rates are almost always higher than that of a bank loan or blood money. (The latter sometimes has no interest rate, but you pay for it in other ways, as indicated above.) 8. Credit card arbitrage . This is an extension of the credit card approach, and uses the "0% balance transfer " options that were so commonplace a few years ago. With the current credit crunch, this may not even be an option. Risk : This is a dangerous way to run a business, but the very disciplined entrepreneur with "sure" income can pull it off. Prior to the current economic crisis, type of card choice would have been the 0% cards. Even before such cards existed, some entrepreneurs have successfully built businesses on multiple credit cards. Others have gone into heavy debt and gone bankrupt. Having a business plan that has been carefully scrutizined can make the difference. 9. Blood money . Borrow from family, friends, colleagues, or employees . An alternative to this is to have one of the aforementioned cosign a bank loan for you. Risk : Meddling lenders, constantly reminding you of what they gave you; ruined friendships. 10. Get a bank loan . If you have a solid business plan and the lender agrees, this can often be the cheapest (interest rate-wise) loan sources available. Risk : Besides the fact that it's often hard for a startup to qualify - since there's little evidence you'll be profitable - if you do get a loan, it can be like a ticking time bomb if your business isn't doing well.
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11. Home equity . If you have equity in your real estate holdings, some lenders will accept that as collateral against a business loan. Alternately, you could refinance your home, taking a mortgage with a lower monthly payment, thus freeing up some funds for business. Risk : You put your home at risk, and potentially your family and marriage, if that applies to you. With refinancing, you end up paying far more interest over the lifetime of your mortgage. 12. Cash out your life insurance policy . This has been a common way for entrepreneurs to fund their startups. Risk : The payout is usually a lot less than the policy is worth. It's not recommended if you have a history of illness because you can't afford to get sick, injured, or worse. 13. Grants . There are often a variety of government grant programs for specific types of startup businesses. for more information, search online on government websites. Unless they're reputable, don't pay money to sites that tell you they'll give you a big list of where you can get grant money. Risk : While grants are rarely required to be paid back, accountability is higher, and you might have to work within a difficult deadline, to show your progress. If you do not achieve the progress you indicated in your proposal, there may be some sort of penalty. 14. Donations via social media . For example, the Tweetsgiving drive via Twitter pulled in over US$10K in just 48 hours, simply from donations of $5 or $10 dollars. This sort of approach works thanks to online payment processing services such as PayPal . Risk : Generally only effective for charity organizations, and not necessarily one that is yet to be established. Requires a large group of followers, or enough "power" accounts in your Six Degrees of Separation chain. 15. Microloans . Kiva , Prosper , etc. These may be relatively small, but if combined with a technique such as bootstrapping (discussed below), might get you through the early stages of your business. If you have a good plan in a potentially lucrative niche, microloans might be easier to get than a bank loan or investment funds. Risk : Everyone knows your business. Or at least more people than you might otherwise want, from the website in question. What's more, the U.S. government has put many microloan sites (e.g., Prosper) on notice to file with the SEC (Securities and Exchange Commission). This might or might not raise transaction fees, or simply limit the pool of funds since they're currently not accepting new lender registrations.
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16. Startup incubator . Business incubators such as YCombinator exist in various industries, but more likely for tech niches than anything else. They tend to be more accepting of a promising idea and a smart entrepreneur. This type of funding is sometimes known as "seed financing." Risk : Their funding offers are typically smaller than from angel investors or VCs. Incubators are sometimes found at university campuses, funded by industry, but less visible to anyone outside of the community. They might fund very fewer projects and with smaller budgets. 17. Investor capital . Get angel investments or venture capital. Convert blood money lenders into investors or silent partners. Or find angel investors, who tend to give smaller loans than VCs (Venture Capitalists). Venture capital is less of an option for most startups, but might come at a later stage. Note that at a later stage, your customers and suppliers could very well be investors. Risk : Not enough money, or difficult repayment terms. Many investors expect to sell the company at some point in the future and cashout. That means offering an IPO, which locks your payout thanks to SEC rules. You also have to be incredibly careful about not falling into insider trading issues. 18. Leasing . Leasing is not so much a way to raise funds as save them, since equipment leasing reduces your initial startup costs over buying outright. Risk : Leasing means having to pay interest, sometimes at high rates. If you run into any cash crunch, it could mean losing equipment that you need to operate, or having to come up with funds to make lease payments. 19. Factoring companies . Factoring companies buy your pending invoices (accounts receivable) and give you cash, minus a transaction fee. Risk : You get paid sooner but you lose profit that might be crucial in the future. 20. Check rediscounting . This is similar to factoring. However, check rediscounters take a postdated check you have written and pay you now, minus a fee. Risk : This is more risky than factoring, since you're make an assumption that you'll have funds in time. If you don't, and if you don't have sufficient bank overdraft protection, then this could spell serious financial problems.
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21. Private offering . Turn your blood money lenders into part owners, so that they have an emotionally vested stake in seeing your business succeed. Risk : You might lose partial control of the business, and if you have to have meetings to make simple decisions, that could hinder your ability to work effectively. 22. Public offering . A public offering widens your potential for selling shares and thus getting operating capital when you need it. Risk : Shareholders expect something in return, whether it's dividend payouts or increase in stock value. There's also the issue of now being bound by all the SEC (Securities and Exchange Commission) rules. 23. Consignment . This isn't so much as a fund source as it is a source of product to earn revenue and then pay "suppliers" after their products sell. Small boutique shops often take this approach, thereby reducing their operating costs to rent, electricity, phone and few other items. Stock costs drop potentially to nil. Risk : If you're not disciplined enough to sell the product, product takes up space and suppliers get upset. 24. Employer intrapreneurship programs . Companies sometimes have programs that allow qualified employees time, resources and even funding to explore a business idea or technology. Risk : You may have to live up to certain milestones or expectations, or will likely have to turn over any inventions/ technology to the company. That is, even if you get credit, you might not be able to profit from your effort. 25. Entrepreneurship programs . This is similar to intrapreneurship programs but is not limited to employees of a company or organization. Risk : Once again, you may have to live up to certain milestones or give up some control in your startup. 26. Online ad revenue . This is an option that has only become available in the last few years. If you have the skills to build, promote and monetize a web site - which you can start for practically nothing - then you might profit either by selling it or using advertising or other revenue (premium content sales, subscription fees, consulting, etc.) to fund your startup.
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Risk : The risks are multifold. First, despite that some website owners earn substantial income from just advertising, that source can drop unexpectedly due to changes in search engine ranking systems. You also have to put in considerable early effort to build a website to a monetizable state. This means less time for you, which might delay the launch of your startup. 27. Freelancing or contracting . You may not be able to hold down a regular job while also running a startup, but part-time freelancing or contract might be an option for producing extra income. Risk : Time spent freelancing or contracting is time that you cannot spend on your startup. 28. Auctioning your name . If you don't like your personal name or are otherwise willing to change it to a company or brand name, you might be able cash in for many thousands of dollars. Risk : Usually the potential of being ridiculed by friends is enough, but part of the deal might mean having to change all your official documents. There could be negative publicity as well. 29. Selling your body . No, not like that. Sell advertising space on your body . Options include wearing signboards, t-shirts with company logos, or temporary or permanent tattoos. A less drastic option is to sell ad space on your car. Risk : Do you really want to be associated with someone else's brand while trying to build your own? If it's a permanent tattoo, don't be surprised if you have regrets in the future. 30. Awards/ competitions . Universities and companies occasionally have business/ entrepreneurial competitions. Risk : The payoff may not be large enough for the effort you put in to win. Some contests may require you to reveal more details than you're comfortable with, or possibly have to give up ownership - depend on sponsor requirements. 31. Dividends . If you have mutual funds or stocks in your investment portfolio that pay out regular dividends, this could be a potential source of startup funds. This way, you do not have to cash in your portfolio, and it can continue to earn for you. Risk : Depending on tax laws in your country, some types of dividends might be taxable at source, if you are not reinvesting them. So your actual "take," minus any brokerage fees might leave you with very little.
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32. Real estate . Sure, the market is a mess right now, but if you have the down payment and will have enough cash flow, consider acquiring some real estate because of all the deals available. Move in to part of the property and rent out a portion. Not only do you build equity, you might even have a positive cash flow to put towards your business. Risk : While a renter's mortgage is often offered at a lower interest rate, you're reliant on tenants for part of your payments. If your tenant moves, there's the time and cost of finding a new one. 33. Bootstrap . When none of the other options are viable or available, bootstrap your success . Put all or most of the profits of your business right back into to it until it becomes self-sustaining. Risk : Bootstrapping can feel like a thankless activity for quite some time. It can break the spirit of some people.
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Options to Look At When Looking For Funding For Your New Business
When an entrepreneur decides to begin the process of starting his/her own business, one of the first steps taken is to look for funding. Creating a new business can be a stressful ordeal; however, raising the necessary business capital is part of this crucial process and one that should be thought about thoroughly before deciding on an option. During the funding search, the entrepreneur will discover that some options are more secure than others. It is important to make sure that the chosen method of securing capital is the most beneficial. Home equity loans One way in which an entrepreneur can raise capital for their new business is through a home equity loan (HEL). Some conditions must be met in order to qualify for an HEL. For example, the borrower must have collateral in order to secure a loan, a solid credit and cash flow history, and positive financial projections for the new business, amongst other requirements. In a home equity loan, the borrower uses the equity in their home in exchange for a secured loan plus interest. When a borrower fails to repay the loan amount with its accrued interest rates, the ownership of the property gets automatically transferred to the financial institution that provided the loan. Qualified applicants can usually obtain the money immediately; however, home equity loans can be very risky, especially for new businesses. If a new business does not perform well, then the borrower will be at risk for losing both their business and home. In addition, lack of repayment will eventually lead to a poor credit rating, which is often difficult to repair, especially if a borrower defaults on his/her loan. Insurance policy loans Many people with life insurance policies have a cash value to their plan. Often times, entrepreneurs are tempted to borrow against their own life insurance plans because of the prospect of obtaining immediate cash for their new business at low interest rates. The rate of charged interest is highly dependent upon when the insurance policy was initially purchased. Usually older insurance policies have the benefit of offering low interest rates when borrowing against their plans. To qualify, the owner of the policy must be the one to borrow against their policy. In addition, they can borrow no more than 90% of their insurance policy’s cash value. As enticing as this may sound, the prospective business owner should be very weary of these types of loans. One downside of borrowing against one’s own life insurance policy is the reduced amount of benefits in the occurrence of an eventual death. Not only will this loan diminish the amount of the whole policy but loss of interest will occur as well. If premium payments are not made on time, a “lapse” of policy may result, and the borrower may lose his/her life insurance coverage. Lack of payments can also result in IRS problems.
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Retirement plan loans A business owner can also choose to borrow against their retirement plan(s) to benefit their startups. Retirement plans such as a 401k or an IRA may be the solution for many business owners since it is another way to obtain immediate cash. However, retirement plan loans carry plenty of risks, including the chance of the borrower defaulting on their loans. In addition, the defaulted loans and economic hardship withdrawals are both taxed as income and pose a 10% penalty if the borrower is less than 59 ½ years old. Obviously, the danger involved with this practice can be drastic, so the entrepreneur needs to make sure that their new business will be a potentially successful idea in order to prevent the repercussions of non-repayment. Conclusion Looking for funding to raise capital for a new business can be very stressful. It is not only important to explore all options when raising capital but to also consider which option has the most benefit for an entrepreneur’s business venture and way of life. Home equity loans may seem like an excellent alternative; however, if the business fails, then the entrepreneur may end up losing both their business and home. Insurance policy loans may also be tempting, but nonpayment can result in the borrower losing value to their plan and in severe cases, they may even end up losing their entire life insurance policy. If an entrepreneur decides to take a loan against their retirement plan, they will be charged a 10% penalty if they are not of retirement age, and they may even be at risk for default if payments are not made. The most important thing to consider before choosing a funding option is to make sure that a company has the prospect of being successful. If a company is successful, then repayments can be made, and the entrepreneur will not be at risk for losing everything.
Raising Your Startup Capital At The Local Bank Startup capital is one of the most important components of a new business. The key to being able to obtain startup capital not only depends on a valid business idea but also on a well-devised business plan. Such an effective plan is a prerequisite of most lenders and must be presented to potential investors or creditors for consideration. Many potential business owners do not take efficient time in preparing their business plan and, as a result, are at a loss when they are asked when and how the borrowed money will be paid back. It is important, when looking for startup capital for a new business, that the entrepreneur fully explores the various options available. Every potential new business has a variety of things that will tailor what type of startup capital the entrepreneur is trying to receive. Your local bank Many people trying to start a new business will simply visit their local bank to see if there is the possibility of borrowing startup capital there. While a commercial bank loan is not always guaranteed, a local bank can serve as a valuable resource in understanding the startup loan process. In addition to the business plan, things such as the credit history of the borrower, financial projections of the new company, collateral, and other documentation are needed for
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loan consideration. Banks are also known for judging applicants according to their character since it is a professional transaction. By meeting directly with the potential borrower, the financial lender can make a subjective assessment on the company’s founder(s) and/or prospective business proposition. The goal of meeting with loan officers is to obtain startup capital; therefore, first impressions are crucial. When a prospective borrower meets with local bankers, it is important that s/he be prepared to present his/her detailed business plan. The borrower should also be ready to answer all questions that the lenders may pose when trying to learn more about the new business. The entrepreneur will need to sell their business proposal to these people and convince them that it will be a financially successful venture. If this information is not properly conveyed, then the prospective business owner may encounter a high chance of rejection and will not receive the money they need. It is also important to note that even though an entrepreneur may have a solid relationship with a certain bank for several years, they can still explore securing their startup capital at other banks in the area. Bank loan approval Approval of a bank loan may come in the form of a telephone call or a letter through direct mail. Each loan document should be thoroughly reviewed and understood before proceeding to agree with loan terms and signing any forms. It is always a good idea to consult with professionals when accepting an approved loan. In addition, copies of all paperwork should also be made and kept in a safe place for future access. Entrepreneur borrowers are also encouraged to keep periodic contact with their loan officers. By keeping the communication levels open, the entrepreneur will be able to discuss any businessrelated problems and may easily find solutions to those problems. The entrepreneur should also be prepared to make monthly payments with interest and other additional fees that may apply. Bank loan rejection If a prospective entrepreneur gets rejected for a small business loan at the local bank, s/he should not be discouraged. Often times, business owners will get rejected multiple times before a bank will approve them. The most important thing that the entrepreneur can do, when faced with rejection, is to be persistent. They should inquire about why they were rejected, work diligently to make those changes, and then reapply at another bank. While the rejection process may seem rather perpetual and redundant, others will simply obtain funding elsewhere, including from the collaborative efforts of friends and family as well as angel investors. Conclusion Raising startup capital at a local bank can be an easy process if the entrepreneur is qualified. Certain requirements may apply, including credit and cash flow history, financial forecasts, and a business plan. While there is always the possibility of rejection, the entrepreneur should not be discouraged. They should repair any discrepancies that exist and then reapply for loans at other banks. If approved, it is important that the prospective entrepreneur understands the payment terms and schedule, as well as be prepared to pay for accumulated interest rates and other fees.
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The Benefits Of Finding People Looking To Invest In Your New Business An entrepreneur seeking to raise capital for his/her new business should be aware that there are people out there who are looking to invest. Most commonly known as angel investors, these people are investment professionals who have made it their career to invest in startup companies for a portion of the profits or IPO. Many entrepreneurs tend to shy away from angel investors because it means that ownership of the company and profits made will be shared with others. If an entrepreneur experiences difficulty in being unable to find suitable business capital from other funding sources, then choosing angel investors may be the next viable option to pursue. Benefits of angel investors There are many benefits in having angel investors as part of a new business. The most important advantage is that they provide immediate business capital. In addition, they do not require expensive monthly repayment terms as most traditional lenders. Angel investors understand that a new business will not make money right away; therefore, the entrepreneur will not have to worry about paying exorbitant monthly fees with interest. This is quite a different approach from traditional bankers who expect payment almost immediately. Another positive fact is that angel investors are very business-savvy individuals who do not want to see their money go to waste. They can bring a fair amount of expertise to the table in order to help and guide the entrepreneur and the invested company towards success. When prospective business owners choose angel investors to fund their startup, often times, they do not need other sources of funding since the angel capital amount will usually cover all startup costs. Disadvantages of angel investors Some people do not like the idea of working with angel investors because it often means that they must share ownership of the company with others. Sole proprietorship of a new business is something that new entrepreneurs may desire; however, they must reconsider, especially if they are interested in seeking angel capital. When investing in a company, angel investors often expect a percentage of company ownership, stock options, a board seat, and a large ROI. These demands are quite reasonable for the angel investor since they are putting their own money at risk when they invest. An entrepreneur must also take the time out to find the right angel investor because inappropriate selection may very well lead to problems. For example, an entrepreneur may choose an angel investor who does not have experience in the company’s field of industry or one who is not actively involved in regular company operations. These scenarios can mean trouble, especially if the new company needs guidance during its crucial early stages of development. In addition, an entrepreneur may choose an angel investor that is too controlling, which may lead to resentment and possible company failure. Before approaching an angel investor for funding, it is critical that prospective business owners complete their share of due diligence, learn about angel investors and the companies they have invested in, and understand their personalities. Conclusion Angel investors provide an excellent means for entrepreneurs who seek capital for their startups. Not only do they bring immediate business capital to the invested company but they also provide
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experience and expertise in making the new company very profitable. For those who are not opposed to sharing ownership of a company and agreeing to special terms, then angel investing may be considered a good option in order to raise the required startup capital.
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Which option IT Consultancy should go and Why?
Deciding On Whom To Ask For Funding After initially investing personal funds for a new business venture, entrepreneurs will often resort to their next option for raising capital, namely their family and friends. However, this may not be as easy as it sounds. An entrepreneur seeking startup funding cannot simply ask their family members and friends for large amounts of money. Instead, the correct way of going about asking for startup funding is by developing a business proposal and presenting it to the family members and friends whom they are planning to ask. By being prepared in this manner, the entrepreneur will be able to gain credibility from others and show just how serious they truly are about their business ideas. Making a list Most entrepreneurs initially believe they do not have many family and friends to ask for startup funding. However, once they compile a list of all relatives and friends, they will be able to see that they actually know more people than they had initially thought. At this stage, the entrepreneur should not limit the list to those that s/he thinks will be the most likely individuals to invest capital in the new business. Therefore, they should brainstorm with close family and friends on devising a list themselves. This list should include the names of acquaintances and friends they can think of in the present and past. By creating a list and asking others to make one as well, the entrepreneur will increase the number of contacts who could be potential sources of funding. Organization of the list In the list of names, the “inner circle” should include those with whom the entrepreneur has the closest relationship. This can comprise of parents, in-laws, uncles, aunts, grandparents, and best friends. The middle tier should consist of people with whom the entrepreneur has had a bit more distant relationship with but whom they have regular association with. The “middle circle” of acquaintances can be neighbors, delivery people, attorneys, and friends of friends. The outer layer of the circle should include names of people that the entrepreneur has not kept in touch with over the past few years but has shared a close relationship at one time with the entrepreneur. These people can be past business partners and associates with whom they still have a good standing relationship with.
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Narrowing the list Once a list is compiled, the next step in approaching family and friends for capital resources is to narrow the list. The need to narrow a list is necessary since it will only include people whom the entrepreneur knows have the proper finances to make such an investment. Each name should be weighed according to the person’s accountability since it would be pointless to ask individuals who have no money or who are distant in relationship to the entrepreneur. The confined list should comprise only of the individuals whom the entrepreneur trusts well and is responsible enough with providing the necessary funding for the new business. Send out a letter Once the names have been short listed, the entrepreneur needs to formally go about the request for funding. One way of asking for funding is by devising a letter that describes the new business proposal. This letter should then be sent out to family and friends through direct mail. By taking the time out to write a letter describing the business proposal and asking for financial support, the prospective business owner makes a more personable and professional funding appeal to his/her loved ones. Follow-up Once a letter to family and friends has been mailed out, the prospective business owner should follow-up with everyone they have asked. This can be done via telephone, e-mail, and even through post cards. For those who are interested, entrepreneurs need to send out a more detailed business proposal and a financial agreement that promises to pay back the amount owed. The latter is extremely important for family members and friends because it is a contract between all parties involved on how and when the borrowed money will be returned. If an entrepreneur follows these rather easy steps, then asking their family members and friends for startup funding can be an organized and easier process than one may have initially thought. Conclusion When asking family and friends for funding, an entrepreneur should follow some steps in order to make the process easier for all parties involved. First, they should compile a list of all possible contacts with whom they could possibly ask for business capital. Once the list is refined, a formal business proposal should be mailed out to each contact and followed up soon after. For those parties who are interested in financially supporting their loved one, a contract should be made regarding the entrepreneur’s intent to pay back the borrowed money.
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Objective And Scope of the study:
1) To understand and to know various Fund option available to start up new Business 2) To know the best options of Fund available for the Business 3) How to manage and setup new business or Raise fund for the business
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Recommendation :
1) Choose best Fund option for their business 2) For startup invest capital from Savings and partner saving option
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Conclusion:
Many entrepreneurs start their new companies with the intention of commercializing creative business models and innovative ideas. In a strong sense, many of these startups are high tech and have become a platform in which new business owners can offer simple prolific solutions to existing market problems. Entrepreneurs who wish to launch such high tech startups should always be aware of any emerging technologies, so they can try to commercialize and market those ideas.
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Bibliography:
? ? ? ? ? ? ProQuest : search.proquest.com/business Entrepreneur : http://www.entrepreneur.com/howto/raisemoney/index.html Go4Funding : http://www.go4funding.com AWB : http://www.apnawebsitebana.com/ MostlyBlog Apple Lover
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doc_149813293.docx
final project
Introduction:
Information technology consulting (also called IT consulting, computer consultancy, computing consultancy, technology consulting business and technology services or IT advisory) is a field that focuses on advising businesses on how best to use information technology to meet their business objectives. In addition to providing advice, IT consultancies often estimate, manage, implement, deploy, and administer IT systems on businesses' behalf, known as Outsourcing. The IT consulting industry can be viewed as a Four-tier system: • • • Professional services firms which maintain large professional workforces and command high bill rates. Staffing firms, which place technologists with businesses on a temporary basis, typically in response to employee absences, temporary skill shortages and technical projects. [Independent consultant]s, who are self-employed or who function as employees of staffing firms (for US tax purposes, employed on "W-2"), or as independent contractors in their own right (for US tax purposes, on "1099"). [Information Technology security consultant]s To gain external, objective advice and recommendations To gain access to the consultants' specialized expertise Temporary help during a one-time project where the hiring of a permanent employee is not required or necessary To outsource all or part of the IT services from a specific company Focus on the relationship: Understanding the personality and expectations of client, client organization and all other stakeholders Clearly defined role: Defined roles and responsibilities for both clients, other stakeholders and consulting team Visualize success: Helping the client see the end at the beginning You advise, they decide: Client is the best person to decide
• • • • • • • • •
There are different reasons why consultants are called in:
The four basic principles of IT consulting are:
Once a business owner defined the needs to take a business to the next level, a decision maker will define a scope, cost and a time-frame of the project. The role of the IT consultancy company is to support and nurture the company from the very beginning of the project till the end, and deliver the project not only in the scope, time and cost but also with complete customer satisfaction.
Project scoping and planning
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The usual problem is that a business owner doesn't know the detail of what the project is going to deliver until it starts the process. In many cases, the incremental effort in some projects can lead to significant financial loss. Business process and system design The scope of a project is linked intimately to the proposed business processes and systems that the project is going to deliver. Regardless of whether the project is to launch a new product range or discontinue unprofitable parts of the business, the change will have some impact on business processes and systems. The documentation of your business processes and system requirements are as fundamental to project scoping as an architects plans would be to the costing and scoping of the construction of a building. Project management support The most successful business projects are always those that are driven by an employee who has the authority, vision and influence to drive the required changes in a business. It is highly unlikely that a business owner (decision maker or similar) will realize the changes unless one has one of these people in the employment. However, the project leadership role typically requires significant experience and skills which are not usually found within a company focused on dayto-day operations. Due to this requirement within more significant business change projects/programs, outside expertise is often sought from firms which can bring this specific skill set to the company. An IT consultant needs to possess the following skills: • • • • • • • • Advisory skills Technical skills Business skills Communication skills Management skills Advisory language skills Business and management language skills Technical language skills
Under normal circumstances a fee for IT consulting is measured on a per day, per consultant basis. There is however an alternative option; fixed fee IT consulting. A fixed fee IT consulting contract applies only to projects which are well defined, for example: • • • • Infrastructure refreshment projects Network design Implementation of specific well described features, such as monitoring platforms Infrastructure capacity planning
Generally, fixed fee IT consulting is for a specific amount of work, within a defined timeframe.
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Many companies are now moving towards a fixed priced IT consulting model. This trend is expected to continue as more companies now require delivery of IT Consulting services within a defined time and price structure. Open ended consultancy models generally favour the consulting firm, as the consultancy firm is rewarded on a per day basis, there is no incentive to complete assignments within a fixed time. The result often being risk of project and cost overrun. There is a relatively unclear line between management consulting and IT consulting. There are sometimes overlaps between the two fields, but IT consultants often have degrees in computer science, electronics, technology, or management information systems while management consultants often have degrees in accounting, economics, Industrial Engineering, finance, or a generalized MBA (Masters in Business Administration). According to the Institute for Partner Education & Development, IT consultants' revenues come predominantly from design and planning based consulting with a mixture of IT and business consulting. This is different from a systems integrator in that you do not normally take title to product. Their value comes from their ability to integrate and support technologies as well as determining product and brands.
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Literature Review:
Microsoft the best example for Entrepreneur
A year in review of the information technology industry is presented. No matter what, 1996 will always be remembered as the year of the channel. In November 1995, IBM Corp. announced plans to completely overhaul the company's PC and channel business plans to work more closely with the channel to capture service revenue. In December 1995, Microsoft unveiled a sweeping online strategy that made Office, Windows 95 and Windows NT front ends to the World Wide Web. In addition, the company released a middleware specification called DocObjects that allowed 3rd-party applications to act as front ends to the Web. The new year was ushered in with Intelligent Electronics Inc. revealing plans to make major changes to its business model and management structure in what was yet another attempt to win back reseller loyalty and return the master reseller to the front of the channel playing field. In February 1996, Microsoft Corp. was turning up the heat in its Internet bid, negotiating deals with virtually all major telecommunications and cable companies to broaden distribution for its Internet and networking products.
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Infosys has reason to remember Nordstrom fondly
Mr. Murthy is employee # 4, not employee number # 1 at Infosys. Although he resigned on December 29, 1980, the day he decided to start Infosys, Murthy did not join Infosys, which was incorporated on July 2, 1981, until 18, March 1982. He had promised Ashok Patni that he would complete two projects and it took him that long to do that. "I must have served the longest notice period in the history of corporate India," laughs Murthy. P.S: N.S. Raghavan was employee # 1
Infosys has reason to remember Nordstrom fondly: the retailer agreed to what was then a record billing-rate. The first major customer Infosys signed on after refusing the GE business was Nordstrom, and at a far higher billing-rate. Not surprisingly, one of Nordstrom's senior executives was a honoured guest when Infosys showcased its Electronics City campus to the world in 1994. One individual present on the occasion remembers that the CEO of a large rival software firm based in Bangalore and his deputy were keen to meet with the man, but that Phaneesh Murthy, the man who had signed the deal for Infosys, kept them at bay.
Most people in Infosys saw Phaneesh as Murthy's successor in the late 1990s and the early 2000s. Murthy, most Infoscions (as employees are known; former employees are called Exfoscions) admit, was inordinately fond of [Mohandas Pai] and Phaneesh simply because he thought their performance extraordinary. Given Phaneesh's age (he is now 44) and his profile (he was head of sales and was responsible for helping the company grow from a $10 million one to a $700 million one between 1992 and 2002) most people within the company saw him as Murthy's successor. Then, the sexual harassment suit (circa 2002, when a former Infosys employee in the us, Reka Maximovitch, alleged that she had been harassed by Phaneesh) happened, and Phaneesh had to leave the company.
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Mphasis is good example of how to lead under very difficult circumstances. : 14 Apr 2012. (ET)
The man NR Narayana Murty (they are related) calls 'the smartest person of the Nagavara clan,' chats with CD about entrepreneurship, history, religion and of course, poetry. Why do you advise students to read Shakespeare instead of management books? Because Henry V is a very good example of how to lead under very difficult circumstances.
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Genpact is clearly at the head of the pack: May 7, 2006 (Business Today)
GECIS had grown at a CAGR (Compounded Annual Growth Rate) of 10,000 per cent over seven years, but [Pramod Bhasin] wanted more. "I thought that if we could do this for GE, the toughest client in the world, we would be able to do it for others too." Around the same time GE realised that India, to it, had finally made the shift from being a resource-centre to being an attractive market. "GE understood that a BPO business wasn't its core competence," says Victor Martinez-Angles, Senior Vice President, and Commercial Leader, Genpact, and then part of business development and mergers & acquisitions team at GE Corporate, adding that the company did express some anxiety over losing control of one of its fastest growing businesses. GE also believes in driving a hard bargain with its vendors-as several of India's it services firms will affirm-and the fact that there isn't much to be gained in bargaining with oneself may have also prompted the company's decision to sell a majority 60 per cent stake in GECIS to two private equity firms, General Atlantic Partners and Oak Hill Capital Partners. "GECIS had a seasoned management team at the helm and a mature product offering," says Abhay Havaldar, Partner, General Atlantic. "We saw a huge opportunity for its business model." In December 2004, GECIS formally became a third-party vendor and in September 2005, the company was christened Genpact and although one of Bhasin's journeys was now over, another had just begun.
Before it can drive the change that Tiger speaks of, and to reach the revenue-milestones it has set for itself, though, Genpact will have to address several challenges, some unique to it, others common to the entire industry. "Genpact will have to first reduce its business dependence on GE," says [AccessIntellect]'s Roy. Bhasin is aware of the need to do so. "We aim to reduce GE's (the business Genpact derives from GE) share in total revenues to 50 per cent by 2008," he says. "It is already down to 85 per cent in 2005 from 94 per cent in 2004." The company hopes to achieve this by winning new customers and acquiring companies that could bring in non-GE revenues. In late-March, Genpact and NDTV announced a joint venture that would provide media process outsourcing services such as editing, captioning, indexing, and digitising analogue content. With the global media and entertainment industry worth an estimated $150 billion (Rs 675,000 crore), the joint venture is looking a huge opportunity in the eye. "It is an exciting new field to explore and potentially a business as large as the software business is in India today," says Prannoy Roy, Chairman, NDTV.
The process of building Genpact's non-GE business began a year before its separation from GE (Anju Talwar, the company's Senior Vice President who heads the non-GE operations was asked to consolidate these in early 2004 itself; subsequently, Tyagarajan has been asked to scout for more). Today, Genpact boasts 80 customers other than GE; 40 of these came through the acquisition of New Jersey-based Creditek, 15 from the acquisition of a GE unit in Mexico and 25
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were new wins. One such was a deal with the us-based financial services provider Wachovia, which also saw the company pick up a 7 per cent stake in Genpact (from GE whose stake is now down to 33 per cent). And on the acquisitions front, it is targeting two to three companies with an offshore business model and between $100 million and $200 million in revenues (existing valuations in India should make Genpact itself a not-very-affordable acquisition for large global it services firms that are on the hunt in India, although, as is the case with such things, one can never tell). "We have enough cash reserves (to fund these acquisitions)," says CFO [Vivek Gour]. "We don't need to raise money through an initial public offering." Not that raising money from an IPO would be difficult. "A BPO firm is evaluated on the basis of its pre-tax (and interest) margins, the number of contracts on its books, customer-commitment, and the inflationsharing equation between company and customer," explains a Delhi-based equity analyst. With estimated net profit margins of between 15 per cent and 18 per cent as compared to between 10 per cent and 15 per cent for the industry, Genpact is clearly at the head of the pack.
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Apple inc start up history: July 26, 2011 (Apple Lover)
Exactly, many of us had known about apple product but I realize not at all of apple user knowing the history of its company. Steve Jobs and Steve Wozniak were friends and both are interested in electronics. Wozniak design the computer to chat some time when, in 1976, he designed what would become the Apple I. Jobs, who had an eye for the future, insisted that he and Wozniak to try to sell the machine, and April 1, 1976, Apple Computer was born. Apple was founded by Steve Jobs, Steve Wozniak and Ronald Wayne to sell the Apple I personal computer kit. Wayne has sold part of Jobs and Wozniak in the early history of the company. Apple Inc. is the largest technology company in the world and the second largest company by market capitalization. Apple designs and manufactures computer hardware, software and other electronic products, including iPod, iPhone and iPad. The company is innovative and set industry standards for personal computers since the beginning. Later PowerBooks began with the introduction have set the standard for laptops. Today, with their computers, laptops and other devices like the iPod success, iPhone and iPad they are a force to reckon with. In May 2010, the market capitalization of Apple closed the day at 222.12 billion dollars is ahead of its rival Microsoft from Apple Corp. has reached a record $ 330.26 in 2011 the first regular session negotiation.
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Intel was distinguished by its ability to make semiconductors :
At its founding, Intel was distinguished by its ability to make semiconductors. Its first product, in 1969, was the 3101 Schottky TTL bipolar 64-bit static random-access memory (SRAM), which was nearly twice as fast as earlier Schottky diode implementations by Fairchild and the Electrotechnical Laboratory in Tsukuba, Japan. That same year Intel also produced the 3301 Schottky bipolar 1024-bit read-only memory (ROM) and the first commercial metal–oxide– semiconductor field-effect transistor (MOSFET) silicon gate SRAM chip, the 256-bit 1101. Intel's business grew during the 1970s as it expanded and improved its manufacturing processes and produced a wider range of products, still dominated by various memory devices. Federico Faggin, the designer of Intel 4004. While Intel created the first commercially available microprocessor (Intel 4004) in 1971 and one of the first microcomputers in 1972, by the early 1980s its business was dominated by dynamic random-access memory chips. However, increased competition from Japanese semiconductor manufacturers had, by 1983, dramatically reduced the profitability of this market, and the sudden success of the IBM personal computer convinced then-CEO Andrew Grove to shift the company's focus to microprocessors, and to change fundamental aspects of that business model.
By the end of the 1980s this decision had proven successful. Buoyed by its fortuitous position as microprocessor supplier to IBM and IBM's competitors within the rapidly growing personal computer market, Intel embarked on a 10-year period of unprecedented growth as the primary (and most profitable) hardware supplier to the PC industry. By launching its Intel Inside marketing campaign in 1991, Intel was able to associate brand loyalty with consumer selection, so that by the end of the 1990s, its line of Pentium processors had become a household name.
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Introduction & Company Profile
AWB (Apna Website Bana) : Apna Website Bana.com Was Founded on 29th October, 2012. AWB Basically an IT Consultant mostly provides services on Website Development, SEO, Blog, WordPress Setup, Software Development, E-commerce Website, Domain And Web hosting Services. ? Objective :
Design priorities do vary. For example some sites focus on service, other sites focus on sales. Clarifying the key objectives, purpose or priorities helps to determine the content and structure of the site. ? Mission :
To enhancing the business growth of our customers with creative Design and Development to deliver market-defining high-quality solutions that create value and consistent competitive advantage for our clients around the world. ? Vision :
To become a prime performer, in providing quality Web, Print and Software solutions in the competitive global market place. ? Commitment :
We take pride in our on time delivery and ability to meet quick turn around requests while exceeding customer quality demands. Customer Satisfaction continues to be of utmost importance to CWS, as do Consistent quality, Constant innovation, Technology enhancement, Process improvement and Customer orientation. We have developed our core competence and aligning objectives at all levels so as to realize synergy in operations. It is our collaborative approach, creative input, and emphasis on economical solutions that has allowed us to develop an impressive and diverse client list.
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What It Takes To Start a Business - Starting A New Business
Many people may enjoy the notion of starting their own business because of the lure of generating immediate profits for their innovative inventions and ideas. However, it takes more than just having an idea of a establishing a startup that will lead to a company’s success. There is a considerable amount of planning that needs to take place prior to the launch of a company in addition to personal and financial dedication. Despite the fact that the majority of startups will eventually fail in their first year, many of these failures can be prevented if entrepreneurs’ simply took the needed time to properly assess if they have what it takes to run their own company. Industry experience One question forthcoming enterprise founders should ask themselves is whether or not they are fully capable of starting their own business. The idea of a startup may seem like an alluring prospect, but without familiarity and understanding of the industry, entrepreneurs may experience a difficult time in sustaining their company’s success. The imperative qualification of industry experience should not be overlooked because it may mean potential failure in the end. Lack of experience does not necessarily mean that entrepreneurs should not start a business; however, they should wait until they have developed considerable knowledge in the field. They can accomplish this by talking to other business owners within the same industry who can give practical advice about startup costs, revenue projections, expertise in running a company, and other additional company expenses. A prospective entrepreneur should also conduct independent research regarding competitors as well as find out which sorts of businesses are needed within their community. Risky business Many entrepreneurs will agree that starting a small business is a risky endeavor. Not only should ample time and energy be invested during a company’s preliminary stages but company founders should also be aware that their reputation may be jeopardized if their business fails. In addition, if a company is not successful as anticipated, there may be a strong possibility that business owners may have to resort to closing or bankruptcy and lose much of their invested wealth. The first few years of a company is considered to be a very crucial time for entrepreneurs since their startup’s fate is unexpected. It is important that an individual evaluate the different risks involved when considering entrepreneurship. If they do not feel comfortable with taking these risks, then perhaps they may need to reconsider whether starting a small enterprise is suitable for them. For more information about the Pros and Cons of Angel Investing, please refer to our related articles section of Angel Investing. Be ready to be the boss Many first-time entrepreneurs will agree that the reality of running a small business is very different than what they had initially expected. Some business owners may have the misconception that once they launch their businesses, they will be able to finally have more available free time and can live a comfortable, stress-free lifestyle; however, this is not completely true. A significant part of owning a company and becoming your own boss includes an undeniable amount of sacrifice, where much arduous effort and comprehensive hours of labor is required. Many business owners may not be prepared for these daily challenges and may lack
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the necessary personal drive and motivation to manage their employees, deal with customers, or even run a whole company. Forthcoming entrepreneurs are encouraged to actively solicit the opinions of others to find out if they are completely capable of being their own boss and running a company. The pooled opinions may vary, and at times, be painful to accept; however, it is always a good practice to obtain constructive criticism from others before making the crucial decision to start a business. Family support Starting a small enterprise and managing family life are considered to be both demanding, fulltime responsibilities. Both commitments encompass the sacrifice of time, effort, and finances to properly sustain. These can be quite difficult tasks for the entrepreneur to properly balance and for their family members to fully accept. Family members of business owners should be prepared for all the daunting challenges associated with a startup, including the demanding schedule of their loved one. It is a proven fact that entrepreneurship can be mentally, physically, and financially draining. Family members should offer their loved ones understanding and emotional support, especially during the preliminary years of the company launch. Genuine enthusiasm and creativity Many people become inclined to start a business simply for the financial return. On the other hand, there are entrepreneurs who have the tendency to see beyond this monetary gain, are clearly very enthusiastic about entrepreneurship, and confident that their products and services are what people want. In addition, this latter group of entrepreneurs tends to have a relentless inherent sentiment that once their unique ideas are marketed, these innovations can clearly improve one’s quality of life. This unwavering optimism and passion for their company is the driving force behind their solid success. For more information about Winning Entrepreneur Characteristics, please refer to our related articles section. Once an entrepreneur has evaluated they have what it takes to start a company, they can now follow a few steps to launch a successful business.
1. Visualization and research of product, service, and market
The initial step to a successful business involves the company owner’s work in preparing and improving the products and services that will be offered to paid customers. Prospective entrepreneurs must first decide on the type of business they are interested in starting. They must then use those ideas along with their personal and professional experiences into envisioning and creating goods that will greatly attract a consumer base. The design and innovation of such products often entails extensive research of competitors and prospective consumers in the targeted markets. Once the products/services are determined, a product prospectus should be written, documenting how each of the products/services are prepared, used, and its competitive edge.
2. Preparation of a marketing strategy and well-written business plan
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Once entrepreneurs establish enough knowledge about their target markets and have implemented their active concepts into reality, they are now ready to market their goods and ideas. This often entails devising a marketing strategy which is successfully accomplished by paid professional assistance and/or experimental presentations to attract a consumer base. A detailed business plan is also needed for any business, regardless of the size of the company, which documents the company’s objectives, their goods/services offered, startup costs, and the targeted market and customers. Every business plan varies, and the Small Business Administration (along with other private companies) may be able to offer paid technical and practical advice in creating a business plan tailored to a company’s needs.
3. Seeking professional assistance
Government agencies can offer company owners much needed expert and friendly advice on starting a business. In addition, lawyers and accountants can provide entrepreneurs with valuable information concerning government rules, regulations, zoning, and other legal issues. Many of these professionals can also critique proposed business plans and assist in determining which legal form is most suitable for their company (i.e. partnership, proprietorship, corporation, etc.).
4. Sources of capital
The final step in starting a business entails obtaining the necessary funding to sustain a company’s survival. Some sources include the use of personal savings, angel, (for more information about angel investors, please refer to our related articles section) and venture capitalist financing, borrowed money from business associates, private loans, and family and friends. The process of obtaining funding may be time consuming and frustrating; however, it is important to stay motivated until the desired capital is raised. While many people can envision the idea of owning their own business, some do not have what it takes to start and successfully sustain a company. Most small enterprise failures can easily be avoided if business owners would simply be aware of the challenges that lie ahead and evaluate within themselves if they are fully prepared to start their own business. Once they are able to determine that they are capable, they can then take the necessary steps needed for startup success.
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Public Relations Campaign to Help Improve a New Business
A poor marketing strategy is one of the leading reasons why most businesses fail. It is no wonder that many new enterprises resort to establishing a strong public relations campaign in order to actively advertise and promote their businesses. Public relations are a vital necessity for a company’s success. Without it, entrepreneurs have no outlet to effectively sell their products and services. Public relations can encompass many different channels, including print and broadcasting media as well as in-store promotional offers. Depending on the type of business, the entrepreneur can decide which public relations outlet will be most useful in establishing the company’s success. Here are a few steps entrepreneurs should follow in order to determine the most efficient manner to promote their company. 1. Define your audience Every public relations campaign for a new business should first develop a good idea of who their target audience will be. Depending on their products and services, a company can tailor their marketing approach according to the demographical information of their prospective customers. For example, a children’s clothing store can easily target grade school children (ages 8-12) by selling the latest school fashions and accessories. Their newspaper and television ads can primarily focus on contemporary casual school wear with a friendly “back-to-school” theme. 2. Define your competition The next important step is to identify the competition. Every business has competitors, and it is extremely important for new business owners to thoroughly study their opposition so they can work aggressively to “outdo” them. Such information can be obtained by visiting their opponent’s websites and by studying their different marketing materials and pricings. For example, a car wash that is located two blocks away offers new customers 15% off their deluxe wash. Entrepreneurs can have a competitive edge by offering their existing customers 20% off as an incentive to stay loyal, and they can recruit new customers by advertising large posters at local gas stations. 3. Determine your advertising budget After identifying the target audience and any major competitors, entrepreneurs are now faced with determining the most effective way to publicize their business. Advertising a new business is not a cheap endeavor. The entrepreneur should establish how aggressive their approach will be in winning over potential customers and how much they can afford to pay for their marketing strategy. For example, if an entrepreneur of a small flower shop can only afford to use print media, they can use their advertising budget towards posters and fliers that can be distributed locally and then use a portion of the budget towards newspaper and magazine ads. If one large ad is too expensive, they may opt to place smaller ads in newspapers and magazines more frequently. 4. Self vs. hired professionals Once an advertising budget is determined, the entrepreneur can now decide whether they will need the help of a public relations specialist to promote their company. There are many
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“cheaper” alternatives rather than hiring a public relations specialist, including the use of newspaper advertisements, posters, direct-mail notices, blogs, etc. to lure prospective customers. On the other hand, a skilled public relations specialist can easily provide more aggressive methods of publicity. Since they will most likely have proven experience in the given field of industry, they can effectively convey accurate information to the target audience through more outlets, including local and national television commercials, in-store item positioning and sales, and various packaging styles and techniques in order to gain new and repeated customers. A public relations firm can also help devise many suitable topics for public relation statements, including announcements, communicating a change, stating an opinion, or revealing a finding. The following ideas can be used to develop effective public relations for a new business: 1. Media outlets There are different kinds of media outlets which business owners depend on to promote their enterprises. Print media refers to any image or text that can be produced on paper or on objects. Posters, brochures, catalogs, daily newspapers, business journals, fliers, and newsletters are some forms of print media. It can also comprise of billboard advertisements and items which contain company letterhead and promotions (i.e. pens, key chains, etc.). For example, a jewelry store can rent billboard space and place their billboard advertisements along busy highways to lure customers, while a local bank can advertise their grand-opening on promotional key chains and pens. Common broadcasting media include television and radio markets. It is common for many businesses, small or large, to resort to this form of public relations since it provides a fast and efficient method to gain local, regional, and national recognition. Entrepreneurs also like to use this broadcasting approach since it repeatedly reminds listeners of any grand openings or upcoming sales during their normally scheduled television viewing and radio listening times. For example, a department store can choose to advertise their television commercial during the evening news. Throughout that timeslot, many people who are watching the news can also be aware of any sales and in-store promotions the department store chooses to broadcast at that time. 2. Bartering or trade-out Another successful method of public relations for a new business is the use of bartering. When a company practices bartering (trade-out), they simply exchange their products and services for free radio airtime. Many radio stations benefit from bartering since the products and services can be used for their on-air contest prizes. In the same respect, companies can use this trade-out as a platform to aggressively advertise their company. For example, when a local fitness center barters with a radio station, they can exchange several free three-month memberships to their gyms for every 5 commercials that the radio station plays. Bartering is certainly an effective means of advertising for both parties involved. 3. Get the management team involved A company’s management team can play a very vital role in the success of a business. They, too, should be part of a company’s public relations campaign. Entrepreneurs are encouraged to
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inform their management team of the progress of their company’s sales and even get them involved when brainstorming different ideas to increase overall transactions of their offered products and services. The management team can greet customers when they enter the store and inform them of any free trial periods currently offered. Management can even pass out different sample products in the storefront in order to entice potential customers. A perfect example of the management approach to marketing can be found in any local mall. On a typical weekend, one may discover that their local mall ice cream shop has a new flavor. To promote this new ice cream flavor, the company’s staff members can simply offer free edible samples to different people passing by and even give discounts to those who purchase a cone or sundae of the new flavor. 4. Network through existing customers Existing customers serve as an essential component for a company’s success. If a customer is pleased with the products and services offered, they can simply converse with others about their delight in a company. This positive word of mouth is transferable and a good way to gain prospective customers. Companies can also offer their existing customers promotions or rewards for helping them recruit new patrons to their business. For example, a residential management team can offer monthly rent discounts to new tenants who agree to sign a one year lease with them. Not only do the new residents save money, but existing customers who refer family members and friends can also receive continual rent discounts. 5. Always position yourself as an expert Customers always feel a degree of satisfaction and comfort in knowing their inquiries were addressed by an expert. Therefore, it is vital for business owners, their management team, and staff to establish themselves as specialists in their chosen field. They should know everything about their products and services and be ready to answer even the most detailed inquiry with confidence. For example, a college-aged, health conscious customer went to three different health food stores looking for a particular grain that is high in protein and fiber (called quinoa). In all three stores, the staff had no idea what she was referring to or had never heard of the word before. Discouraged, she went to a final location to find this product. She was amazed to learn from the sales clerk that not only did they carry this product, but that he was also able to provide background information about the product and of the different varieties available. This customer was so pleased by her encounter that she not only referred her friends to shop at this store but she also remained a loyal repeat customer for many years. 6. Website development Another way new businesses can gain customers is through the use of their website. A professional-looking, user-friendly company website can have a competitive edge among others since many people enjoy the convenience of shopping online. Many companies can further raise their profile by employing the help of a professional webmaster for search engine optimization and affiliate posting to increase the flow of online traffic to their company website. For example, if someone is looking to buy fine silverware and dishware, they can simply type “fine silverware and china” during a web search and will instantly find sites that exclusively sell these products. In addition, there is great marketing value when a company decides to post their advertisements on affiliate sites and vice versa. By linking different sponsors and associates on a company’s
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website, entrepreneurs can easily raise their recognition since they can be listed on many different sites. 7. Community involvement and public speaking A new company can boost their profile by participating in several non-profit organizations and community-related services. First, a business owner should identify some local causes they may find worthwhile and promote their business in the process. For example, the owner of a trendy women’s boutique can decide to become involved in breast cancer awareness and research. Through active participation of high-profile community marathons, bake sales, and events, the entrepreneur can gain recognition, especially if they advertise they are a sponsor. In the same respect, the entrepreneur can also speak out during public events about breast cancer awareness as well as donate a portion of any item that was bought in their boutique towards breast cancer research. This type of public relations can be beneficial for both parties since community involvement was an effective way to raise money and awareness for the company and for cancer research. Public relations are extremely important for a company’s success. They can include everything from networking through existing customers to active participation of community-related activities as well as targeting the assistance of television and radio to advertise their company. If a company decides that the broadcast media is the most effective outlet to improve their business, they can write a press release to a local newspaper to make an announcement. They can also seek the assistance of a public relations firm who can conjure different topics for all public relations statements. If done properly, a public relations campaign can add to the popularity, profitability, and trustworthiness of a new business.
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Small Business Funding Myths - Starting A New Business
There exist many misconceptions regarding funding for small businesses. Some prospective business owners may believe that obtaining necessary capital for their is an easy and straightforward task, when, in fact, the process may be more complicated than initially anticipated. For example, many business owners may feel the need not to implement an effective marketing strategy or prepare a well-devised business plan, which can often greatly contribute to a company’s failure. Furthermore, there is an erroneous belief that the U.S. government can offer financial assistance to those who apply and that entrepreneurs can increase their chances of acquiring angel capital if they actively solicit the help from numerous contacts. The realities of many common myths are explained below. An individual considering the prospect of entrepreneurship should be aware that it takes time to evaluate the different options in order to obtain funding and that they may even experience repeated rejections before the needed capital is raised. Myth No. 1- "I can easily find funding for my new business in a few months." The Truth- Obtainingstart-up funding is a long and tedious process that can actually take years to achieve. A wise entrepreneur is one who acknowledges this extensive process yet is patient and seeks all means to accomplish this goal. First, these entrepreneurs take time out to meticulously research prospective investors with experience in their field of industry. In the course of this process, they may be rejected multiple times; however, they still find time to optimize their resources by networking extensively with others. They also use their rejections as a means to refine their elevator pitch and devise a well-detailed business plan. Most investors will not even consider providing necessary funding for a venture unless the entrepreneur has demonstrated such preparation. Their invested company’s products and services must also prove to be successful in trial marketing, which may also take a considerable amount of time to execute. In addition, entrepreneurs must establish that they have exhausted all other financial opportunities to launch their business. Along with the due diligence process, which can take months to achieve, it may be several years until the entrepreneur is able to obtain desired funding. Myth No. 2- "My business idea is great and unique. I should get funding right away.” The Truth- Often times, entrepreneurs are overconfident about their business ideas and innovations. Just because they feel that their products or services are marketable does not mean that their ideas are good enough for investors or the general public. Every year, thousands of people truly believe that their inventions will be the next "million dollar” idea, when, in fact, the majority of these ideas will lead to many disappointments. Many business ideas will simply not survive in the market due to the competition among major competitors and the development of further well-devised products. That is why entrepreneurs need to research and refine their ideas, which takes much needed planning. In fact, an invention should be test marketed after establishing such preparation in order to get ample feedback from customers. An invention is considered "fundable” when a test model (pilot model) can prove that consumers will be willing to pay for the product(s). This will not only show investors that the company has the potential for
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producing a large return on investment, but it also gives time to polish any flaws before mass production of a product takes place. Myth No. 3- "I know everything about my business; therefore, I do not need to create a business plan.” The Truth- According to the United States’ Small Business Administration (SBA), approximately 90% of all small businesses fail within the first two years of operation. It is also striking to note that the majority of these companies have no business plan. If a business plan exists, it may not be updated or the company may even fail to comply with their existing plan. This is why most successful entrepreneurs agree that the key to sustaining a startup is by creating and enforcing an effective business plan. Most prospective investors will not consider investing in a company without a business plan, which primarily focuses on daily company operations, the management team and employees, finances, etc. Business owners and employees are encouraged to follow their business plan and update it accordingly throughout the development of their company. Myth No. 4- "I know how to market my products; therefore, I do not need a marketing plan.” The Truth- A marketing plan is a written document that details the advertising objectives of a company. It documents a business’ marketing approach and expenditures in promoting their company, brand, or company’s product line. Many startups depend on their marketing plan to gain publicity and to promote newly released products or services. Consumers, on the other hand, are highly influenced to buy products from companies with effective marketing plans and strategies. Hired professionals are known to devise successful marketing plans, which are vital components of a company’s overall investment. Through an effective marketing strategy, plan, and public relations, an enterprise and their product line can gain public recognition, further contributing to their success and profitability. Myth No. 5- "The more investors I contact, the more likely I can find funding.” The Truth- Often times, this myth is accompanied by sending mass e-mails and direct mail to hundreds of investors with the hope of successfully targeting prospective ones. Investors will admit that this is clearly the wrong approach when trying to find investors since mass mailing is considered a waste of money, time, and energy. Investors who grant small business funding should be sought by quality, not quantity. Entrepreneurs are encouraged to thoroughly research several potential investors at a time who have a solid track record of success in their field of industry. Even though there is a high probability of rejection, the entrepreneur should not be discouraged and should continue to research probable investors. Upon this research, each prospective investor should then be sent a personalized request. By sending these custom-made requirements, the entrepreneur will gain credibility from investors, who will recognize them for conducting their own due diligence. Myth No. 6- "I can easily get funding from the SBA.”
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The Truth- This is a very common myth of many entrepreneurs. The fact is that the Small Business Administration (SBA) does not lend money directly to business owners. Instead, they act as a guarantor through local lenders in order to stimulate the economy in many communities by promoting startup growth. A prospective applicant should have a good credit history, proof of income, a solid business plan, and collateral in order to be considered. Even though it is smaller in amount than most banks lend to startups, approval of an SBA loan will increase one’s chance of obtaining additional capital from many lending institutions. Myth No. 7- "I can get government funding for my startup.” The Truth- Most federal grants are available only to medical, scientific, educational, and nonprofit ventures. If a startup does not fall into one of these categories, they will most likely be rejected for their application. Non-profit organizations that do get accepted for government grants are usually related to research or product development. One important fact to mention is that grant funding is usually awarded in small amounts and is not a sufficient source for financing a startup. Businesses that acquire grants often depend on multiple sources of capital, including capital from lending institutions and private investors. It is also a very competitive process to obtain a federal grant since there is only limited funding available. Entrepreneurs who strongly believe that their business falls into the category of receiving government grants should target different organizations and propose a grant request. Myth No. 8- "Venture capitalists will give me money for my startup.” The Truth- Venture capitalists usually invest in companies that are already established, not ones that are in the early stages of development. Due to the fact that venture capitalists pool their money from multiple sources, they are extremely selective with funding applicants, choosing their investments in "safe” companies, ones that have already established a large degree of success. Angel investors, on the other hand, typically invest in startups and early stage ventures, companies that have not yet established any degree of success. They use their own money for funding young companies, making their investments more "risky” than that of venture capitalists. However, they are also selective with their applicants, who need to convince them that their company will produce a large return on investment. Conclusion Many of the common small business myths contain some of the most inaccurate information about funding a startup. Now that these funding myths have been debunked, it is the entrepreneur’s duty to conduct their own ample research in order to learn about the credibility of any given information. In addition, business owners are encouraged to work with skilled professionals with expertise in their field who can create for them practical business and marketing plans so that they can successfully find adequate funding for their venture.
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What does an IT consultant do? There is no legal protection given to the job title IT consultant therefore anyone can wake up one day and start up an IT consultancy business. Unfortunately this means that there is a real spectrum of consultants with a huge range of ability all out there trying to win your business. That said IT consultants do tend to fall into some distinct categories: • The local computer shop. Quite often working out from a local retail store selling computers and peripherals these consultants will supplement their retail income with some “break fix” work or onsite consultancy. They are often very good at mending broken computers, installing basic networking and setting up basic software packages. The cost per day may be from £100 – £250 depending on the work they are doing for you. The one man band. Without retail premises these people rely on advertising in local papers and listings and word of mouth to get their work. They may have a broad set of experience and be able to help you fix a number of problems. They may also offer a technical support service on an annual contract, enabling you to call them up on the phone to help fix an urgent problem. The cost per day is likely to range from £200 - £600, dependent on the work you have agreed with them. The small and medium sized consultancy. Often formed of a group of consultants these people often have more specialised skills grown out of working as an employee for one of the big product manufacturers. For example they may be experts in small business accounts software or specialised CAD (computer aided design) software that you may need to use in your business. Many of these consultancies would be affiliated with one or more of the major vendors and would have undergone training and certification according to some quite rigorous rules. Theses consultants are unlikely to offer more general or ad hoc IT consultancy. Costs per day will be from about £500 - £1500. Large consultancies. There are some consultancies that employ many thousands of consultants and IT engineers, offering everything from hardware supply through to business remodelling. The cost base of these companies is reflected in their daily charges, many with a minimum of £1500 per day for fairly junior staff. Principals and partners can easily be charged out at over £3000 per day. These consultancies are probably not suitable for many small businesses.
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Analysis of sources of finance available for IT Consultancy Feasibility :
Ways to Raise Startup Money 1. Personal savings . There's nothing like having your own money saved, to put into your startup. You have the satisfaction of having saved it on your own, and the knowledge that you don't owe anyone. Risk : It's your money, and if you're not successful, the money is gone, and with it the opportunity to do anything else with it later. 2. Partner savings . Having a partner helps spread out not only the business management but the financial burden. A good partnership is also synergetic, bringing more success than running a business alone. Risk : A fed up partner who wants out; arguments; irresponsible partners who leave you with all the debt; broken friendships. 3. Sell your stuff . Sell anything you haven't used in a year or longer. The same goes for leased items. Risk : Regrets, or worse: going out and spending to replace the item(s) you sold. 4. Windfalls . Invest any tax refunds, gifts, lottery winnings into your business. Risk : Getting hooked on lotteries and gambling to "fund" your dream business. 5. Barter and resell . Consider offering product or services that you can barter in return for something that you can sell for a profit. A very extreme execution of the bartering principle is Kyle MacDonald's One Red Paperclip experiment. He started with a red paper clip, and through a series of swap/ barter transactions, he ended up with a house within a year, and is now trying to trade it, potentially for cash. Risk : One Red Paperclip is a novel approach, though unless you have something well-thought out and as interesting (and you let your personality through), it's hard to do a successful followup
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act. You might find enough people to support you, but you'll need to find them and hopefully they'll know nothing about One Red Paperclip. 6. Retirement savings plan . Dip into your retirement savings, especially if there's a government incentive (i.e., qualified tax break). Or take advantage of home ownership programs from retirement plan funds, and use your original rental funds towards your business. Risk : If you can't pay back your savings plan, there may be a penalty as well as having to declare the funds as earnings. 7. Credit cards . It might be easier to use your lines of credit (which you'll have if you have a good credit score). Risk : Credit card interest rates are almost always higher than that of a bank loan or blood money. (The latter sometimes has no interest rate, but you pay for it in other ways, as indicated above.) 8. Credit card arbitrage . This is an extension of the credit card approach, and uses the "0% balance transfer " options that were so commonplace a few years ago. With the current credit crunch, this may not even be an option. Risk : This is a dangerous way to run a business, but the very disciplined entrepreneur with "sure" income can pull it off. Prior to the current economic crisis, type of card choice would have been the 0% cards. Even before such cards existed, some entrepreneurs have successfully built businesses on multiple credit cards. Others have gone into heavy debt and gone bankrupt. Having a business plan that has been carefully scrutizined can make the difference. 9. Blood money . Borrow from family, friends, colleagues, or employees . An alternative to this is to have one of the aforementioned cosign a bank loan for you. Risk : Meddling lenders, constantly reminding you of what they gave you; ruined friendships. 10. Get a bank loan . If you have a solid business plan and the lender agrees, this can often be the cheapest (interest rate-wise) loan sources available. Risk : Besides the fact that it's often hard for a startup to qualify - since there's little evidence you'll be profitable - if you do get a loan, it can be like a ticking time bomb if your business isn't doing well.
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11. Home equity . If you have equity in your real estate holdings, some lenders will accept that as collateral against a business loan. Alternately, you could refinance your home, taking a mortgage with a lower monthly payment, thus freeing up some funds for business. Risk : You put your home at risk, and potentially your family and marriage, if that applies to you. With refinancing, you end up paying far more interest over the lifetime of your mortgage. 12. Cash out your life insurance policy . This has been a common way for entrepreneurs to fund their startups. Risk : The payout is usually a lot less than the policy is worth. It's not recommended if you have a history of illness because you can't afford to get sick, injured, or worse. 13. Grants . There are often a variety of government grant programs for specific types of startup businesses. for more information, search online on government websites. Unless they're reputable, don't pay money to sites that tell you they'll give you a big list of where you can get grant money. Risk : While grants are rarely required to be paid back, accountability is higher, and you might have to work within a difficult deadline, to show your progress. If you do not achieve the progress you indicated in your proposal, there may be some sort of penalty. 14. Donations via social media . For example, the Tweetsgiving drive via Twitter pulled in over US$10K in just 48 hours, simply from donations of $5 or $10 dollars. This sort of approach works thanks to online payment processing services such as PayPal . Risk : Generally only effective for charity organizations, and not necessarily one that is yet to be established. Requires a large group of followers, or enough "power" accounts in your Six Degrees of Separation chain. 15. Microloans . Kiva , Prosper , etc. These may be relatively small, but if combined with a technique such as bootstrapping (discussed below), might get you through the early stages of your business. If you have a good plan in a potentially lucrative niche, microloans might be easier to get than a bank loan or investment funds. Risk : Everyone knows your business. Or at least more people than you might otherwise want, from the website in question. What's more, the U.S. government has put many microloan sites (e.g., Prosper) on notice to file with the SEC (Securities and Exchange Commission). This might or might not raise transaction fees, or simply limit the pool of funds since they're currently not accepting new lender registrations.
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16. Startup incubator . Business incubators such as YCombinator exist in various industries, but more likely for tech niches than anything else. They tend to be more accepting of a promising idea and a smart entrepreneur. This type of funding is sometimes known as "seed financing." Risk : Their funding offers are typically smaller than from angel investors or VCs. Incubators are sometimes found at university campuses, funded by industry, but less visible to anyone outside of the community. They might fund very fewer projects and with smaller budgets. 17. Investor capital . Get angel investments or venture capital. Convert blood money lenders into investors or silent partners. Or find angel investors, who tend to give smaller loans than VCs (Venture Capitalists). Venture capital is less of an option for most startups, but might come at a later stage. Note that at a later stage, your customers and suppliers could very well be investors. Risk : Not enough money, or difficult repayment terms. Many investors expect to sell the company at some point in the future and cashout. That means offering an IPO, which locks your payout thanks to SEC rules. You also have to be incredibly careful about not falling into insider trading issues. 18. Leasing . Leasing is not so much a way to raise funds as save them, since equipment leasing reduces your initial startup costs over buying outright. Risk : Leasing means having to pay interest, sometimes at high rates. If you run into any cash crunch, it could mean losing equipment that you need to operate, or having to come up with funds to make lease payments. 19. Factoring companies . Factoring companies buy your pending invoices (accounts receivable) and give you cash, minus a transaction fee. Risk : You get paid sooner but you lose profit that might be crucial in the future. 20. Check rediscounting . This is similar to factoring. However, check rediscounters take a postdated check you have written and pay you now, minus a fee. Risk : This is more risky than factoring, since you're make an assumption that you'll have funds in time. If you don't, and if you don't have sufficient bank overdraft protection, then this could spell serious financial problems.
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21. Private offering . Turn your blood money lenders into part owners, so that they have an emotionally vested stake in seeing your business succeed. Risk : You might lose partial control of the business, and if you have to have meetings to make simple decisions, that could hinder your ability to work effectively. 22. Public offering . A public offering widens your potential for selling shares and thus getting operating capital when you need it. Risk : Shareholders expect something in return, whether it's dividend payouts or increase in stock value. There's also the issue of now being bound by all the SEC (Securities and Exchange Commission) rules. 23. Consignment . This isn't so much as a fund source as it is a source of product to earn revenue and then pay "suppliers" after their products sell. Small boutique shops often take this approach, thereby reducing their operating costs to rent, electricity, phone and few other items. Stock costs drop potentially to nil. Risk : If you're not disciplined enough to sell the product, product takes up space and suppliers get upset. 24. Employer intrapreneurship programs . Companies sometimes have programs that allow qualified employees time, resources and even funding to explore a business idea or technology. Risk : You may have to live up to certain milestones or expectations, or will likely have to turn over any inventions/ technology to the company. That is, even if you get credit, you might not be able to profit from your effort. 25. Entrepreneurship programs . This is similar to intrapreneurship programs but is not limited to employees of a company or organization. Risk : Once again, you may have to live up to certain milestones or give up some control in your startup. 26. Online ad revenue . This is an option that has only become available in the last few years. If you have the skills to build, promote and monetize a web site - which you can start for practically nothing - then you might profit either by selling it or using advertising or other revenue (premium content sales, subscription fees, consulting, etc.) to fund your startup.
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Risk : The risks are multifold. First, despite that some website owners earn substantial income from just advertising, that source can drop unexpectedly due to changes in search engine ranking systems. You also have to put in considerable early effort to build a website to a monetizable state. This means less time for you, which might delay the launch of your startup. 27. Freelancing or contracting . You may not be able to hold down a regular job while also running a startup, but part-time freelancing or contract might be an option for producing extra income. Risk : Time spent freelancing or contracting is time that you cannot spend on your startup. 28. Auctioning your name . If you don't like your personal name or are otherwise willing to change it to a company or brand name, you might be able cash in for many thousands of dollars. Risk : Usually the potential of being ridiculed by friends is enough, but part of the deal might mean having to change all your official documents. There could be negative publicity as well. 29. Selling your body . No, not like that. Sell advertising space on your body . Options include wearing signboards, t-shirts with company logos, or temporary or permanent tattoos. A less drastic option is to sell ad space on your car. Risk : Do you really want to be associated with someone else's brand while trying to build your own? If it's a permanent tattoo, don't be surprised if you have regrets in the future. 30. Awards/ competitions . Universities and companies occasionally have business/ entrepreneurial competitions. Risk : The payoff may not be large enough for the effort you put in to win. Some contests may require you to reveal more details than you're comfortable with, or possibly have to give up ownership - depend on sponsor requirements. 31. Dividends . If you have mutual funds or stocks in your investment portfolio that pay out regular dividends, this could be a potential source of startup funds. This way, you do not have to cash in your portfolio, and it can continue to earn for you. Risk : Depending on tax laws in your country, some types of dividends might be taxable at source, if you are not reinvesting them. So your actual "take," minus any brokerage fees might leave you with very little.
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32. Real estate . Sure, the market is a mess right now, but if you have the down payment and will have enough cash flow, consider acquiring some real estate because of all the deals available. Move in to part of the property and rent out a portion. Not only do you build equity, you might even have a positive cash flow to put towards your business. Risk : While a renter's mortgage is often offered at a lower interest rate, you're reliant on tenants for part of your payments. If your tenant moves, there's the time and cost of finding a new one. 33. Bootstrap . When none of the other options are viable or available, bootstrap your success . Put all or most of the profits of your business right back into to it until it becomes self-sustaining. Risk : Bootstrapping can feel like a thankless activity for quite some time. It can break the spirit of some people.
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Options to Look At When Looking For Funding For Your New Business
When an entrepreneur decides to begin the process of starting his/her own business, one of the first steps taken is to look for funding. Creating a new business can be a stressful ordeal; however, raising the necessary business capital is part of this crucial process and one that should be thought about thoroughly before deciding on an option. During the funding search, the entrepreneur will discover that some options are more secure than others. It is important to make sure that the chosen method of securing capital is the most beneficial. Home equity loans One way in which an entrepreneur can raise capital for their new business is through a home equity loan (HEL). Some conditions must be met in order to qualify for an HEL. For example, the borrower must have collateral in order to secure a loan, a solid credit and cash flow history, and positive financial projections for the new business, amongst other requirements. In a home equity loan, the borrower uses the equity in their home in exchange for a secured loan plus interest. When a borrower fails to repay the loan amount with its accrued interest rates, the ownership of the property gets automatically transferred to the financial institution that provided the loan. Qualified applicants can usually obtain the money immediately; however, home equity loans can be very risky, especially for new businesses. If a new business does not perform well, then the borrower will be at risk for losing both their business and home. In addition, lack of repayment will eventually lead to a poor credit rating, which is often difficult to repair, especially if a borrower defaults on his/her loan. Insurance policy loans Many people with life insurance policies have a cash value to their plan. Often times, entrepreneurs are tempted to borrow against their own life insurance plans because of the prospect of obtaining immediate cash for their new business at low interest rates. The rate of charged interest is highly dependent upon when the insurance policy was initially purchased. Usually older insurance policies have the benefit of offering low interest rates when borrowing against their plans. To qualify, the owner of the policy must be the one to borrow against their policy. In addition, they can borrow no more than 90% of their insurance policy’s cash value. As enticing as this may sound, the prospective business owner should be very weary of these types of loans. One downside of borrowing against one’s own life insurance policy is the reduced amount of benefits in the occurrence of an eventual death. Not only will this loan diminish the amount of the whole policy but loss of interest will occur as well. If premium payments are not made on time, a “lapse” of policy may result, and the borrower may lose his/her life insurance coverage. Lack of payments can also result in IRS problems.
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Retirement plan loans A business owner can also choose to borrow against their retirement plan(s) to benefit their startups. Retirement plans such as a 401k or an IRA may be the solution for many business owners since it is another way to obtain immediate cash. However, retirement plan loans carry plenty of risks, including the chance of the borrower defaulting on their loans. In addition, the defaulted loans and economic hardship withdrawals are both taxed as income and pose a 10% penalty if the borrower is less than 59 ½ years old. Obviously, the danger involved with this practice can be drastic, so the entrepreneur needs to make sure that their new business will be a potentially successful idea in order to prevent the repercussions of non-repayment. Conclusion Looking for funding to raise capital for a new business can be very stressful. It is not only important to explore all options when raising capital but to also consider which option has the most benefit for an entrepreneur’s business venture and way of life. Home equity loans may seem like an excellent alternative; however, if the business fails, then the entrepreneur may end up losing both their business and home. Insurance policy loans may also be tempting, but nonpayment can result in the borrower losing value to their plan and in severe cases, they may even end up losing their entire life insurance policy. If an entrepreneur decides to take a loan against their retirement plan, they will be charged a 10% penalty if they are not of retirement age, and they may even be at risk for default if payments are not made. The most important thing to consider before choosing a funding option is to make sure that a company has the prospect of being successful. If a company is successful, then repayments can be made, and the entrepreneur will not be at risk for losing everything.
Raising Your Startup Capital At The Local Bank Startup capital is one of the most important components of a new business. The key to being able to obtain startup capital not only depends on a valid business idea but also on a well-devised business plan. Such an effective plan is a prerequisite of most lenders and must be presented to potential investors or creditors for consideration. Many potential business owners do not take efficient time in preparing their business plan and, as a result, are at a loss when they are asked when and how the borrowed money will be paid back. It is important, when looking for startup capital for a new business, that the entrepreneur fully explores the various options available. Every potential new business has a variety of things that will tailor what type of startup capital the entrepreneur is trying to receive. Your local bank Many people trying to start a new business will simply visit their local bank to see if there is the possibility of borrowing startup capital there. While a commercial bank loan is not always guaranteed, a local bank can serve as a valuable resource in understanding the startup loan process. In addition to the business plan, things such as the credit history of the borrower, financial projections of the new company, collateral, and other documentation are needed for
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loan consideration. Banks are also known for judging applicants according to their character since it is a professional transaction. By meeting directly with the potential borrower, the financial lender can make a subjective assessment on the company’s founder(s) and/or prospective business proposition. The goal of meeting with loan officers is to obtain startup capital; therefore, first impressions are crucial. When a prospective borrower meets with local bankers, it is important that s/he be prepared to present his/her detailed business plan. The borrower should also be ready to answer all questions that the lenders may pose when trying to learn more about the new business. The entrepreneur will need to sell their business proposal to these people and convince them that it will be a financially successful venture. If this information is not properly conveyed, then the prospective business owner may encounter a high chance of rejection and will not receive the money they need. It is also important to note that even though an entrepreneur may have a solid relationship with a certain bank for several years, they can still explore securing their startup capital at other banks in the area. Bank loan approval Approval of a bank loan may come in the form of a telephone call or a letter through direct mail. Each loan document should be thoroughly reviewed and understood before proceeding to agree with loan terms and signing any forms. It is always a good idea to consult with professionals when accepting an approved loan. In addition, copies of all paperwork should also be made and kept in a safe place for future access. Entrepreneur borrowers are also encouraged to keep periodic contact with their loan officers. By keeping the communication levels open, the entrepreneur will be able to discuss any businessrelated problems and may easily find solutions to those problems. The entrepreneur should also be prepared to make monthly payments with interest and other additional fees that may apply. Bank loan rejection If a prospective entrepreneur gets rejected for a small business loan at the local bank, s/he should not be discouraged. Often times, business owners will get rejected multiple times before a bank will approve them. The most important thing that the entrepreneur can do, when faced with rejection, is to be persistent. They should inquire about why they were rejected, work diligently to make those changes, and then reapply at another bank. While the rejection process may seem rather perpetual and redundant, others will simply obtain funding elsewhere, including from the collaborative efforts of friends and family as well as angel investors. Conclusion Raising startup capital at a local bank can be an easy process if the entrepreneur is qualified. Certain requirements may apply, including credit and cash flow history, financial forecasts, and a business plan. While there is always the possibility of rejection, the entrepreneur should not be discouraged. They should repair any discrepancies that exist and then reapply for loans at other banks. If approved, it is important that the prospective entrepreneur understands the payment terms and schedule, as well as be prepared to pay for accumulated interest rates and other fees.
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The Benefits Of Finding People Looking To Invest In Your New Business An entrepreneur seeking to raise capital for his/her new business should be aware that there are people out there who are looking to invest. Most commonly known as angel investors, these people are investment professionals who have made it their career to invest in startup companies for a portion of the profits or IPO. Many entrepreneurs tend to shy away from angel investors because it means that ownership of the company and profits made will be shared with others. If an entrepreneur experiences difficulty in being unable to find suitable business capital from other funding sources, then choosing angel investors may be the next viable option to pursue. Benefits of angel investors There are many benefits in having angel investors as part of a new business. The most important advantage is that they provide immediate business capital. In addition, they do not require expensive monthly repayment terms as most traditional lenders. Angel investors understand that a new business will not make money right away; therefore, the entrepreneur will not have to worry about paying exorbitant monthly fees with interest. This is quite a different approach from traditional bankers who expect payment almost immediately. Another positive fact is that angel investors are very business-savvy individuals who do not want to see their money go to waste. They can bring a fair amount of expertise to the table in order to help and guide the entrepreneur and the invested company towards success. When prospective business owners choose angel investors to fund their startup, often times, they do not need other sources of funding since the angel capital amount will usually cover all startup costs. Disadvantages of angel investors Some people do not like the idea of working with angel investors because it often means that they must share ownership of the company with others. Sole proprietorship of a new business is something that new entrepreneurs may desire; however, they must reconsider, especially if they are interested in seeking angel capital. When investing in a company, angel investors often expect a percentage of company ownership, stock options, a board seat, and a large ROI. These demands are quite reasonable for the angel investor since they are putting their own money at risk when they invest. An entrepreneur must also take the time out to find the right angel investor because inappropriate selection may very well lead to problems. For example, an entrepreneur may choose an angel investor who does not have experience in the company’s field of industry or one who is not actively involved in regular company operations. These scenarios can mean trouble, especially if the new company needs guidance during its crucial early stages of development. In addition, an entrepreneur may choose an angel investor that is too controlling, which may lead to resentment and possible company failure. Before approaching an angel investor for funding, it is critical that prospective business owners complete their share of due diligence, learn about angel investors and the companies they have invested in, and understand their personalities. Conclusion Angel investors provide an excellent means for entrepreneurs who seek capital for their startups. Not only do they bring immediate business capital to the invested company but they also provide
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experience and expertise in making the new company very profitable. For those who are not opposed to sharing ownership of a company and agreeing to special terms, then angel investing may be considered a good option in order to raise the required startup capital.
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Which option IT Consultancy should go and Why?
Deciding On Whom To Ask For Funding After initially investing personal funds for a new business venture, entrepreneurs will often resort to their next option for raising capital, namely their family and friends. However, this may not be as easy as it sounds. An entrepreneur seeking startup funding cannot simply ask their family members and friends for large amounts of money. Instead, the correct way of going about asking for startup funding is by developing a business proposal and presenting it to the family members and friends whom they are planning to ask. By being prepared in this manner, the entrepreneur will be able to gain credibility from others and show just how serious they truly are about their business ideas. Making a list Most entrepreneurs initially believe they do not have many family and friends to ask for startup funding. However, once they compile a list of all relatives and friends, they will be able to see that they actually know more people than they had initially thought. At this stage, the entrepreneur should not limit the list to those that s/he thinks will be the most likely individuals to invest capital in the new business. Therefore, they should brainstorm with close family and friends on devising a list themselves. This list should include the names of acquaintances and friends they can think of in the present and past. By creating a list and asking others to make one as well, the entrepreneur will increase the number of contacts who could be potential sources of funding. Organization of the list In the list of names, the “inner circle” should include those with whom the entrepreneur has the closest relationship. This can comprise of parents, in-laws, uncles, aunts, grandparents, and best friends. The middle tier should consist of people with whom the entrepreneur has had a bit more distant relationship with but whom they have regular association with. The “middle circle” of acquaintances can be neighbors, delivery people, attorneys, and friends of friends. The outer layer of the circle should include names of people that the entrepreneur has not kept in touch with over the past few years but has shared a close relationship at one time with the entrepreneur. These people can be past business partners and associates with whom they still have a good standing relationship with.
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Narrowing the list Once a list is compiled, the next step in approaching family and friends for capital resources is to narrow the list. The need to narrow a list is necessary since it will only include people whom the entrepreneur knows have the proper finances to make such an investment. Each name should be weighed according to the person’s accountability since it would be pointless to ask individuals who have no money or who are distant in relationship to the entrepreneur. The confined list should comprise only of the individuals whom the entrepreneur trusts well and is responsible enough with providing the necessary funding for the new business. Send out a letter Once the names have been short listed, the entrepreneur needs to formally go about the request for funding. One way of asking for funding is by devising a letter that describes the new business proposal. This letter should then be sent out to family and friends through direct mail. By taking the time out to write a letter describing the business proposal and asking for financial support, the prospective business owner makes a more personable and professional funding appeal to his/her loved ones. Follow-up Once a letter to family and friends has been mailed out, the prospective business owner should follow-up with everyone they have asked. This can be done via telephone, e-mail, and even through post cards. For those who are interested, entrepreneurs need to send out a more detailed business proposal and a financial agreement that promises to pay back the amount owed. The latter is extremely important for family members and friends because it is a contract between all parties involved on how and when the borrowed money will be returned. If an entrepreneur follows these rather easy steps, then asking their family members and friends for startup funding can be an organized and easier process than one may have initially thought. Conclusion When asking family and friends for funding, an entrepreneur should follow some steps in order to make the process easier for all parties involved. First, they should compile a list of all possible contacts with whom they could possibly ask for business capital. Once the list is refined, a formal business proposal should be mailed out to each contact and followed up soon after. For those parties who are interested in financially supporting their loved one, a contract should be made regarding the entrepreneur’s intent to pay back the borrowed money.
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Objective And Scope of the study:
1) To understand and to know various Fund option available to start up new Business 2) To know the best options of Fund available for the Business 3) How to manage and setup new business or Raise fund for the business
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Recommendation :
1) Choose best Fund option for their business 2) For startup invest capital from Savings and partner saving option
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Conclusion:
Many entrepreneurs start their new companies with the intention of commercializing creative business models and innovative ideas. In a strong sense, many of these startups are high tech and have become a platform in which new business owners can offer simple prolific solutions to existing market problems. Entrepreneurs who wish to launch such high tech startups should always be aware of any emerging technologies, so they can try to commercialize and market those ideas.
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Bibliography:
? ? ? ? ? ? ProQuest : search.proquest.com/business Entrepreneur : http://www.entrepreneur.com/howto/raisemoney/index.html Go4Funding : http://www.go4funding.com AWB : http://www.apnawebsitebana.com/ MostlyBlog Apple Lover
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