Unless you’ve been living under a rock for the past decade, you must have come across at least one article preaching the gospel of starting an online business. Now, unless you were born into 3rd generation family wealth, chances are, you must have bought into that particular gospel. The reason for this is simple.
Online businesses or startups have evolved from being mere hobbies to becoming one of the surest paths to financial independence. And so armed with your billion-dollar idea(s), you set out to create the next big online business. But like many others before you, you hit one small snag. One which has plagued business enterprises for as long as we can remember. The problem of funding.
As you must have guessed, lack of funding for online businesses or startups is perhaps more detrimental than outright failure in the business itself. This is because while entrepreneurs may learn from their mistakes and bounce back, those who lack funds never get the chance even to start. And so, they’re deprived of the extra income and business experience, and the world, of the next big thing since Facebook.
So, we come to the big question, how do you raise funds for your online business or startup?
Fundraising 101
While the traditional methods of raising funds for your business are still valid, there are more creative ways to do so for your business. Below are some of the more creative options for you out there.
1. Crowdfunding
You’ve probably heard a lot about crowdfunding and are probably wondering why it’s on the list. But the truth is, there are few things as creative as financing your business with the help of total strangers who want nothing but your success. Crowdfunding, as the name implies, is the practice of sourcing for funds from “crowds.” Rather than seeking out a single investor, funds are pooled from different businesses and individuals on platforms created for that purpose.
How do you get started? Get on one of such platforms like Kickstarter and pitch your business idea. The more impressive your pitch, the more likely you are to gain support. One of the advantages of crowdfunding is that you retain 100% ownership of the business most of the time, unlike some other options.
2. Venture Capitalists (VCs)
Apart from crowdfunding platforms, venture capitalists are another way to raise funds for your cash strapped business. This is a funding option that sees investors invest in upcoming enterprises that have a high potential for growth and monetary returns. Because of this, this may not be the best option if your business isn’t profit-oriented. Also, your pitch must even be more impressive than would be the case in crowdfunding. Your growth projections and accounts must completely be in order. Now, if you don’t have a good grasp of accounting principles, you can use accounting software to solve all your accounting-related problems.
You must note that unlike crowdfunding, venture capitalists always look for equity shares in the businesses they invest in. And in addition to this, they are also vested in having a say in decision making.
One significant advantage of fundraising through VCs is that you can raise more substantial capital than you would in crowdfunding. That being said, a great alternative to venture capitalists are angel investors.
3. Vendor financing
For those new to the online business world, you probably may not have heard of vendor financing. And that’s simply sad because it is one of the most creative ways to raise funds. It is a goldmine for those who wish to deal with tangible products but lack the capital for inventory.
How does it work? When you need products but lack the funds to purchase them, you can convince manufacturers and distributors to defer your payment till you sell your goods. So instead of the usual 30-day period, you get an extension that can last for months. This naturally would depend on your creditworthiness and, of course, extra fees.
We advise you to explore this option only when you’re sure of the demand for your product and the direction of your product offering. To do this, you would need a product roadmap template to help you forecast your product’s development over time and align it with the expectations of stakeholders. This way, you don’t run into debt trying to cover expenses when you’re yet to make a profit.
4. Purchase order financing
This is another creative means of raising funds for those who deal with physical products. It is used by businesses that lack the cash flow to purchase inventory to meet customer demands. Here, a financing institution pays your suppliers for the products which you sell to your customers. To take advantage of this method, you need to sell finished goods to business-to-business or business-to-government customers with at least 15% profit margins.
Like vendor financing, your creditworthiness goes a long way in your ability to utilize this option. It also helps if both your customers and consumers are well established and trustworthy as well.
One of the many advantages of purchase order financing is that it creates opportunity for revenue growth without the problem of taking on debt or selling equity shares of your business.
5. Microloans
This is a fundraising option usually reserved for non-profit businesses. Here, finance institutions grant loans to startups that do not qualify for bank loans. The loans can be up to $35,000. Examples of where you can get funds via microloans are Patriot Express Loans, groups like Kiva, and the Small Business Administration, which has its upper limit at $50,000.
In conclusion
Funding an online business or startup is by no means easy. In fact, it’s probably the only barrier between you and the financial independence you’ve longed dreamed of. As you can see, however, it doesn’t have to be the herculean task it was ten years ago for the first set of brave entrepreneurs. By using one or more of the methods discussed above, you’re likely to solve most of your fundraising problems. And the best part? You can still combine these creative modern methods with older traditional means like personal savings and donations from family/friends.
You are automatically protected by US copyright laws. You own your artwork and as long as you have not transferred the rights to the designs to the client, you still own them. The only thing you can really do to protect yourself is to place the copyright symbol on each logo and state that these logos are property of your company and may not be reproduced without your permission. If they take your design without paying, then hire an attorney an go after them. One other thing to consider is not doing this type of “spec work”. You are opening yourself up for someone to take advantage of your hard work and not pay you for your ideas. Many clients try to get ideas from designers and go other places to get the work done cheaper. Your portfolio should be enough to let the client know you can do the job. However, I understand that there are times that you need to do this to land a big deal, just be careful.
Getting Clients in Tough Times: Interview with Jason Vaughn, owner of CreativePublc.com
by Sessions.edu
Getting and growing clients can be difficult for designers at the best of times. But in today’s volatile economy, it’s feast or famine. One minute you’ve got swarms of clients, and they’re getting under your feet. Next, you’re running around town trying to find just one of ’em.
Sessions.edu Faculty member Jason Vaughn (developer of the Graphic Design Business course) founded CreativePublic.com in 2001 to give designers tools for the freelance environment. We asked Jason for his tips for client acquisition and the design business in general.
You’re missing out on several big opportunities for improving your business by refusing to spend more of your time online. You should know that there are several good reasons for why you need to consider having a greater online presence.
Find out what these explanations are so you can more intelligently contemplate if it’s the right move for your company. Take the time to educate yourself regarding what the Internet can do for your business and then be prepared to take action. There are quite a few benefits that will come from your efforts in this area that you’ll want to know about as well.
Increase Sales
One reason you should consider having a greater online presence for your business is that you’ll be able to increase your sales. Drive people to your products or services by building a website and selling these items online. You can use a custom website builder to help you establish your existence and then configure your store once you’re up and running. It’s no secret that an increasing number of consumers want to make purchases from the comfort of their own home.
Engage with Customers Regularly
You should also think about gaining traction online, so you can regularly engage with your customers.
How can you do this?
Through your website
On social media
With email campaigns
Use this as an opportunity to build relationships with those who are interested in or already have purchased your products or services. It’s important to always be top of mind with consumers if you want to draw in more business and make a name for yourself.
Outlet for Advertising Products & Services
In addition to regular engagement, you might also want to consider having a greater online presence so you can efficiently and cost-effectively advertise your products or services. The internet is the perfect medium for you to get your brand message across quickly and clearly without even having to leave the office. It’s also a way for you to get in front of your target audience without being pushy or intrusive.
Brand Building
A great strategy for building trust with your customers is to have an online presence so they can check you out and get to know you better. For example, having a long list of positive customer reviews will help you gain respect and entice consumers to want to do business with you. The more they see you in a positive light, the more likely they’ll be to want to work with you later. You can also use your blog to showcase your knowledge and share valuable information with your audience.
Conclusion
You should now have a better understanding of why you need to get your business in the online space. You’re missing out on a lot of chances to connect with your customers if you choose not to engage over the Internet. Give some or all of these ideas a try and see what works best for your business so you can proceed accordingly.
Great web design is sometimes unfairly brushed off as a luxury only huge brands can afford to carry out successfully. Companies with generous design and marketing budgets usually do take full advantage of their options and provide users with great online experiences.
However, although it may seem like this is a major league game, even simple web design tweaks and investments can result in huge payoffs. In this article, we’ll explore how several companies managed to increase their revenue and conversions by implementing some of the current web design trends. The following case studies and tips based on research compiled by DesignAdvisor help illustrate the power of good web design, and how any business can wield it.
Make your site easy to navigate
The percentage of sales lost because customers can’t find what they require on a website goes as high as 50%. Nowadays, users online are accustomed to finding what they need quickly and easily so navigability is key. By improving their site’s architecture and ease of navigation, Botanica managed to increase sessions by 78%, page views by 102% and organic search traffic by 55%.
Provide easy access to information
A site’s search functionalities can help users find what they need in case they are unable to do so merely by browsing. If a search function in not implemented correctly or worse, missing entirely, the user’s overall perception of a website and the quality of their experience is likely to be negatively impacted. 60% of the time, when users can’t find information it’s due to poor search functionalities.
In the case of Volleyball BC, the sports site managed to increase user engagement by improving their search options. They implemented an advanced filtering system for searching results by game and team as well as searching events by location. As a result, the site saw a jump of 28% in visits and an increase in social referrals of over 500%.
Don’t forget about mobile devices
As more users migrate from laptops and desktops to mobile phones, companies failing to update their design to enable responsiveness to mobile devices are bound to see some adverse effects. Almost half of all users will take the fact that a website does not perform well on their phone as a sign that the business associated with it just doesn’t care enough.
HMT updated their site to fit mobile specifications and increased their monthly revenue by 159%; merely by introducing responsive web design, time spent on the site increased by 60%.
Speed up
Almost 50% of users think that a site should take no more than two seconds to load, and investing in meeting these expectations can have some very positive outcomes for a business. Allowing users to get to where they want to go faster helps you sell products and services. Shopzilla increased its conversion rate by 7-12% by simply getting their site to load 5 seconds faster. These small tweaks can clearly have significant impact on your business.
Check out plenty more trends, case studies and resources in the infographic below.
Just a quick blurb about a book I recently checked out. The“Designer’s Survival Guide”is a really good read, what I liked most about this book was its collaberation between several creative professionals, so you get a good amount of content based on their experinces. I would highly recommend this ebook and am sure my site readers would enjoy it as well.
The book contains lots of useful content such as:
– Writing Press Releases
– SEO TIps
– Web Design and Development Tips
– Color Calibration
– Package Design
– Logo Design Process
– Transitioning Into Your Own Business
– and so much more.
Avoid these 7 surprising “critical” firm killers and success for you will be just around the corner.
1. Thinking that just being a “great designer” alone is going to make your design business successful
The biggest misconception is that being a “great designer” is enough. What is critically more important is marketing and your relationships to those you market to. You could have a bunch of dead-beat clients who are “one and done” who do nothing but penny-pinch and are never seen or heard from again (unless it’s the next “emergency”).
These are the clients you do NOT want. What you do want are the steady, high-value, repeat clients who are willing (and pre-disposed) to referring others to you and who know the value of design and are WILLING to pay for it.
To accomplish this you need to have a “system” in place to attract new clients and a system to continue an ongoing relationship with them (via a newsletter, fax updates, tele-seminars, etc) The good news is once you HAVE a PROVEN system in place you can get be free to create “great design”
2. Believing all you need to do is “get your name out there”
What does that mean exactly, “Get your name out there?” Well, I know it means paying a lot of dough to have “brand advertising” or “brand awareness” Of course when you are in the design business that is all you see – it is everywhere. But it rarely works for the freelancer and small design studio owner. It just sits there likely a moldy blanket gathering dust and moth balls.
So allow me to suggest direct marketing. I know this is “taboo” in the design world but I KNOW it works. With DM you receive instant feedback on your campaign as to whether your marketing is working or not because it DIRECTLY asks for the user to take action through creative offers, guarantees, attention-getting headlines, emotional copy, multiple bonuses and more. With DM you ONLY pay for direct RESULTS.
Bottom line is we want our hard-earned marketing dollars to be efficient and effective. Read the rest of this entry »
