Ezine Riches

With the expansion and diversity of businesses and hobbyists into more and more specialized areas of endeavor, there is an increasing need for more information.

And newsletters are the high profit way to cash in on that market for specialized information.

You can write and produce your own newsletter with a potential for high returns.

Even a thousand subscribers can bring in impressive earnings.

There are no tried and true methods of making a newsletter successful, but if you investigate the market thoroughly, and are cautious in your moves, you can increase abundance month after month.

You don't have to be a famous business consultant or an insider on the stock market to produce a newsletter. There are many that cater to all types of sports, crafts, health, housing or money making.

The most important aspect of creating a successful newsletter is the market. You need to research who will most likely subscribe. There are sound methods of testing the market so you can be sure to come out ahead and establish yourself in the field.

If you have a special interest that has a broad following, you might find that a newsletter will be readily accepted and flourish.

What interests or hobbies have you been involved with that can make a lively income for you?

If you follow these steps and carefully consider your market, there is no reason why you can't get into the newsletter business too!

Elements of a Good Newsletter-

A good newsletter is a special timely report on a single subject; with high-quality content and a humble resource box at the end.

It is a personalized, concise statement from an expert or person thoroughly familiar with a specialized field. High quality, content-rich material with virtually no advertising is the key.

The specialized information in newsletters is current, and ideally cannot be found elsewhere. They are a logical extension to a trade or hobby.
Aimed at a select group, they often contain inside information in the field, hot tips, humorous anecdotes or news scoops.

Newsletters are not meant for the mass market. In fact, the average number of potential readers of newsletters in any one field is relatively small.

With all the print media and visual communications in this country, you might think there is a saturated market. And that is true when it comes to general interest mass market publications.

However, the need for specific information in highly specialized interests or fields is constantly increasing.

The focus of a good newsletter is success:

• Success in business;
• Success in hobbies;
• Success in health and happiness...

The information contained in the newsletters should enthusiastically motivate readers to follow the advice.

Since there is a high standard of competition within every aspect of our modern life; people search for ways to be in the know, and use enjoy using that information effectively.

One of the reasons subscribers remain loyal is because they are receiving superior knowledge and what can be gained by it. If a newsletter saves a subscriber thousands of dollars via excellent advice, then it is well worth the subscriber to purchase from you!

People tend to go with what they know.

So if you win the trust of your subscribers by constantly delivering outstanding value, they will naturally equate that to your offerings and business ethics, as well.

What It Takes-

You can start a newsletter by yourself; A desk at home, a computer, Open Office and a good list manager or autoresponder program/service are all the basic tools you need.

You don't need to invest a lot of money to begin a simple newsletter. You may need to put a little out for Web hosting and advertising to introduce your product.

An impressive amount of exposure can be had by deftly JV'ing with other complimentary publishers/List Masters.

If your 'zine is truly quality information and your subscription list builds properly; you'll be able to earn back your initial investments quickly- with plenty left over-

Everything beyond that is pure profit!

What To Write About-

The topic you choose absolutely must be your ultimate interest.

You'll be living with it day in and day out for years, so you need to be passionately devoted to the subject.

Usually, it's not hard. You probably already have a chosen field of endeavor, or have developed a keen interest in a special hobby or sport. Writing a newsletter is only one more way to demonstrate your vast knowledge and interest.

Study any newsletters within your interest you can find. You might want to talk to the publishers of a few to find out how they started and what troubles they encountered.

Consider JV'ing with them or paying them a consulting fee to help you get on your way. Take a look at all the trade magazines of the topic you'd like to work with.

Keep up with the current trends in health, money, sports, or social events and styles. What's new with the young people? Or the elderly? There are many retired people actively pursuing hundreds of various interests. How can you tap into that market?

Studying different publications and writing styles will inspire you in designing your own content.

Getting Input-

The first place to test your newsletter is with associates and colleagues. What do they think about your ideas? The target you're aiming at is simply, anyone who will benefit from the information you have.

Not only are people in a specific profession hungry for news, but there are people in all sorts of hobbies seeking specialized knowledge. Everyone is interested in making or saving money.

Extremely successful topics are new trends where people can't get enough information. Manufacturers, advertisers and entrepreneurs are all searching for the new to exploit. Depending on the subject you choose, tap into those potential subscribers.

Design Considerations-

The title at the top of the newsletter is the most visual aspect of the publication. It reflects the content and it reflects you. The best name for your newsletter is the same as your domain [U.R.L.] name.

Make up a few titles of your own:

• How do they compare with the titles of other newsletters?
• Which rings true for your enterprise?

Check at the library to be sure your title is original and doesn't duplicate other publications currently on the market. The title is your trademark [logo].

Since your newsletter is vitally important as a means to generate on-going income, it would be worthwhile to have it designated a ISSN- absolutely free- which is the electronic equivalent of an ISBN for a hard copy document.

Not only does this legally protect your news-letter with the Library of Congress, it also ads a very professional touch!

You can download the PDF form at http://lcweb.loc.gov/issn/

The logo can be very simple.

Another aspect of the title at the top of the publication is the date and the issue number. These should be considered in the original design.

Start out with one color and keep it as homespun and fresh as the news you'll publish. Avoid fancy type styles or those that are hard to read. And don't go overboard with a clever or cute design.

Something simple and clear is what you're after, so an elaborate logo may look out of place. Since a newsletter has timely information, the date of the issue should be easy to find.

A superb example of a content rich, topic-centric newsletter, with an ultra-crisp layout:

Johnn Four's Role Playing Tips Weekly at http://www.roleplayingtips.com
This man knows how to put a consistently excellent quality e-zine out!

Any graphics should be kept minimal and simple, but don't be afraid to use subheads- as well as liberal use of bullets- to break up the copy.

A few words capitalized or in a larger or darker print help the reader identify the information, and make it easier to read.

Keep enough white space to encourage reading, but fill the pages to make the subscriber feel the newsletter fulfills its
promises.

What To Include-

Consider a copy format that is divided by types of information.

For example, you can have a section labeled profiles, another on upcoming events. Perhaps you have a calendar of shows, conventions, or seminars that would concern readers.

There might be sections on various industry policies or unwritten rules. Past events and history are always good fillers. And don't forget humor.

Although your newsletter is serious, potent information; no field of endeavor is without its light side.

Don't lock yourself into a format you can't always fulfill.

Rather, have these sections available for you to use or not as each issue is written. And always include subscription information. Your own news-letter is the best way to sell more.

Also, if your 'zine is going to be e-mailed out resist the temptation to use html; straight-text only.

That is- if you want a 100% consistency, 100% of the time; regardless of the reader's e-mail client.

One more thing-

Do not let your lines extend past 60 characters. Use a guideline, such as this, and hit enter after each line {turn word wrap OFF}:

---------1---------2---------3---------4---------5-----****6


Finding the News-

Your first few issues probably won't lack for information. But after that, you'll need renewable sources of copy. What's new in the industry or hobby? Your associates, colleagues or fellow hobbyists are the prime source of undercurrents in the field you write about.

Make contacts with freelance writers-

There is a myriad of folks who will gladly allow you to use their material- free of charge- for kudos. They'll be invaluable for constantly acquiring new information.

But keep in mind that high quality skills and expert knowledge usually cost.

Perhaps you can work out a JV deal [sch as a profit-sharing financial arrangement] with insiders for important information you want to include.

Interviews are important ways to get vital information.

If you can't contact the people in the high places, such as presidents or directors-

Their assistants can be just as- if not more than- valuable in acquiring information.

New trends are found by talking to the workers, or the participants.

An employee might describe the wonders of a new machine; an athlete may praise some new equipment. And you don't have to travel to see these people. A good phone voice or well thought out e-mail can unlock many doors.

Don't Overlook The Obvious-

Public relations people have a lot of information to disperse. Creating a good rapport with a P.R. person can get you constant timely advice and specialized information.

Talk to people who have nothing to hide.

Secretaries often know more details than their bosses. And they usually aren't told to keep projects secret. What they know can fill pages- if not volumes- of newsletters.

Follow up on the articles presented in the trade publications. You might be able to use some more in-depth aspects of the same topics they publish.

Can you talk to the people they interview [i.e. A follow-up interview]?

Perhaps you can critique some controversial subject and allow folks to present an agreeing/opposite opinion [superb blog/forum tactic for driving phat Web traffic].

The newsletter is a personal forum, which means that you can give your personal comments and opinions on anything. However, they can't be egotistical or narrow-minded, or you'll quickly lose subscribers.

Trade shows and conventions are your gold. Every person who displays or attends the show is interested in the subject. You could virtually interview everyone and get a complete overview of the industry.

If you are working with a sports topic, meets and events are the place you need to be. Talk to people who arrange them and the broadcasters- they have a lot of background knowledge.

You might be able to feature events regularly in the newsletter:

• What events happen in their towns?
• If you are writing about an industry, where are the main
• manufacturing plants?
• Have their local newspapers written about public opinions about those plants, such as pollution or high employment?
• If you have a topic that requires a certain environment, how do the local towns cater to the enthusiasts - especially during a
• main event?

Writing Copy-

In your publication, you are the authority.

Use strong, direct statements with an active voice. Although you are often offering opinion, the content should be useful.

Naturally assume that your readers are intelligent; and expect you to back up your statements with sound research.

A rule of thumb is that three concurring sources make fact.

Although you don't need to be a polished writer, your copy must be easy to read and understand. It should be exciting; filled with lots of tasty morsels of information.

The main thrust of the newsletter is enthusiasm. Your subscribers are into the subject you are writing about. Don't be afraid to let them know you love the topic as much as they do. Go ahead- get excited!

If you have chosen a technical subject, you'll need to be an expert in the field. If you are not, have somebody you can call at any time to confirm fact. After all, your newsletter is geared towards enthusiasts and experts, so you have to pull through.

The success of the newsletter lies with the quality of information you have. Not just the quality of writing- the information itself.

If a reader can review an entire copy and say, "I know that," you're not coming through with inside information or new trends.

Quality is the core of the newsletter, and should be the core of your own interests. That is why you have a unique knowledge to offer, and why your newsletter will be successful.

What Interests You?

You are the best judge of lively topics, and are the best critic of the newsletter. If you subscribed to this
publication:

• Would this be what you'd expect?
• Are you delivering the full potential of the subject matter?
• Is the information practical?
• Can a person reading the newsletter gain from having acquired that information?

Although you are publishing the newsletter for a select group of people, you should direct it to each individual person.

The personal approach is the best attitude to take in both gathering information and in writing copy.

Since the newsletter is an informal publication, the copy should read informally-

As though you just heard the hot news and are enthusiastically writing for your best friend so that they can quickly profit by it.


How Often To Publish-

There are a lot of factors to consider when deciding upon a publication schedule. The main one is how fast can you produce a newsletter.

Work Backwards-

You want a subscriber to receive the newsletter on a certain date. It needs to be in the autoresponder or mail {hard copy} a few days before that. And before that, how long will it take you to decide on the final layout?

How long will it take you to research and write material for your newsletter?

This may be a deciding factor in the size of the publication.

Perhaps you'd prefer to get a four page newsletter out every week rather than an eight-page newsletter out every other week. If your topic is filled with today's news, then you'll want to get that out to your subscribers as fast as possible.

Other subjects can be done monthly, bimonthly, or even quarterly. Be careful with infrequent mailings, however, because the subscribers
may just forget about it.

And what use is a small newsletter only a few times a year? Keep your subscribers involved and stimulated; deliver the newsletter on a regular basis-

Cordially invite them to participate in your blog or forum, each and every issue!

Give them- absolutely free of charge- the download link to one or two premium info goodies, each issue.

Whatever production schedule you've decide on, commit to it.

Later, when it's successful and you have more people to help you with it, you may step up the production and publish more frequently.

Writing and publishing a newsletter is a challenging and exciting way to express yourself, give you prestige and acknowledgment in the Web Community and allow you the luxury of insanely profitable JV's!

You can start one with virtually no overhead and a small amount of capital, and you can build up to making profits in the five to six-figure bracket.
There are no secrets or special tricks or skills you need.

What is important is coming up with an idea for a newsletter that will appeal to a select group who desires specialized information.

Remember...running a successful 'zine takes guts!

Introduction to Freelance Consulting

A consultant works with the management of a business to improve
the profitability of the business. Working with the top management, you can rest assured the consultant is a very highly paid individual.

Some consultants charge $100 per hour. Others charge $1,500 per day for their services, and still others work on an annual retainer fee of $12,000 to over $30,000 per year from any number of large corporations.

Until a few years ago, the title "consultant" was more or less
limited to retired diplomats and top corporate officers. In other words, until recently, the consultant's position was honorary than actual.

But that has all changed dramatically in the past few years.

The number of consultants for almost any problem in life has
increased by tenfold or more during the past ten years!

And the field of consultants only continues to grow. In fact, independent consulting is one of the fastest growing businesses in the country today!

Reaching for a consultant is an expert at recognizing problems
and shaping solutions to those problems.

The need for problem solvers for business problems- among large and small businesses worldwide- has never been greater.

The ever changing moods of the buyer plus the myriad of crisis situations faced by businessmen almost daily, have created this "seller's market" for the alert consultant.

Another side of this need for consultants is in the case of the
over-enthusiastic entrepreneur who rushes headlong into a business in which he has little or no experience.

Many such dreamers invest their life savings in questionable projects without even considering the idea of bringing in a competent business consultant to analyze and evaluate their plans.

Even experienced people are prone to over-rate their own ideas.

The image of the end result, and dedicated enthusiasm toward the
attainment of one's goal are the prime prerequisites for success.

However unmerited enthusiasm and dedication can also be very dangerous as well.

Unless it is based upon solid research, it may cause people to chase headlong after nonexistent rainbows. And that's where you can fit in as a business consultant.

Sell Yourself-

It is not necessary for you to have owned or operated a successful business to become a successful business consultant. Nor is it imperative that you have been in management or have held a titled position.

You will, however, need the ability to sell yourself, and an up-to-date understanding of the area in which you intend to assist others.

The first step is to make a honest evaluation of your own training and experience. You might be an ambitious tax consultant who was never recognized for your abilities.

You might be especially good in such areas as:

• System Design;
• Marketing;
• Scheduling;
• Expediting;
• Productivity...

There are hundreds of consultants across the country specializing in Direct Mail and Mail Order operators. Most of these people enjoyed some measure of success in those fields, and then discovered the easier way- advising others on how to operate successfully.

There are consultants for people who want success with a garage sale, party planning merchandising, or even multi-level operations.

The important thing is to choose an area in which you've had some experience; an area that you have spent sometime learning about; and of course, an area of work that you enjoy.

Almost everyone is afraid of the responsibility involved.

They claim they don't have the experience or the knowledge. Such was the case of a young lady we know who was seeking work as a personal clerk.
She had worked five years as assistant to the personal manager of a large manufacturing plant.

Yet- when we advised her to become a consultant to people looking for work or to start her own resume writing service- she pleaded lack of knowledge, experience and ability.

Just about everyone has had special training in a certain line of work, and they've gone on to absorb special studies or education along the same lines, and most people have worked all their lives along or very close to a specific line of endeavor.

So, why shouldn’t a woman who has worked 20 years as a waitress represent herself as a consultant to the training program for waitresses within a restaurant organization?

A shipping and receiving clerk would be a natural for setting up efficient operations and for solving problems for businesses just beginning or expanding production output.

The point is, most people don't realize how much expertise they
really have, or the probable marketability of their training,
knowledge and experience.

The important thing is to:

• Look over your educational strengths;
• Combine these with any special training or on-the-job experience;
• Offer your expertise to help others with their problems along the lines you know best.

Start-up Considerations-

You don't need a big, fancy executive type office in order to get started, especially if you start your consulting business on a part-time basis.

A spare bedroom, a section of the basement, or even a corner of the dining room, will do very nicely.

If you handle your own bookkeeping/filing, you will need a ledger of some kind, and a file cabinet or two. You will need a good printer if you plan to do your own correspondence.

An alternative is to do all letters, etc. in longhand and hire someone to put them in final form for you. Check the local high school or college. They may be happy to post your ad for a young lady looking for part-time work.

Instead of going to the expense of paying for a business phone,
use your residence phone and train all members of the family to
answer it in a business-like manner during normal working hours.

Save copies of all the sales letters you send out, and of course, all job proposals you submit.

Set up your file system with your final plan in mind, and you'll save a lot of time as well as frustration.

Get the kind of file folders that hang from the sides of the file cabinet's drawers, allowing you to position the file folder title anywhere across the top of the folder.

Then as you add clients to your file, you can keep them in order without a jumbled-looking file drawer in which you have to search for each title.

It's also a good idea to keep your active accounts in one drawer, your “hoped-for” accounts in another-

And master copies of all letters, proposals, business contact information and records in still another drawer.

You'll also need business cards.

Your nearest quick print shop can usually order these and help you in selecting wording and design.

Whether to rent, lease or buy a copy machine is up to you, but virtually no business can get by without file copies.

Carbon paper means a loss of efficiency, and running over the corner shop to get copies is going to cost you time and money, so be sure to fit some sort of copier into your business start-up costs.

If impossible at the very first, use the old carbon paper- you must have a copy for your file.

If you type at all- there will always be at least a few letters that you should type personally- we suggest again that you go for the long haul probabilities and rent, lease or buy the best and most modern [laser] printer you can afford.

Later on, when you do move into that "dream" office; that will be one less piece of equipment you will have to be concerned with.

Get the Word Out-

One you've decided what area of business consulting you want to
be in, and have your office or working space set up, the next
thing is to let people know you're available for work.

Definitely use some common sense and applied knowledge before spending any money on advertising. Generally speaking, you will pick up some customers regardless of the problem area you specialize in, by advertising in your own area's most popular newspaper.

However, we wouldn't recommend much more than a small ad in the Sunday editions, unless you're in direct mail, MLM or a garage sale consultant.

Check with your Chamber of Commerce for a list of trade and specialized business publisher in your area. Either pick up a
sample copy of the business journal at the local newsstand or
write to the publisher and ask for a sample.

Look through those catering to the type of business you want to serve. Check the editorial styles and types of advertising they carry, then select the one that corresponds with your needs.

Basically, unless a publication reaches the people you are trying to sell to; don't advertise in it regardless of the style, quality, or advertising rates.

Radio or television advertising would probably be a complete
waste of advertising dollars, unless you're offering help with
direct mail, multi-level marketing or garage sales.

The best time for any broadcast advertising in order to reach your best prospects seems to be in the evening hours after the late-night news, when these people are either still laboring over their special projects or relaxing before going to bed.

If you do use broadcast advertising, the commercial is very important. Really concentrate on this, and use lot of common sense in writing the message.

Even if you engage the services of an experienced broadcast copywriter-

Make sure the message speaks to your potential customers, and convince them that you can help solve their problems or improve the profit picture of their business.


Where to Advertise-

Go with a quarter-page ad in the yellow pages of your telephone directory. The space salesman will help you with the ad, but remember, you want it to catch the eye of your particular client,
and offer a promise of an end to her problems.

Always talk to your kind of people, emphasizing the benefits of your services. It's not good practice to quote or even discuss prices in either you advertising or on the phone when people respond.

Always get name, address and telephone number, then explain your services in general. Set up an appointment to look over their operation, analyze their needs, and make a written proposal to solve their problems.

There may be a number of factors involved in establishing your fees, but starting out with beginning and small businesses, and until you line up 50 regular clients, your best bet would be $50 per hour.

Count on two to three hours per client per day, and devoting 10 days per month to work on their needs, you're talking about $1,000 to $1,500 per month from each client.

Multiply that times 50 clients, and you'll be grossing $5,000 to $7,500 per month. As a one-man operation, you'll be plenty busy.

Insiders in this business say a person can leave his regular job on Friday, start a consulting business on Monday, and within six months, have an income of more than $100,000 per year.

Suffice it to say that a beginning business consultant should earn from $30,000 to $60,000, before taxes and office expenses, in the first year of business.

There’s still another very important method of finding new clients, and that is via Direct Mail solicitation. This is done either by postcard or sales letter mailings.

Your postcard solicitation should basically be an elaboration of
your printed advertising. In other words, an ad for a Direct Mail Consultant might be transferred to a post card along these lines:

ARE YOU HAVING TROUBLE GETTING RESULTS
WITH YOUR DIRECT MAIL BUSINESS???

I can help you double to triple even triple
the response from your mailings, expand your
market and increase your profitability! Call
now, and discover what I can do for you!

After the message on the postcard, add your telephone number and your name, followed by your identification as Direct Mail Consultant.

A direct mail solicitation sales letter simply uses more words than the postcard, reads smoother, and forces the reader to respond as you direct him.

Your Sales Letter-

Your sales letter can be any length needed to tell your story and achieve the objective. To be successful, though, it must embody and follow the "AIDA" form:

• Attention
  
• Interest
• Desire
• Action on the part of the reader.

Another point to remember when writing sales letters:

Always appeal to the needs and wants of the person who's going to be reading the letter. She will start reading to see if your service can benefit her.

She is looking for answers to her most pressing problems. Keep these elements in mind when you write a sales solicitation letter, whether for yourself or for a client.

People receiving sales letter are somewhat more responsive to a
letter that is typed as opposed to one that is typeset. But the
typed letter must be “letter perfect," and not of a different or unusual style of type.

As a consultant your letterhead should be simple while still conveying to the reader a sense of class. Your paper should be the best quality you can afford- not flamboyant, but sending a subtle message of success.

Direct mail surveys show that slightly better numbers of responses are received when a light beige or off-yellow paper is used.

Basically, your letter should do what the postcard does for you- move the recipient to call you and allow you to set up an appointment to discuss her needs as your client.

In Closing-

Whether you're writing an advertisement or a sales letter, it's important that you have the objective clearly in mind- what you want the reader to do.

With this in mind, you needn't use the “hard sell" approach quite as forcefully as someone asking for money on the first contact.

All that's left is meeting with the prospect, listening to her problems, and hearing what he wants, then write out a proposal to solve her problems and satisfy her wants.

This means selling yourself to the prospect- assuring her you know what you're talking about, and that you can make her more successful.

You now have a plan that can lead you to success as a Business Consultant. Remember, though, no amount of research, reading, listening or investment can make you successful until you do something with them.

Action on your part is the absolute ingredients that must be added, and that's up to you. Your future is in your own hands.

Introduction to Franchising

How often have you thumbed through a business opportunity magazine, noticed a franchise opportunity advertisement, and felt you'd really like to get in on that...

If only you had the money?!?

If you're like most who are seeking greater opportunity and wealth, this probably happens with you more often than you care to admit [except perhaps in strictly private conversations].

When the average person sees one of these opportunities, or comes up with a similar idea of his own, the problems of start-up capital may seem formidable.

But in reality, they may not be. In fact, just about anyone with a good credit record and an "insider's sense of business" can get the capital he or she needs, whenever it's needed.

The secret is in knowing how to put together a proper proposal, and to present it to the right person.

The first thing you're going to need is a complete business plan.

This is a complete and detailed description of exactly how you intend to operate the proposed business. Your business plan should detail precisely:

• The product or products you plan to seek;
• How you're going to produce or manufacture the product; your costs (inventory costs if you're purchasing them from a supplier);
• Who is going to sell those products for you; how they're going to be sold;
• The attendant costs;
• When you expect to recoup your initial investment;
• Your plans for growth or expansion;
• The total dollar amount you're going to need to make it all work according to your plan.

Your business plan must be detailed- complete with projected income and expense figures- through at least the first three years of business.

Now, assuming you have your business plan all worked out, put
together and ready for presentation with your request for capital.

Let’s talk about your capitalization proposal.

First, keep in mind that whenever you ask somebody for money, whether it's for a small personal loan or a large amount of money to finance a business, you're involved in a selling situation.

You have to prepare a "sales presentation" just as if you were getting ready to sell an automobile or refrigerator.

Within this sales presentation you must:

• Have all the facts and figures;
• Anticipate the questions and the possible objections of the prospective lender with answers/explanations;
• Package it as impressively as you would yourself for an audience with the president of IBM or General Motors.

The more money you ask for, the more "in-the-know" will be the people you want to borrow from, and so the more detailed and organized your proposal must be.

This shouldn't cause you too much worry however, because you can hire a CPA to help you put it together properly, once you've got the facts and have a business plan he can work from.

Look at it this way-

The more money you request for your business, the more your lenders or prospective investors are going to want to know about you, your planning, and your business.

They want to:

• Be impressed with the fact that you've done your homework;
• See that you've researched everything and documented your facts and figures;
• Be assured by your presentation that investing in your business will make money for them.

It's just that simple at the bottom line.
Unless you can instill confidence in them with your business plan and loan or investment proposal, they're just not going to give much [if any at all] positive thought to your request for capitalization.

So you'll need a balance sheet describing your net worth- the worth of what you own compared to the amount of money you owe.

You'll also have to prove your stability and money-management talents relative to how successful you've been in paying off past obligations.

If you have had credit problems in the past, get them "cleaned up", or at least explained on your file at your local credit bureau office.

Under the law, credit bureaus are required to give you all the information they have about you in their files; and it's your right to correct any errors or enter explanations regarding negative reports on your credit.

Do this without fail because prospective lenders or investors will definitely check your credit history!

So, now you have:

• Your balance sheet prepared;
• Your credit history organized in a light that's favorable to you;
• Your business plan (with costs and income projected over the coming three years).

You are ready to start looking for lenders or investors.

Almost all franchisers offer help in setting up with one of their franchises. Most will go out of their way to assist you in getting the financing you need.

Some will lend you the entire amount, with payments coming out of the income they expect you to make from their franchise operation. Many will carry this loan themselves, while others will carry part of it and find you a lender to finance the remainder.

Franchisers have two objectives in mind when they offer franchises to the public:

• They are trying to expand their operation, thus increasing their profit;
• They are trying to raise capital for themselves.

Generally speaking-

If you have a good credit history, and if they feel you have the necessary business personality to achieve success with one of their operations, they'll do everything within their power to get you in a franchise outlet.

Keep this in mind the next time you see an advertisement or a promising franchise opportunity requiring a substantial amount of cash outlay. You don't necessarily have to have all the money. They want you, and they'll help you!

Many people seem to be unaware that most of today's largest corporations started on a shoestring- on borrowed money- and leverage.

Many people seem to feel that unless they've got it all "in hand" in savings, then they'll have to keep plugging away until they can save up enough to take the big plunge.

Nothing could be farther from the truth.

Look to your family and friends for financial help. Approach them in a business-like manner; tell them about your idea or plans, and ask them for a loan. Agree to sign a formal statement to pay them back in one, three, five or ten years, with interest or equity.

When you have your proposal assembled, you strongly consider a L.L.C. or even a JV Partnership arrangement as a way to finance your project.

In any kind of partnership, each partner shares in the profits of the company, but in a limited partnership, each person's loss liability is limited to the amount of money he initially invested.

The truth is, in this kind of situation- you'll be doing all the work and sharing your gain with your partners; but then it's a fairly sure way to obtain needed financing.

Another common method of obtaining business financing is through
second mortgage loans on a home or existing piece of property.

Say you purchased a home ten years ago for $35,000, and today the assessed valuation is $85,000, with a mortgage of $25,000 still outstanding. A lender may consider your home to be security or collateral for a loan up to $60,000.

In many instances, this is the easiest and surest way to getting the money needed for franchise or other business investment.

And, it makes sense; you've got "net worth" available that is doing nothing but sitting there. Take this equity and invest it in a worthwhile business, and you could double or triple your net worth each year for the rest of your life.

The important point here is that all business opportunities involve risk and sacrifice. It's up to you to determine the feasibility of your success with your proposed venture, then decide on the best way possible to proceed.

In every instance where you run into reluctance on the part of a
lender to lend you the money you need, explore the feasibilities of "two-name" or "co-signed" loans. You can have the franchiser sign with you, or one of your suppliers, a business associate or even a friend.

Oftentimes you can borrow or rent collateral such as stocks, bonds, time certificates, business equipment or real estate, and in this way give greater confidence to the lender in your abilities to repay the loan.

Whenever you can show a contract from someone who has agreed to purchase a certain number of your products or services over a specified period of time-

You have another important piece of paper that most lenders will accept as collateral.

Still another possibility might be to get a bank or a firm that has loaned you money in the past to guarantee your loan. They simply guarantee that they'll lend you money in the future if ever the need should arise.

Going straight to your neighborhood bank, applying for a business loan and walking out with the money is just about the most unlikely of all your possibilities; hitting a big lotto has a better probability!

Banks want to lend money, and they must lend money in order to stay in business-

But most banks are notoriously conservative and extremely reluctant to lend you money unless you have a "regular income" that "guarantees" repayment; or a co-signer that can do the same.

If and when you approach a bank for a business loan, you'll need all your papers in order:

• Your financial statement;
• Your business plan;
• Credit history;
• Market research;
• And all the endorsements you can get relative to your succeeding with your planned enterprise.

In addition, it would be a good idea to take along your accountant just to assure the banker that your plan is verifiable.

In the end, you'll find that it all boils down to whether or not the bank officer studying your application is sold on you as a good credit risk.

Thus you must impress the banker - not only with your proposal, but with your appearance and personality as well. In dealing with bankers, never show an attitude of doubt or apology.

Always be positive and sure of yourself [confident]; rehearse until you are!

However, don't come on so strong to them that you're either demanding or overbearing. Just look good, know your stuff, and project an attitude of determination to succeed.

Your best bet, in attempting to get a business loan from a bank,
is to deal with commercial banks. These are the banks that specialize in investment loans for going businesses, real estate
construction, and even venture programs.

Look in the yellow pages of your telephone or business directories; call and ask for an appointment with the manager; then explore with him the possibilities of a loan for your project.

One of the "nice things" about commercial banks is that even though they may not be able to approve a loan for your business ideas, they will almost always give you a list of names of business people who might be interested in looking over your proposal for investment purposes.

A lot of commercial banks stage investment lectures and seminars for the general public. If you find one that does, definitely attend.

You'll meet a lot of local business people, some of whom may be able to and interested in helping you with your business plans [not to mention the JV possibilities]!

When you're looking for money to move on a business deal, it
does not really matter where the money comes from, or how it all
comes about.

It's important that you GET the money, and at terms that are suitable to you. Thus, don't overlook the possibilities of an advertisement for a lender or investor in your local papers.

Place your ad as well in national publications reaching people looking for investments. Other avenues to seriously consider are:

• Foundations that offer grants,
• Local dental and medical investment groups,
• Legal investment groups,
• Business associations,
• Trust companies and other groups or organizations looking for tax shelters.

Basically, it isn't a good idea to go to a finance company or other commercial lender of this type for a business loan. The most obvious reason is the high interest rates you have to pay.

These companies borrow money from larger money lenders, and then
turn around and lend it to you at a higher interest rate than
they pay. Herein lies the means by which they make money from
granting loans to you.

The more it costs them to provide the money for you, the more it's going to cost you to borrow their money. The only element in your favor when borrowing from one of these agencies is that most will generally lend you money against collateral other lenders just won't accept.

Insurance companies, pension funds, and commercial paper houses are not too out of sight with their interest rates but they generally will not even consider talking to you unless you're requesting $500,000 or more.

They'll also pretty much require that your business proposal be backed by the best possible plan.

Finally, the bottom line is this:

• You must have a well-researched and detailed business plan.
• You must have all your documents and projections put together in an impressive presentation.

Then you’ll have to be the one who does the final selling of your proposal to the investor or lender.

This means your appearance, personality and attitude:

Because– make no mistake about it- before anyone lends you any sizable amount of money, they're going to want to take a very close look at you personally before they hand over the money.

Actually, the different ways of financing a franchise opportunity are as many and varied as your own creativity.

The sources of obtaining money are virtually limitless, and available to anyone with an idea. One word of caution before you jump into any franchise purchase agreement:

The price you pay to participate in a franchise operation is rarely the total cost involved in getting the business off the ground.

With some franchise operations, you may find other costs such as down payments on the purchase of property, building construction costs, remodeling or site improvements, equipment, fixtures, signs, advertising, and training.

Virtually all franchise deals require that in addition to the purchase price or the license fee of the franchise, you're required to give a certain percentage of your gross business income to the franchiser, plus payments for promotion and administrative costs.

Above all else, before you get involved in a franchise or any business venture for that matter, make sure you've conducted a complete and thorough investigation of the opportunity presented.

If it's a good deal, then go with it.

If you have any doubts or feel as though you're getting in over you head, back off and look around for something not quite so ambitious, or perhaps expensive.

There are a lot of good franchise opportunities and some not so good. It's important that you be sure of what you're investing in, and that you can make money with it.
From there...preparing the proper business plan and the necessary financing- while not always a snap- can be done.

Now's the time to do it.

You Can Negotiate!

Next time you go to borrow money, thrash out the lending terms before you sign. It is good practice no matter how badly you may need the money. Ask to see the papers in advance of the loan closing. Legitimate lenders are glad to cooperate.

Chances are that the lender may "give" some on the terms. Keep in mind also that, while you're mulling over the terms, you may want to get the advice of your associates and outside advisers.

In short, try to get terms which you know your company can live with. Remember, however, that once the terms have been agreed upon and the loan is made (or authorized as in the case of SBA), you are bound by them.

The Loan Application-

Now you have read about the various aspects of the lending process and are ready to apply for a loan.

Banks and other private lending institutions, as well as the Small Business Administration, require a loan application on which you list certain information about your business.

For the purposes of explaining a loan application, this Aid uses the Small Business Administration's application for a loan (SBA Form 4 not included).

The SBA form is more detailed than most bank forms. The bank has the advantage of prior knowledge of the applicant and his or her activities.

Since the SBA does not have such knowledge, its form is more detailed. Moreover, the longer maturities of SBA loans ordinarily will necessitate more knowledge about the applicant.

Before you get to the point of filling out a loan application, you should have talked with an SBA representative, or perhaps your accountant or banker, to make sure that your business is eligible for an SBA loan.

Because of public policy, SBA cannot make certain types of loans. Nor can it make loans under certain conditions. For example, if you can get a loan on reasonable terms from a bank, SBA cannot lend you money.

The owner-manager is also not eligible for an SBA loan if he or she can get funds by selling assets which his or her company does not need in order to grow.

When the SBA representative gives you a loan application, you will notice that most of its sections ("Application for Loan"- SBA Form 4) are self-explanatory.

However, some applicants have trouble with certain sections because they do not know where to go to get the necessary information.

Section 3--"Collateral Offered" is an example.

A company's books should show the net value of assets such as business real estate and business machinery and equipment. "Net" means what you paid for such assets less depreciation.

If an owner-manager's records do not contain detailed information on business collateral, such as real estate and machinery and equipment, the bank sometimes can get it from your Federal income tax returns.

Reviewing the depreciation which you have taken for tax purposes on such collateral can be helpful in arriving at the value of these assets.

If you are a good manager, you should have your books balanced monthly. However, some businesses prepare balance sheets less regularly.

In filling out your balance sheet, remember that you must show the condition of you business within 60 days of the date on your loan application.

It is best to get expert advice when working up such vital information. Your accountant or banker will be able to help you.

Again, if your records do not show the details necessary for working up profit and loss statements,
your Federal income tax returns may be useful in getting together facts for the SBA loan application.

Insurance-

SBA also needs information about the kinds of insurance a company carries. The owner-manager gives these facts by listing various insurance policies.

Personal Finances-

SBA also must know something about the personal financial condition of the applicant. Among the types of information are:

• Personal cash position.
• Source of income including salary and personal investments.
• Stocks, bonds.
• Real estate.
• Other property owned in the applicant's own name.
• Personal debts including installment credit payments.
• Life insurance premiums and so forth.

Evaluating the Application-

Once you have supplied the necessary information, the next step in the borrowing process is the evaluation of your application.

Whether the processing officer is in a bank or in SBA, the officer considers the same kinds of things when determining whether to grant or refuse the loan. The SBA loan processor looks for:

• The borrower's debt paying record to suppliers, banks, home mortgage holders, and other creditors.
• The ratio of the borrower's debt to net worth.
• The past earnings of the company.
• The value and condition of the collateral which the borrower offers for security.
• The borrower's management ability.
• The borrower's character.
• The future prospects of the borrower's business.

What Kinds of Limitations?

The kinds of limitations, which an owner-manager finds set upon the company depends, to a great extent, on the company.

If the company is a good risk, only minimum limitations need be set. A poor risk, of course, is different. Its limitations should be greater than those of a stronger company.

Look now for a few moments at the kinds of limitations and restrictions which the lender may set. Knowing what they are can help you see how they affect your operations.

The limitations which you will usually run into when you borrow money are:

• Repayment terms.
• Pledging or the use of security.
• Periodic reporting.

A loan agreement, as you may already know, is a tailor-made document covering, or referring to, all the terms and conditions of the loan. With it, the lender does two things:

• Protects position as a creditor (keeps that position in as protected a state as it was on the date the loan was made) and
• Assures repayment according to the terms.

The lender reasons that the borrower's business should generate enough funds to repay the loan while taking care of other needs.

The lender considers that cash inflow should be great enough to do this without hurting the working capital of the borrower.

Covenants: Negative and Positive-

The actual restrictions in a loan agreement come under a section known as covenants. Negative covenants are things which the borrower may not do without prior approval from the lender.

Some examples are: further additions to the borrower's total debt, non-pledge to others of the borrower’s assets, and issuance of dividends in excess of the terms of the loan agreement.

On the other hand, positive covenants spell out things which the borrower must do. Some examples are:

• Maintenance of a minimum net working capital.
• Carrying of adequate insurance,
• Repaying the loan according to the terms of the agreement, and
• Supplying the lender with financial statements and reports.

Overall, however, loan agreements may be amended from time to time and exceptions made. Certain provisions may be waived from one year to the next with the consent of the lender.

What Are The Lender's Rules?

Lending institutions are not just interested in loan repayments. They are also interested in borrowers with healthy profit-making businesses.

Therefore, whether or not collateral is required for a loan, they set loan limitations and restrictions to protect themselves against unnecessary risk and at the same time against poor management practices by their borrowers.

Often some owner/managers consider loan limitations a burden. Yet others feel that such limitations also offer an opportunity for improving their management techniques.

Especially in making long-term loans, the borrower as well as the lender should be thinking of:

• The net earning power of the borrowing company,
• The capability of its management,
• The long range prospects of the company, and
• The long range prospects of the industry of which the company is apart. Such factors often mean that limitations increase as the duration of the loan increases.

What Kind of Collateral?

Sometimes, your signature is the only security the bank needs when making a loan. At other times, the bank requires additional assurance that the money will be repaid. The kind and amount of security depends on the bank and on the borrower's situation.

If the loan required cannot be justified by the borrower's financial statements alone, a pledge of security may bridge the gap. The types of security are:

• Endorsers
• Co-makers
• Guarantors
• Assignment of leases
• Trust receipts and floor planning
• Chattel mortgages
• Real estate
• Accounts receivables
• Savings accounts
• Life insurance policies
• Stocks and bonds.

In a substantial number of States where the Uniform Commercial Code has been enacted, paperwork for recording loan transactions will be greatly simplified.

Endorsers, Co-makers, and Guarantors-

Borrowers often get other people to sign a note in order to bolster their own credit. These endorsers are contingently liable for the note they sign.

If the borrower fails to pay up, the bank expects the endorser to make the note good. Sometimes, the endorser may be asked to pledge assets or securities too.

A co-maker is one who creates an obligation jointly with the borrower. In such cases, the bank can collect directly from either the maker or the co-maker.

A guarantor is one who guarantees the payment of a note by signing a guaranty commitment.

Both private and government lenders often require guarantees from officers of corporations in order to assure continuity of effective management. Sometimes, a manufacturer will act as guarantor for customers.

Assignment of Leases-

The assigned lease as security is similar to the guarantee. It is used, for example, in some franchise situations.

The bank lends the money on a building and takes a mortgage. Then the lease, which the dealer and the parent franchise company work out, is assigned so that the bank automatically receives the rent payments.

In this manner, the bank is guaranteed repayment of the loan.

Warehouse Receipts-

Banks also take commodities as security by lending money on a warehouse receipt.

Such a receipt is usually delivered directly to the bank and shows that the merchandise used as security either has been placed in a public warehouse or has been left on your premises under the control of one of your employees who is bonded (as in field warehousing).

Such loans are generally made on staple or standard merchandise which can be readily marketed. The typical warehouse receipt loan is for a percentage of the estimated value of the goods used as security.

Trust Receipts and Floor Planning-

Merchandise, such as automobiles, appliances, and boats, has to be displayed to be sold. The only way many small marketers can afford such displays is by borrowing money. Such loans are often secured by a note and a trust receipt.

This trust receipt is the legal paper for floor planning. It is used for serial-numbered merchandise.

When you sign one, you-

• Acknowledge receipt of the merchandise,
• Agree to keep the merchandise in trust for the bank, and
• Promise to pay the bank as you sell the goods.

Chattel Mortgages-

If you buy equipment such as a cash register or a delivery truck, you may want to get a chattel mortgage loan. You give the bank a lien on the equipment you are buying.

The bank also evaluates the present and future market value of the equipment being used to secure the loan:

• How rapidly will it depreciate?
• Does the borrower have the necessary fire, theft, property damage, and public liability insurance on the equipment?

The banker has to be sure that the borrower protects the equipment.

Real Estate-

Real estate is another form of collateral for long-term loans. When taking a real estate mortgage, the bank finds out:

• The location of the real estate,
• Its physical condition,
• Its foreclosure value, and
• The amount of insurance carried on the property.

Accounts Receivable-

Many banks lend money on accounts receivable. In effect, you are counting on your customers to pay your note. The bank may take accounts receivable on a notification or a non-notification plan.

Under the notification plan, the purchaser of the goods is informed by the bank that his or her account has been assigned to it and he or she is asked to pay the bank.

Under the non-notification plan, the borrower's customers continue to pay you the sums due on their accounts and you pay the bank.

Savings Accounts-

Sometimes, you might get a loan by assigning to the bank a savings account. In such cases, the bank gets an assignment from you and keeps your passbook.

If you assign an account in another bank as collateral, the lending bank asks the other bank to mark its records to show that the account is held as collateral.

Life Insurance-

Another kind of collateral is life insurance. Banks will lend up to the cash value of a life insurance policy. You have to assign the policy to the bank.

If the policy is on the life of an executive of a small corporation, corporate resolutions must be made authorizing the assignment. Most insurance companies allow you to sign the policy back to the original beneficiary when the assignment to the bank ends.

Some people like to use life insurance as collateral rather than borrow directly from insurance companies. One reason is that a bank loan is often more convenient to obtain and usually may be obtained at a lower interest rate.

Stocks and Bonds-

If you use stocks and bonds as collateral, they must be marketable. As a protection against market declines and possible expenses of liquidation, banks usually lend no more than 75 percent of the market value of high grade stock.

On Federal Government or municipal bonds, they may be willing to lend 90 percent or more of their market value.

The bank may ask the borrower for additional security or payment whenever the market value of the stocks or bonds drops below the bank's required margin.