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Home Business ideas, real opportunities, tips, advice, guides and info

Think of this: the road to riches is via entrepreneurship, NOT employment. Winning, however, requires right knowledge, skill and attitude. Let PinoyBOSS be your handy guide to SUCCESS.

 

THE SECRET OF RAISING MONEY
Topics covered:
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	ESTABLISHING CREDIT
	MAINTAINING YOUR CHECKING ACCOUNT
	KEEPING YOUR CHECKING ACCOUNT BALANCED
	HOW CREDITORS RATE YOU
	METHODS OF GETTING CREDIT
	ANOTHER METHOD OF GETTING CREDIT
	PROTECTING YOUR CREDIT
	GET ANY CREDIT CARD YOU WANT
	HOW TO GET A LOAN OFFICER'S GOOD SIDE
	GETTING TURNED DOWN FOR A LOAN
	RAISING LARGE AMOUNTS OF MONEY
	GETTING AN INSTANT LOAN, INTEREST-FREE
	ALTERNATIVE METHOD
	THE CORPORATE METHOD OF RAISING MONEY
	TAKE OVER AN ON-GOING BUSINESS WITH ZERO CASH
	THE CORPORATE TAKE-OVER
	HOW TO CREATE SUCCESSFUL LOAN REQUESTS
	MARKETING PLAN FOR BUSINESS VENTURES
	REAL ESTATE LOANS
	GETTING MONEY FOR VENTURE CAPITAL SOURCES
ESTABLISHING CREDIT
When first establishing credit, there are several things you should do:
•	Open a checking account at a bank. A checking account verifies that you have some dealings in the financial world; mortgage banks will allow almost certainly check how you've maintained it and, most importantly, your average balance.
•	Open as many charge accounts as you can. If any company will ever make you a loan, most likely it is a department store, by means of a charge card -- they know how closely their business is tied to charging. Use the cards liberally, making sure you will be able to pay off the accounts exactly according to the terms.
•	Use a co-signer. This frequently used method allows someone with no credit to get a loan relying on the good credit rating of someone else, say a parent. Banks are willing to risk the loan because the co-signer is just as liable for paying back the money as the true borrow.
•	Use a private loan company. These companies, such as Loan Associations, are more willing than banks to take a risk when lending money; for that risk, they charge slightly higher interest rates. Borrow up to your limit; pay it back religiously.
MAINTAINING YOUR CHECKING ACCOUNT If you have no credit, possession of a checking account is one of the main factors weighed by bank lenders when deciding whether or not to give you credit. Write down all the details of every check you write. This practice can be very valuable during tax time. If some of your checking expenses are tax deductible, note that in your checkbook. You will find duplicate checks very handy. After writing a check and transferring the amount to the register, you should write in the new balance of your checking account. If you do this, you will always know how much money you have in your account. Double check that amount of the check matches the amount you have transferred to the check register. IF you carry a few checks with you, don't forget to transfer the amounts to your check register. Enter all your deposits in your checkbook as soon as you make them. KEEPING YOUR CHECKING ACCOUNT BALANCED You should reconcile your checking account as soon as you receive your monthly statement. Keep your checks in order, preferably by date. Compare each check you wrote with the bank statement. Mark each check off as you go along. Do the same with deposits. Get a check file so you can file your checks by month. If you ever need a canceled check, you can find it easily. Subtract the bank charges from the balance in your checkbook. To reconcile your checking account, do the following: Subtract all the checks you have written that the bank has not deducted from your bank balance (don't forget outstanding checks from the previous month). Add all the deposits you have made that the bank has not credited to your account balance. After you have finished this, your new balance should equal your new checkbook balance. Some banks will reconcile your checking account for you if you have trouble. You should always leave a floating amount in your checking account. Every time you go under that amount, deposit more money. Keep your checking account in good order--it may determine whether or not you will be given credit. HOW CREDITORS RATE YOU Your credit record lists anyone with whom you have had credit dealings. The longer your credit has been extended and the larger amount you have been allowed to charge, the better your credit rating will be. PRESENT JOB The longer you are at a job and the higher your wages are, the higher your credit rating will be. Occupations are also important. Stable occupations improve credit ratings, as does more than 10 years employment. BANK ACCOUNTS AND CREDIT CARDS If you have accounts in good order, you will ensure a high rating. Overdrawn checking accounts and unpaid credit card balances will hurt your rating. INCOME Your rating will improve, not because of what you make, but because of what you bring home (net income). AGE Generally, the older you are, the better risk you are. By law, those older than 62 cannot be rated lower than those younger. DEPENDENTS Usually, dependents do not improve your credit rating because they are considered expenses. Your ability to support your dependents will influence your credit rating. ADDRESS AND PHONE Having the same address and phone number for several years show stability, so the longer you have them, the better your credit rating. CAR OWNERSHIP If you own a car, especially a late model, your credit rating will benefit. You will also benefit if you are paying for the car on installments and if you have always paid on time. But car payments may also hurt you because they add to your expenses. EXPENSES AND DEBTS The more expenses, the lower your rating. A loan officer looks at how much money you have left after you meet your monthly expenses. He looks for a low-income-to-expenses ratio. DOWN PAYMENT If you want to buy something on credit, the larger the down payment you offer, the better your chances of success. The more you put down, the lower risk you are to the lender. METHODS OF GETTING CREDIT If you want to establish credit at a fast, but sure pace, follow these instructions. Open a savings account, and deposit money on a regular basis. Soon after, open an interest-bearing checking account. Have no overdrafts. Pay your rent and utility bills on time. If you apply for credit and are turned down, find out why. By law, the party that turned you down for credit must tell you why. When you find out why you were refused, improve that aspect of your credit history. Buy things on lay-away plans and pay them off in a week or two. After doing this a few times, apply for credit at the stores, and make sure the credit officers know about your lay-aways. Apply for credit from all the stores you know. If you do establish credit, make all payments early and don't miss a single one. Make sure you can pay back all the debts you incur. ANOTHER METHOD OF GETTING CREDIT For this plan to work, you need to start with a least PhP50,000. Borrow from friends if you have to. Go to a bank of your choice and deposit the money in a savings account. Wait a few days for the account to be posted, return to the bank and ask for a PhP50,000 loan, offering the money in your savings account as collateral. Since your money is excellent collateral, the bank will loan you the money without making a credit check. Next, go to another bank and open a savings account by depositing the PhP50,000 you just borrowed. return to the second bank a week later and ask for a loan using your savings account money as collateral. Repeat this process with a third bank. Wait a few days, then open a checking account at a fourth bank. Begin making payments on each of the three loans. A week later, make more payments on your three loans until you have almost paid off all your balances. Any credit investigation will show you with three active bank loans, a checking account and a paying history for all three loans. Once you have established a good credit rating, you may apply for loans, credit cards and other forms of credit.   PROTECTING YOUR CREDIT It is your job to protect your credit. Make sure:
•	If your loan application is rejected, ask if the reason is your credit report. If it is, get that report and correct any errors on it, no matter what time and effort are required. When the corrections are made, reapply for the loan.
•	If disaster strikes--you become ill or loose your job--and can't make payments, tell your banker. Don't lie and hide..
•	Discipline yourself. Tracy says self-discipline is the quality that makes the previous tips work. Successful people do what they must do, when they must do it, like it or not.
GET ANY CREDIT CARD YOU WANT If you establish credit using the above procedure, you should have no trouble getting any credit card you want, but there are still a few guidelines you should follow to ensure you have no difficulties:
•	Apply for department store cards first. Purchase something, and then pay the balance off when it comes due.
•	Apply for gasoline credit cards using department store cards as references.
•	Apply for bank cards, such as Mastercard and Visa.
•	Apply for entertainment and travel cards, such as American Express and Diner's Club.
HOW TO GET ON A LOAN'S OFFICER'S GOOD SIDE
•	Have a good reason for requesting the loan. The likelihood of you repaying a loan for a trip to Disneyland is not as great as that of you repaying a loan for home improvements, a business venture, a real estate purchase, etc. Prove to the loan officer that your reason for requesting a loan is good and that you are not a high risk.
•	Be honest. Be honest when the loan officer asks you about your finances, but don't say more than you have to.
•	Don't get angry with the loan officer. He may say no today and yes tomorrow.
•	Be confident and optimistic at all times.
•	Agree with the loan officer on as many issues as you can. People don't like to hear the word "no." If you must disagree, this sales technique: "Yes, I understand what you're saying, but...."
•	Be calm and collected at all times. Don't be afraid of the loan officer. You will be doing as much for his institution as he will be doing for you. Being afraid will only make you nervous and jumpy.
•	Know as much as possible about the loan before you apply for it. This will put the loan officer on the defensive.
•	Be well dressed and groomed for the interview.
•	Be open to any suggestions or criticism, and try to see the situation from the loan officer's point of view.
GETTING TURNED DOWN FOR A LOAN If you are turned down for a loan, find out why--it's your right. Request your TRW report, and be sure it is accurate. Correct any errors on it. By studying your credit report, you should be able to find out why you were refused. Work on your weaknesses, and try again for another loan. Don't give up until you get a loan. If you have done all you can to improve your credit rating, and are still unable to obtain from your bank, consider these options:
•	A credit union loan--often they are easier to get than loans from a bank, and the interest is sometimes lower.
•	A source other than your bank--often other lending institutions have less rigid qualifications for loaning their money; Interest is usually higher, however.
•	A co-signer--often you will get a loan if someone with a good credit rating cosigns your application.
RAISING LARGE AMOUNTS OF MONEY Raise PhP1,000,000 In 24 Hours With Only Your Signature As Collateral Many people have opportunities that require quick cash, but most are unable to capitalize because of a lack of ready money. There is a simple procedure that allows you to generate quick cash in 24 hours. The process is easy and fast, but requires that you first make necessary preparations and lay out the groundwork for the plan. Begin by going to 10 banks and telling the loan officer at each that you want to borrow PhP10,000 for 10 Days. After paying back your loans, wait 30 days before going back to the banks. This time, request a larger amount, depending on what you think the bank will loan, say PhP20,000. If each bank approves a PhP20,000 loan, you raise PhP200,000 the second time you collect from the banks. Continue this step-by-step process. Each time you go to the bank, ask for a larger loan and a longer pay back period. What you are doing is establishing a millionaire's credit rating using the process of repetition. That is, you are always paying back the money when it is due. Making your payments on time, combined with the number of loans that you have taken out and paid back, enables you to establish a very powerful credit rating and good relations with lending institutions. After using this procedure for about a year, you should be able to borrow PhP100,000 from each bank on just your signature. Using 10 banks in this plan, you will be able to borrow P1,000,000 on your signature in as little as 24 hours.   GETTING AN INSTANT LOAN, INTEREST FREE Mastercard and Visa have a service that allows you to get a free loan with their special check-writing service. The check you write is simply billed against your credit card, and has the effect of an instant loan. You may have a seen this type of check with your regular statements. The way to make this loan pay off is to find a bank that accepts this type of special check with a 30-day grace period. To get an indefinite loan, write the first special check and do whatever you want with the money. Then write a second special check and deposit the money into your checking account. Use this money to pay back the credit card company. In this way, you may keep the money indefinitely. ALTERNATE METHOD This method of raising capital requires that you place a classified ad in the business opportunities section of your Sunday newspaper. Here are a few examples: Will pay___ percent interest on small loan for a short period. Sound collateral. Your name and phone number. Advertise in the "Business Opportunities" or "Capital Wanted" sections of the paper. If you live in a small town, put the ad in a big-town newspaper. THE CORPORATE METHOD OF RAISING MONEY You can get money you need by forming a corporation. Besides being easy to form, there are many advantages. For instance, you can be authorized to sell 1,000,000 shares of stock at no par value when creating the charter for the corporation. Here's an example of how your corporation will work. First, issue 1,000,000 shares of stock once you are authorized to do so. Keep 300,000 shares for yourself and reserve another 300,000 for future sales to the public. The remaining 400,000 shares should be issued for public sale at about PhP1 per share. If you sell 100,000 shares, you will have raised PhP80,000 after deducting a 20 percent broker's fee. In time, your stock may go up to PhP5 per share. Your stock that was worth 300,000 will then be worth PhP1.5 million. You will have quadrupled the worth of your stock. And this doesn't include the stock that you reserved for future sale. You may find this example hard to believe, but the truth is, people just like you make it work. If you have a worthwhile venture, this may be your best option. I must point out one drawback of this method. You must go through the Philippines' Securities and Exchange Commission (SEC) in order to incorporate. For this you will need legal counsel, which is expensive. However, many lawyers will accept shares of stock in your corporation as payment for their service. TAKE OVER AN ON-GOING BUSINESS WITH ZERO CASH Many people want to start their own businesses and we support their efforts. We believe in learning from others, in not reinventing the wheel. If you have had a lot of experience in a certain field, you should have no trouble operating a business related to that field. But if you have little or no experience in a business, you have two choices: work for a company to gain experience in the field you want to enter; or buy an existing business. To buy a business, you need money. This section will show you how to buy an existing business inexpensively. Preferably you will know a great deal about the business you are entering. GETTING STARTED To get started, look for a business that is in deep trouble, one that is almost bankrupt. Many such businesses may be acquired with little or no down payment. They may be manufacturing businesses, service businesses, real estate businesses, etc. Why would someone offer a business for zero cash down? Here's why: 1. The owner of a failing business wants to get out from under his bills and headaches. 2. He believes the business is beyond saving. 3. Finding a buyer for a heavily indebted business is extremely difficult. There are always plenty of cash-flow take-overs available, whatever the state of the economy. These business offers are often advertised, but you have to look for them. Search through business ads in newspaper classifieds and trade magazines, check with local business brokers and with local real estate agents who also handle business sales. FIND OUT EVERYTHING Once you find a suitable firm, learn all its details. For instance, find out how much the business owes and to whom, the value of the inventory and all machinery and the value of the building and the property itself. Look for a company in which the inventory and assets are higher than the debts. Also consider the sales income and expenses required to operate the business profitably. Examine such things as gross sales, selling and labor costs, taxes owed, etc. This information may be gathered from the firm's account books, income tax returns or from an accountants' certified statement. MAKE YOUR OFFER Explain your belief to the owner that you can turn the business around and make it profitable, but that it will take at least two years. Here is a typical offer to make the owner of such a business: Zero cash down Pay all company debts Promissory notes No payments for two years Be sure your lawyer draws up a proper sales agreement before you buy. You should also make arrangements to pay the attorney's legal fees from the business funds, not out of your own pocket. If you find that the owner insists on a nominal down payment, you may use  any of the capital-raising methods described earlier to come up with cash. However, you must insist on paying the bulk of the price with promissory notes. You must also insist that payments do not begin for a year, preferably two. You will need that much time to turn the business around and show a profit. Once you acquire the sick business, you must take certain steps to make it profitable. The first step is to deal with the creditors. Here's what you do. Set up an appointment with each creditor to discuss the firm's indebtedness. Explain to each that you have just taken over the business, and that you would like to pay off all the debts as soon as possible. Tell them that the business has no cash at the moment, but that you hope to start showing a profit in six months to a year. Your strategy is to convince the creditors to accept a reduced settlement of the debt. First, try to get a reduction of 30 to 70 percent of the total debt. You may also insist that payments do not begin for at least one year. Your third request will be for long-term repayment, 10 years if possible. Once the creditors accept your offer, make it legal by having them sign agreements. With this maneuver alone, you will have reduced your debt from 30 to 70 percent, lowered payments by getting the payoff time extended, and received complete debt relief for the whole year. Taking care of the business' debts helps substantially. The business is then in a far better position to recover from its ailments, but don't stop there. There are other things you can do to improve its financial standing, such as: 1. Sell excess inventories: finished goods or raw materials. 2. sell obsolete production machinery 3. Sell more company stock 4. Sell a separate division of your company. 5. Split your company into separate firms and sell stock for both. 6. Make any cost cuts you can: reduce payroll, find cheaper supply sources, eliminate waste, etc. 7. Eliminate products, services or accounts that are only marginally profitable. 8. Study how to increase sales and locate new markets. As incredible as it may sound, there are many businesses saved by using these methods. All too frequently, owners are completely unaware of the true value of their businesses. In many cases, an owner has exhausted his operating capital and credit through mismanagement. Your offer allows him to recoup some of his investment, and it may be the only one he gets. THE CORPORATE TAKEOVER You may use a variation of the promissory-note method offering the owner corporate stock as a down payment, or even as full payment if the owner is desperate. Assuming you set up a corporation with 10 other investors, the owner will be assured of a sales potential of 10 customers for his stock, once the business gets going. HOW TO CREATE SUCCESSFUL LOAN REQUESTS The proposal you submit for your loan will determine whether or not the banker will give it to you. The following formula will show you how to apply successfully for a loan. COVER PAGE On this page, include your name and address and the names and addresses of any others who are applying jointly with you. This page goes on the front of the loan request, and it should contain the title of your request. LETTER OF REQUEST This letter may be the most important part of your loan request, and it will determine if you get the loan. The letter must get right to the point and tell the loan officer exactly what he has to know in one or two pages. The letter should tell the officer: 1. Why you want the loan. 2. How much capital you want. 3. How you propose to pay back the loan. 4. Any personal information that may help you get the loan. DATA SHEET This form, similar to a resume, is very helpful to the lender. It contains background information about yourself and all your personal information, such as name, address, height, weight, marital status, birthdate, etc. It also includes information about your past four jobs, three references and a complete record of education. MARKETING PLAN FOR BUSINESS VENTURE If you try to get a loan for a business venture, this part of your proposal is one of the most important. The function of the marketing plan is to show the lender what you will do with the money loaned you and how you will pay it back. The marketing plan proves to the lender that you will make a profit. The following six steps should be taken when creating your marketing plan. 1. Analyze Your Present Marketing Situation In order to project your company's future achievements, you must know where it stands at the present time. In this portion of your marketing plan, analyze your company's financial resources, competitive strengths and weaknesses, organizational set-up, market conditions, experience, management capabilities, clientele, channels of distribution (how you will distribute your product) and your competition. 2. Determine Your Marketing Objectives This step provides guidance and direction for your company. Here, you tell the lender exactly what you want your company to achieve. But remember to be specific and make sure that the numbers can be measured, such as: "Increase the market share of widgets 10 percent from January 1 to December 31, 2004." You do not have to know these numbers precisely, but you should make a rough estimate of what your company can achieve. 3. Assess Your Company's Capabilities In this step, show the lender how you will use your resources to reach your objectives. You must show that you have every resource necessary to reach your objectives, except one: a certain amount of money. In this step, explain past experiences and accomplishments that you, your company, or other company officers have had that could aid the future of your firm. Also mention anything favorable in Step 1 that may help you reach your objectives, such as your clientele, receivable, equipment, etc. 4. Create A Marketing Strategy In this step, show the lender your plan or strategy for meeting your objectives. This may include continuation or revision of an existing strategy, or be completely different strategy. A strategy is a complete plan of how you will best use your resources to meet your objectives. List each activity you will perform. It is also important to establish which duties or activities will be delegated to which person. 5. Put Your Overall Plan On A Time Schedule In this step, place the activities you have listed in the previous step on a time schedule. List each activity and show how long it will take you to complete. You should also show beginning and completion dates. Do this with all your marketing activities. The lender not only sees what you plan to do, but how long it will take you. 6. Control And Evaluate Your Plan You should have a method of evaluating your process as you follow your plan. You should be able to control all the proposed activities and make sure they are on schedule. For example, if your objective is to obtain 300 accounts within a 10-km zone, your control activity will check that you have done just that. The control activity will be a monthly record of the number of accounts you have obtained within the designated 10-km zone. Financial Statements Personal financial statements of all persons involved in the business venture are important to the lender. Current, as well as projected financial statements, should be included in the loan request. Projected financial statements are statements that show how predicted sales will affect future financial conditions. It is advisable to have an accountant help you prepare your statements. Statement Of Capital Expenses This statement shows the lender exactly what you plan to do with the money he loans you. You should itemize how each dollar he lends you will be spent. REAL ESTATE LOANS Having a professional, independent appraisal of the property is the first requirement. If possible, include pictures of the property, as well as maps showing its exact location. GETTING MONEY FROM VENTURE CAPITAL SOURCES Venture capital institutions will finance business investments. And since they assume the risk, they ask for equity in your business. A conventional source for a business loan takes your collateral if the business fails and charges you interest on the loan. What makes venture capital source different? Since they own part of your business, you don't have to pay them interest. Venture capital companies invest in companies that they feel will make them money. They also specialize in certain industries or fields. You will have to write them to find out where they prefer to place their money. These companies have fluctuating funds. There are times when they can loan a lot of money, and others when they don't have much to spare. Keep writing the same venture capital companies in your field. You may approach them when they have a glut of capital to loan out. It is important that you submit a professional presentation to these companies. Your chances of getting the funds will be much greater if you present your case well. Look over the section on creating a successful loan request. Follow the steps outlined for you on your loan presentation. If you do, you have a good chance of getting the money you need.