Hello. I've been thinking about taking out a loan to start a business of mine. I'm not really going to go into much details about the business, but was thinking about the risks of it all. I'd be taking out a loan in the amount of $10,000. This'll drastically help my business get started. Right now my business is mostly run from affiliates and a small group of volunteer staff. I don't have the funding to do this myself, thus the reason why I need a loan. I'm thinking that a good $1000 can go into SEO and proper internet marketing, while the other $9000 can go into the business and staff. What do you guys think? Do you think taking out a loan to start a business is such a risk? Another question...regarding staff. How to get good staff members and pay them accordingly? I don't want to underpay, but I don't think my budget is that steep for a good team of staff members.
Try $1500 first. If your SEO and internet advertising doesnt pay off, your only out $1500. However, if you spend $10k and only earn a few hundred, you're bankrupt.
I don't think $10,000 is that much. I would think I can always get a side job and just pay it off over time if it doesn't go well...I'd just be poor living with my mother until I'm 30 or 40, like Nintendo.
it totally depends on your unique circumstances. I know Google was funded through hot lunches in a stanford university dorm room.
Check out other sites and forums. MySpace has some really interesting groups over there that are entrepeneurs, home based business, etc. etc. There are some friendly people that can maybe help you and get you on the right path. You may also want to check your local bank for the S.B.A. rep who can guide you even further. Each year there are MILLIONS of dollars that the S.B.A. gets stuck with and they WANT to loan the money. You just have to provide them with a good concrete business plan.
I think the weak point is the staff part of the equation. As soon as you start having employees things get much more complicated and expensive. Unless you have proven people management skills, I would think REALLY hard before adding staff.
Do you have a concrete business plan and know EXACTLY what you are going to do?...with alternate plans for unexpected things popping up?... if you don't have that...and a very detailed earnings section of the business plan...then I wouldn't even consider it (though i'm probably really biased as i don't do the credit thing anymore)....
go for it my man! "no guts no Glory"! i srtongly suggest you read some ebook regards seo. also, buy the ebook X-File - it teaches you about affiliate programs and how to use adwords effectivly. BTW: your only way of getting that 10K with no past exprience will be affiliates only. adsense will not work for you. i wish u the best of luck! Roy.
It could be an interesting challenge. With a loan, you definitely need to worry about making monthly repayments to whoever you got the loan from at an interest and with staffs, you need to worry about paying their salary and all the incidentals. I guess with the extra things to worry about, it would push you to work even harder to make all the necessary payments in time. I agree that $10,000 is probably not a lot to go around because in no time, the amount would vanish through payments. You need to be extremely certain that you can turn a profit in a real short period to be successful. It depends on how adverse to risk are you. If you want to take the gungho path then that is probably the right move but if you are cautious then you may want to try avoid getting the loan and just outsource whatever you can, this way you only pay when you need to and not need to worry about paying salaries. It may be difficult to get good help if your employees knows that you may not be able to pay them in a few months time. Before you embark on anything, draft out a business plan and then do some What-if's analysis. Think about the worst situation and what your Plan B or Plan C are. In any case, good luck in what you decide.
My opinion is, a lot of things can be done via internet for a low cost, and profits may be huge depend on your effort, so why not try out some small business that involves internet, so you don't need to hire staffs.
in my opinion, if you know what you are going to do and it will definitely make profit but you got no money. Go for the loan. however, if you dont know what to do or how to earn money back but just need some fund to start, definitely no. keep this in mind. liek other said you need a concreate business plan.
You don't need capital, staff or even much equipment to start an internet biz. All that stuff does is give you headaches. We're now pulling in $30k per month from AdSense - and growing FAST - mainly from small, young (< 6 month) sites. And then there's another few thousand from affiliates and other things.
Why don't you hire Freelancers and not deal with the Government. If you have employees you have to deal with workers comp, ssi, fed taxes, states taxes, etc. Just do the freelance thing.
Many businesses fail within the first year, this is often due to initial underfunding. You have to have money behind you to deal with the unexpected, to grow your ideas and not feel restrained. In my opinion, if you have a solid business idea, go for it. I recently had a similar dilema, I did the same and I am more than happy with the results. I am now able to cover the loan repayments with one steam of income whilst having money to develop other areas of my sites and indeed other projects. Previously I had to cover any outgoings from my salary and therefore would hold back on the more major expenses in promoting the sites, this in turn held the sites back. I no longer have these constraints. Cheers Hopper
Like everyone else, a solid business plan + EXECUTION would be necessary Check out Prosper.com if you're looking for loans. You may be able to get a good rate there.
The big question here is who will give you this loan? A bank most likely won't unless you have the proper education and experience. They may if you can secure the loan through assets, such as property. Your options are signature loans, such as hard money, CCs, etc. All of which are a recipe for disaster without the proper items in place. You have a business now. Save money and wait until you get $10,000 in savings to do your new thing. If you can't accomplish this, you don't have the ability to survive after taking out a $10k loan. While it takes money to make money, you can tell a lot about someone (or yourself) by how they do with what they have (profit, patience, leadership, etc).