What Kind Of Capital Is Appropriate For Your Business?

There are two kinds of capital: debt and equity. Both kinds are typically used by a company during its lifetime. Lenders have different objectives than investors and therefore look at different factors about a company when deciding whether or not to invest or make a loan.

Debt

Debt is money borrowed, which must be repaid at a set time period and generates income for the lender over that time period. Lending sources include not only banks, but also leasing companies, factoring companies and even individuals.

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Maximizing Revenues from Google Adsense

We received a feedback from a user today telling us that our site's use of Adsense was critiqued in a video lecture. I watched it and listened to what the person had to say.

The page the person assessed was the article "Earn Money from Your Hobby" - although he had an old version of the page. The version he used did not have any Adlinks, and there was a border on the large rectangle ad. We have since added Adlinks on many of our pages (experimenting on the color along the way) and have used white borders on our large rectangles.

He is an advocate of the strategy of blending the Adsense ads on the page, making the ad seem part of the content. While he gave us thumbs up mark for putting a large rectangle on the article body as well at the bottom of the page, he said that we need to lose the "article continued below" label because it alerts the visitors that ads are coming up and visitors are now more likely to skip the ad to continue reading the content.

True, some may be jolted that ads are coming up so they will move their mouse downwards to the content. But our goal is not to trick our audience into clicking on the ads. We do not like to trick our audience into thinking that what they are reading is part of the content, and because they see hyperlinks, they click on them only to find that they clicked on ads.

We made an editorial decision when we started with Adsense in June 2003 that our main priority is our audience. Our goal is to cultivate a loyal base of visitors who will come back to the site again and again. Tactics such as totally blending the ads into the content may work short-term, but we feel that it is the fastest way to turn off our visitors.

And given the nature of Adsense ads that appear on the site -- many of whom are bizopps -- we want to signal to our visitors that these are indeed ads. We want our visitors to separate in their minds our content with the ads that they see. Try as we might to weed many of them, sometimes ads of scams creep in, and to totally blend the content with the ad is not the smartest thing to do in the world. We will not trade in a few clicks for our integrity.

Anyway, we earn 5-digits a month from Adsense, and our large rectangles with their "article continued below" generate double digit click throughs. So unlike what the video broadcast was saying, a long term strategy of clearly identifying ads to the extent possible could actually work. As always with Adsense, the key is to experiment, experiment and experiment.

The Business of Scrapbooking

I am a frustrated scrapbook enthusiast. I love the idea of creating and keeping scrapbooks. I subscribe to several scrapbooking magazines. I always buy papers, embellishments, stickers, other accessories and equipment for scrapbooking every time I head out to a craft store.

Yet I don't have the time. Since I decided a year ago to create scrapbooks for my kids, I am proud to say I've finished only two pages since then. But I have a tall cabinet of papers and my embellishments are in several big boxes -- I am ready to scrapbook (I just don't know when) .

Scrapbooking may look like a hobby a bored housewife might indulge in, but apparently it is big business. A study conducted by Creating Keepsakes magazine in 2004 called “Scrapbooking in America”™ (SIA) survey showed :

• Annual sales of scrapbooking industry is at $2.551 billion, representing a 27.8 percent increase from 2001.
• There are 4.4 million new scrapbooking households since 2001, for a total of over 26 million households and 32.1 million scrapbookers.
• Spending on scrapbooking supplies by households that scrapbook has increased 6.3 percent to $96.76 annually since 2001.
• Almost one in four, or 24.5 percent of U.S. households, participate in the hobby of scrapbooking, with Western states showing the most households involved in the hobby (between 26–31 percent of households).

If you can creatively design papers or scrapbook materials, this is one potentially lucrative business that you can consider. Maybe I'll even buy your products, even if I keep it in the cabinet for years.

How to Find the Hottest Products to Sell on eBay

Every Tom, Dick and Harry sells on eBay. Ok, a bit of exaggeration, but eBay sure has become an important marketplace for small and home-based sellers. Many are even using eBay as their main business. Some are doing well with it, but some not so well. Just see how many listings on eBay that are ending without a bid and you can see that not everything sells on eBay.

So the main question every newbie or even experienced sellers is asking is: What are the hottest products to sell on eBay?

According to our article "How to Find the Hottest Products to Sell on eBay", eBay has several ways for you to determine exactly what the hot items to sell on their marketplace:

Items In Demand = the most popular items currently within that particular category. To see the In Demand page, go to http://pages.ebay.com/sellercentral/sellbycategory.html

Hot Items by Category Report = a monthly report that lists the fastest growing categories on eBay for the previous month. Go to http://pages.ebay.com/sellercentral/whatshot.html and select "Hot Items by Category" from the menu on the left.

eBay Pulse = "a daily snapshot of current trends, hot picks, and cool stuff on eBay". Go to http://pulse.ebay.com/ to see eBay Pulse in action.

Merchandising Calendar = eBay promotes specific categories on its home page each month. Savvy eBayers know that this home page exposure results in more interest in such categories. Go to http://pages.ebay.com/sellercentral/calendar.html to view the current Merchandising Calendar.

I also use a tool called Deep Analysis by Hammertap which is an excellent market research tool to use for ebay selling. It gives you the percentage of successful auctions in each category, types of products that actually sell, most succesful sellers in each category, and many more.

Small Business Statistics

For the recently concluded Small Business Week held in Washington DC on April 9-16, SBA prepared a compilation of statistics on small businesses:

Curiously though, one important stat that is missing from this list is the number of small businesses that fail in their first year, or in five years. I suppose SBA needed only to drum up the positive about small businesses and not include anything negative (after all, the President gave a speech during the ceremonies). Even then, when you talk of small business, failure is not too far behind. With majority of small businesses that fail, I think any decent compilation of stats on this sector should include this - and whether the failure rate is decreasing or increasing over time.

Click to read SBA's Facts for Features press release

How to Attract Advertisers to Your Web Site

Advertising is one of the easiest ways to earn money on the Web. You don't have inventory to worry about, no shipping and fulfillment problems, and there is minimal credit card fraud risk (though believe me, there are scammers who use stolen credit cards to pay to advertise their website).

To earn from advertising, you can opt to use a third party service such as a banner ad like Burst Media or contextual ad networks such as Google Adsense. They get the advertisers and you just cut and paste a code to display on your site. Of course, they get a percentage of the revenues your site generates ranking from 30-60 percent. Our article "How to Generate Advertising Revenues for Your Web Site" provides a more extensive discussion on how to apply to banner ad networks and the like.

But how do you go about it if you want to get advertisers directly to your site, without intermediaries such as the banner ad networks or Google Adsense?

At Powerhomebiz, we sell advertising space on our website - both banners via CPM, sponsored text links, and newsletter advertising. In our experience, here are what advertisers are looking for when choosing sites to use for their advertising:

1. Who are the visitors = It is important for advertisers to know whether your site's visitors are what they are after. More than just traffic numbers, they want to know whether they can get targeted traffic from your website. They want to know whether the customers they want are visiting your site.

2. Traffic levels = Advertisers will often ask you how many visitors/pageviews/uniques you get in a month. Some will go to Alexa.com to check your traffic standing (not accurate, but many see it as a good guide). If you are selling banners through CPM rates for example, they will normally ask you how long it will take you to show the 20,000 ad impressions they ordered (or how many they ordered).

3. Your rates = how comparable your rates are with others.

4. Customer service = advertisers want QUICK support from sites they want to advertise on. You need to be quick to respond to their emails, whether inquiring for your media kit or asking your ad rates or checking the performance of their ad campaigns.The key to understand is that advertisers will always look for metrics to help them gauge the ROI they can get from advertising in your website. If they don't think your site will not give them a good ROI, they will not advertise or renew their advertising on your site

5. Monitor campaign performance = advertisers want to see how their campaigns are doing on your site, so they can make decisions fairly quickly whether to change the creative, pause the campaign or increase the campaign. You need to be able to provide them with real time statistics. We use phpadsnew and it is just great (and FREE!).

Five Reasons Podcasting Might Be Right For Your Home-Based Business

Podcasting has been called the wave of the future. The truth, however, is that podcasting is the here-and-now and is rapidly gaining momentum across the world. There are podcasts available for just about any topic you can think of from cooking to video games to religion. As of February 2006, a Google search for the term podcast returns over 205,000,000 results. The amazing reality of this is that it is still, in effect, an untapped market that will continue its growth in the years to come.

Podcasting can have many uses for the home-based business owner. It can be useful not only advertise, but to also communicate your business message. Below are 5 tips on how to use podcasts to benefit your business:

Read full article by Jill Hart

Looking for a 100% Success Guaranteed Home Business

Someone at Yahoo Answers asked whether he can "start a home business through a certain company and be sure to make money with no doubt at all." He doesn't want to use any of his money or waste his time until he is sure that he will make profit from the business he wants to start.

Don't we all wish that the business we start is 100% guaranteed to make money?

Alas, a business, whether it is run from home or a big company, is not without risk. You can only minimize your risk and increase your chances for success -- but nothing can provide you with 100% guarantee of success.

If you are buying into a business opportunity, you can minimize your risk by:

1. Researching the company. How well did you research the bizopp company before signing with them? Are they legitimate, in the first place, and not some fly-by-night business operators that will disappear after you pay them? How is that business actually performing - have you checked their business credit report to see if that business is actually making money? If you can verify (not just the "they told me so" but actual hard data) that they are making money, then you can be more confident going forward with the company.

2. Checking the performance of other bizopp buyers. How well are other affiliates or business opportunity buyers like you doing with the business? This is the crucial one, because there are businesses that earn well but not necessarily the people who buy into them. Are they making the income that was promised to them - and more? Check other affiliates and interview how they are doing. If they are struggling to make ends meet, then you cannot be sure that you will make money from that business.

3. Determining the demand for their products. Check the Census website, do a little market research, ask around to check if people actually want, need and will buy this product.

4. Knowing how to market. Do you know how to reach your target market? You may have a good product, the company may be making good money, but if YOU do not know how to reach your market, then you will not make it.

5. Assessing your commitment to the business. How dedicated and committed are you to this business? Entrepreneurship is full of curve balls; you just don't know which way yours will go. If you suffer a bump in the road - e.g. making only $100 instead of the promised $10,000 per month - what will you do? Will you already thow in the towel and quit?

Business is full of ups and downs, and if you plan to stay only when the going is on top, then it is best that you just stay put and don't enter into business. You may not have the temperament for it.

Balancing Home Business and Family Life

One of the best things of working on a home-based business is that you can be with your family. One of the worst things is that you are with your family.

If you are like me with two very young children, the toughest part of working at home is finding time to actually do any work. Taking care of a toddler and a baby are full-time jobs by itself; add to that mix a home business and you need to have A+ skills in time management. Others even have it worse - a full time career, a home business, and family.

It's the cliche of every working person trying to balance various responsibilities: finding time to do everything you need to do. Anyone who's been in this type of situation will say that 24-hours is not enough to do everything.

So how can you work on your home business when you have family or a full time career? One thing I learned is that is it NOT easy. Coupled with the fact that I work my best when deadlines are hanging over my head, balancing various responsibilities is really hard. But here's what I do:

1. Planning. The night before, I plan out a list of what I need to do both at work and for the business. If I don't I'm hopelessly lost and often fail to do what I need to accomplish that day (I get easily distracted and have the tendency to spend too much time on things that are not important, like reading gossip sites such as EOnline or participating in forums such as WebmasterWorld or Yahoo Answers). I also keep a notebook every where I go that I use to jot down any ideas that come to me.

2. Finding time to work. I have mastered the art of not sleeping (or sleeping very little). I work for the business when the kids are asleep - so that starts at around 9 pm. I'm often up until 1 or 2 am. There are days when I feel like a walking zombie, but hey, that's called sacrifice (argh!).

3. Working around the family schedule. I work during the kids' naptime. For 1-2 hours in the afternoons, I need to cram as many work as I could do because when they wake up, it will be very difficult to get any work done.

4. Hiring a babysitter. If you have kids, babysitters are lifesavers. They keep me sane and happy. Having a babysitter allows me the luxury of work. When my husband asked me what I wanted for my last birthday, I told him I only want one thing: a babysitter.

5. Taking care of yourself. This is extremely important. Sometimes if you push yourself too hard, it is counterproductive. Take a rest sometimes, take a breater. One thing I realized is that work never ends - even if you do not sleep now, there will still be work waiting for you tomorrow.

Starting a DJ Business

Disk Jockeys are not just record players anymore; they have become an integral part of various celebrations and venues from weddings to clubs. Get a lousy DJ and it sure can dampen all your birthday or wedding festivities. DJs can even serve as the main attraction in clubs, and many in fact are becoming hot celebrities! So DJ-ing can be a very lucrative business to those who know how.

If this is a business you are interested in pursuing, you may want to read these books that I have come across on how to become a successful DJ and profit from it:

• The Mobile DJ Handbook: How to Start and Run a Profitable Mobile Disc Jockey Service (Paperback) by Stacy Zemon
• The DJ Sales and Marketing Handbook : How to Achieve Success, Grow Your Business, and Get Paid to Party! by Stacy Zemon

When to Decide Not to Pursue a Business

Someone posed a question at Yahoo Answers as to why some people invest money in a business and then quit before they've even started. Why indeed, considering that they already plunked down money for the business?

I ventured 10 possible reasons:

• They realized a little late that they are not cut out for entrepreneurship; that they are better off working as salaried employee or find other means to earn income other than starting a business
• They started to have doubts about their capabilities to run a business and their cold feet made them turn away from entrepreneurship
• They realized that their business is a losing proposition so they decided to cut their losses now than waste resources more down the line
• They underestimated the capital requirements of their business and realized that they do not have sufficient resources to successfully start, grow and manage the business - and that they don't know or can't get additional funds
• They failed to plan out how the family would be affected by the business; or members of their family objected to the business
• They simply lost interest in the business; and some other interest captured their attention
• They faile to foresee that starting a business means work, LOTS of work, and they decided that they don't want all these responsibilities
• They fear that they may run afoul of the law and don't want to risk it (e.g. zoning, regulatory problems, etc.)
• They really don't know what to do or how to proceed next; and they cannot find someone to mentor or guide them
• Partners or other investors involved pulled out of the business; and these partners either have the knowledge, skills and resources to push the business to success

Let me know what you think of the above reasons.

Making Money on the Web without any Effort

I often receive emails from people asking me how they can earn something like $500 per month or even more with less-to-no-effort on the Web. They don't have money, and they do not have the time, but they heard you can make good money on the Web. So is there a way where they can simply sit while their website makes money?

How we all wish we can "earn money with less effort." The reality with the Web is you don't just create a website and -- BAM! -- earn $500 the next month without doing anything. First, you have to be willing to spend some money - at least with hosting. Even selling on eBay means you have spend some money for the listing and final value values. Getting traffic nowadays also mean you have to spend a few dollars here and there to get visitors.

Free domains are great for personal websites, but if your intention is to earn serious money, that is not the way to go. I can't help but chuckle when I see a website on Geocities peddling ebooks that teach people how to make money because they're earning thousands and thousands of dollars on the Web per month. The first thought that comes to my mind: How come this guy who says he is earning thousands can't even shell out $8.99 for inexpensive hosting? The credibility just goes down the drain for me.

Also, many programs such as eBay affiliate program - where you attract visitors that will sign up with eBay and you get commission from that -- may only allow publishers with "real" websites to join. Even banner advertising network may not accept you if you only use a free domain.

The earning capacity of a website is directly correlated to the content of the site. You have to have something to offer that people would want. Some just sees the end goal - $500 per month -- but have no clue what to do in order to get that $500 per month. As a result, they end up with websites with no real content, just banners and advertising plastered all over the website in the hope of earning their target amount. Unfortunately, this approach will not work.

$500/month is easy, very doable -- IF AND ONLY IF -

• you have something of value to offer your visitors whether product or information
• you have traffic to your site
• you select the right business model and money making programs (be it advertising programs, affiliate programs, or others) for your site

And all of the above cannot be achieved without spending a dime and putting "less effort." Especially if you have no money, you have got to do more and be creative in order to stretch the limited resources you have. Creating and putting up a website is the easy part; how it will make money is the challenging part.

How to Start a Magazine

I recently interviewed the founder of the new Preemie Magazine (watch out for the interview to be published at WomenHomeBusiness.com), and one of the topics we covered was how to successfully launch a new publication. We get a lot of questions from our readers on how to start a magazine.

In a nutshell, here are some steps to starting a magazine:

1. Conceptualize your magazine - what is its editorial voice, what types of information should it have, who should it be for

2. Determine how large (or small) your target audience - this can help you determine the viability of your idea. You don't want to start a magazine where only you and 2 friends would be interested in

3. Decide your revenue model - should it be by subscription or should it be by advertising, or both

4. Write your business plan to help you think through your idea

5. Gather a team to help you create your magazine (ad sales, layout, editorial team, printing, etc.) and decide whether to outsource or do in-house some of the processes involved.

6. Raise financing

7. Start production

Some of the excellent resources on how to start a magazine that I found on the Web are:

• Magazine Publishers of America
• MagazineLaunch.com
• 10 Tips on How to Launch a Magazine
• The Surviving Small Press

If this is a business you are interested in, the following books are must-reads:

• Launch Your Own Magazine: A Guide For Succeeding in Today's Marketplace by Samir Husni
• The Magazine: Everything You Need to Know to Make It in the Magazine Business, by Leonard Mogel
• The Magazine: From Cover to Cover, by Johnson, Sammye; Prijatel, Patricia
• Career Opportunities in Magazine Publishing by Monti, Ralph
• Starting and Running a Successful Newsletter or Magazine by Woodard, Cheryl

Partnership Troubles: When an LLC Goes Awry

A business partnership when it works is awesome, but a terrible headache when it does not. Jenny Lefcourt of WeddingChannel.com fame (now with Bella Pictures) said it best in my interview with her: "Finding the right business partners is just about as important as finding the right spouse!"

One of our readers sent in a question to us about a business partnership set up as LLC where members couldn't agree -- before the business even gets off the ground! There is so much discord that the LLC members are not even communicating to each other. Alas, they have created their business' legal entity, and an LLC member resignation has implications.

Read what our expert says on this matter.

How to Monetize a Content-Based Website

Another reader sent this question through our Consult Your Guides feature

I am creating an information website about a particular niche in the travel business. This is something I want to start part-time but hopefully grow into something lucrative. How do I generate business out of a content based website? Thanks, Tricia (Baltimore, Maryland)

Read my response to Tricia's question

Starting a Marinade/Salad Dressing Business

A reader from Canada sent in this question through our Consult Your Guides feature:

My brother and I want to go into business from home at first. We have this salad dressing/ marinade that we want to sell. I checked supermarkets and compared and we think that ours is better. How do we start? - Elke, Canada

Read our advice to Elke