Leo Kanell

Tag: Business Funding

  • Introducing the BUSINESS FUNDING FORMULA book

    Introducing the BUSINESS FUNDING FORMULA book

    CHAPTER 1: WHAT IS THE BUSINESS FUNDING FORMULA?

    Now that you’ve come across this book you’re probably wondering what exactly is the business funding formula and how will it help me? If you’re reading this, then you are either an entrepreneur or an aspiring entrepreneur and you have realized that if you simply had access to capital and funding you would have a real chance at building not only the business of your dreams, but the life of your dreams as well. The ability to secure capital can be the difference between success and failure in business, it is absolutely that important.
    Before the recession of 2008 & 2009 it was not complicated to secure funding at your bank to launch or grow your business, but since then it has taken incredible creativity and knowledge to secure funding especially for a new business with unproven financials. Even for businesses with history and financials it is still difficult and even though several years have passed since the recession of 2008-09, banks and lenders still mostly lend to the top 5 to 10% of businesses and largely ignore the other 90% of small businesses who desperately need access to capital to have a chance to bring their products and services to market. To make matters worse the proliferation of many different high rate finance products and expensive lenders has made it even more confusing to find the best funding options to launch and grow your business.
    The Business Funding Formula was created to give all business owners a step by step process to follow in order to secure the best funding possible to turn your entrepreneurial pursuits into the truth. The funding formula has existed for decades and has had tremendous effect on some well known businesses that you recognize and probably use on a weekly or even daily basis. Without these business owners’ understanding of the funding formula it is very likely that their businesses would not exist any where near the level they do or may not even have survived without the funding formula.
    The business funding formula is the holy grail for jump starting your new or existing business. You’ve probably seen some studies done by ivy league schools and other organizations and many times one of the top reasons that new businesses fail is due to undercapitalization, a complicated term to describe running out of money. I don’t care if you are selling lemonade on a table outside of your house or a more complicated business model, it takes money to buy the cups, the lemonade, the table and the signs in the front yard to market your lemonade; so although it is popular to talk about starting a business without any type of up front money it is simply for the most part not part of the capitalistic world we live in. The business funding formula will break down the top funding options available for entrepreneurs including: SBA, unsecured loans, lines of credit, merchant cash advances, corporate credit, income and every funding option available on the planet today. Most importantly it will take all of this seemingly complicated BS and break it down into easily understandable steps to guide you to the best funding that you can possibly qualify for. It will also provide you with hacks and tactics to save thousands on any financing you need for the rest of your life. This book will also pull back the curtain to how your credit score is calculated and how lenders make lending decisions. The business funding formula is a tool that every entrepreneur needs in order to achieve massive growth for a business.

    Buy the Book here!

  • Why the Top Realtors Succeed and How to Join Them

    Why the Top Realtors Succeed and How to Join Them

    Recently, we have helped a lot of real estate agents to build their businesses so they could become top realtors in their local market.  It surprised us to find that on average Realtors make about 55k per year and the top 10% of real estate agents make about 105k per year.  So the bottom line is less than 10% of agents average over 10k per month over a calendar year.  This was somewhat surprising as we know several top realtors and mistakenly assumed that many of them on average make over six figures per year.  So that said it led us to do some investigating.

    We found through research and surveys from reputable firms that the top 10% of agents take action in certain aspects of their business that the other 90% of less successful realtors do.  It breaks down in to about 4 categories for the top realtors.

    MARKETING

    The top realtors spend more on marketing each year, the top 10% spend at least 5k and the top 5% spend twice that amount in marketing each year.  Marketing can mean everything from nicer listing for sale signs, to brochures, online marketing like Google pay per click ads, zillow ads, trulia ads and other real estate themed marketing.  The surveys did not break down the exact type of marketing, but rather just the fact that they spent the money increased their success.

    TECHNOLOGY

    In addition to marketing, the top realtors consistently spend money on superior technology than their less successful counter parts.  On average they spend at least another 5k per year in technology and again the top 5% spend even more on tech.  Tech can be everything from toll free 800 numbers with free info about a house listed to sell to superior sales funnels built out online and working in conjunction with multiple listing services in their local markets.  Again the exact type of marketing will certainly be important, but more important than anything was investing in the tech whether that means better cell phone and tablet and computer technology or something as simple as a new cell phone battery.  The other day I went to look at a property and the realtor was not prepared with a phone charger and with a dead cell phone was unable to open a property so I could look at it.

    WEBSITES AND SOCIAL MEDIA

    The next two important factors for real estate agents to be successful center around essentially what is more marketing and technology spending and it is with the agent’s own website and social media pages.  The top realtors spend more on a better website and social media and they also update those sites and social media pages as well as share content multiple times each week and engage their audience of followers including having more friends on facebook and linkedin that often translate in to more clients.  It really is incredible.

    So for a lot of agents you look at these findings and say well duh if I had 25k to 50k I could be a successful realtor, here’s the good news, we have the ability to help you secure funding for your real estate business, so get in touch and we will help you!

  • Fundability

    Fundability

    Fund • a • bil • i • ty – [adj. Fuhnd-uh-bil-i-tee]
    You won’t find “Fundability” on Dictionary.com, so don’t bother looking. Fundability is a phrase we’ve coined to describe how a business measures up in relation to the entire business lending and investing community.

    If you want to have the business of your dreams then often you need quite a few things to make that happen such as:

    • Equipment
    • A Better location
    • hire more Sales people and employees
    • run massive marketing campaigns
    • buy inventory

    Just to name a few, the common denominator with each item necessary to build the business of your dreams is that they all take a lot of capital and so that is why it is so important to be fundable so your business can qualify for the money it needs to become the business that will make your family proud of you.

  • Startup Funding Options

    For most new startup businesses the task of securing some startup funding capital can be extremely daunting and in reality where to start is the most difficult thing to know.  Most new entrepreneurs immediately think of going to their local bank and seeing if they will qualify for some money, let’s begin by looking at that experience and then other options after that.

    When you go and see your bank it’s important to understand that most banks do not lend to brand new businesses since they are unproven and a high risk.  That means the only option you will find at a bank will be the infamous SBA option.  SBA has 3 loan types, the 7(a), 504 and the express.  The 504 and express almost always are exclusively for established businesses with 2 to 3 years of profitable business tax returns.  The 7(a) is the only option that can realistically be used for startup businesses.

    Qualifying for a 7(a) loan can be a difficult task, in reality it comes down to a lot of things like your business plan, industry type, your personal credit, but indeed the most important factor will definitely be whether you have any assets or collateral.  Acceptable collateral types will generally be significant equity in your home or other real estate properties, newer equipment with a strong value and generally a 401k or IRA.  So if you have those types of collateral then you stand a good chance at securing a startup SBA 7(a) loan.

    You will also need some type of down payment usually 10 to 25% is what most lenders want, for new businesses the percentage is usually much closer to 25%.  So you have to ask yourself what percentage of new startups actually have that type of collateral and down payment available for their business to secure startup funding?  Since I have personally spoken with thousands of new business owners in my experience it would seem that less than 5% of new entrepreneurs have those kinds of qualifications, assets and collateral.  So if you don’t possess those items then what other options are there?

    In reality the best option will be a mixture of unsecured credit lines.  These credit lines do not require extensive income documentation or collateral, in most cases you just need a 680 credit score to qualify for them.  The monthly payments are low and affordable and they are flexible tools.  Even if you are successful at securing an SBA loan, an SBA loan will often not be able to go towards working capital, so in reality you will still need additional funds for working capital like paying payroll, marketing and other costs.  For most startups unsecured credit lines are your best bet.

    ABOUT THE AUTHOR:

    Leo Kanell teaches entrepreneurs how to secure affordable capital for their new or existing businesses.  For more info go to http://www.leokanell.com

  • Why Mark Cuban is Wrong about Starting a Business on a Business Loan

    Shark Tank has become one of the most fascinating shows on tv regarding entrepreneurship and capitalism.  One of its current “Sharks” is Mark Cuban, he is a man I respect immensely in terms of business development, entrepreneurship and creating wealth.  He has also been quoted as saying that he would never start a business on a loan.  Why would he say that?  There is the fact that it is more profitable for himself and his show to give capital to entrepreneurs for ownership and equity in these new businesses, if the entrepreneur figured out how to secure financing then clearly that would not benefit the premise of the show.  That said, he may really believe that is an important aspect of starting a business.  I think he is completely wrong and I’m going to prove it with some concrete examples.

    I have started multiple multi-million dollar businesses and each of them was started with some sort of loan or funding that I had to creatively secure in order to get these businesses off of the ground.  So from my own first hand experiences I can tell you that in order to begin and at several turning points in my businesses the ability to secure capital for them has been a tremendous key.  So that said, allow me to share a much better example of businesses succeeding due to a business loan or some sort.  

    Allow me to present Walmart.  We all have been to Walmart and have witnessed its growth first hand.  Decades earlier it was begun with one store by a great man named Sam Walton.  Sam started his first store with a loan of $20,000 and $5,000 he had saved up.  He continuously tinkered with the discounting methodologies that he would develop over the years to create the biggest global retailer in the world and he would never have succeeded at growing it the way he did without constant financing.

    At one of his first stores he secured a loan for $1,800 to finance an ice cream machine that he used to sell ice cream outside his store and attract new customers.  He was nervous about the loan, but it ended up increasing his sales significantly.  As he began to grow from his first variety stores to his first full fledged actual big box store Walmart he went around looking for capital from investors.  Each investor passed on his business model believing it would not succeed long term.  So Sam “borrowed to the hilt” and risked all of his personal assets in order to build Walmart and grow it exponentially.  Walmart now has thousands of locations worldwide and had annual sales recently of nearly $500 Billion Dollars.  It all started with a loan and was grown with significant funding.  Additionally if Sam were still alive today he would be the world’s richest man and be valued at 160 Billion nearly double what the current richest man Bill Gates is worth (about $80 Billion) so suffice it to say understanding how to start a business with a loan can be one of the best decisions that a business owner ever makes.  Comprehending the best methods to secure growth capital as your business expands can be vital to long term growth and success.