Starting a business without a loan

Recently I was asked a question at a business seminar: I have an online business I want to accomplish but don’t have the fund or the resources for it. How can I startup a business without a loan? 
Firstly The Blog Guyz website is not a Political Website, however new business startups need to stop drinking the Kool-Aide given to them by the 1% that tells them they need a Business Loan to Start an Online Business. I will share with you exactly what you need to do and what I did to generate over $250,000 a year from a Spare Bedroom/Office in my house.
Here is how you setup your business without a Loan?

You Need to Identify your Cost & Profit before you can decide if you need a loan.

  1. You need to set your price. Before you set up a page for your product you need to offer that product on eBay first. This will help you to set your price. Why is eBay setting your price? eBay will tell you what price your customers are willing to pay for your product. The Internet is so wide open. It is hard to determine why a customer purchased your product in the first place. If you offer a product that has a proven sales track record on eBay at a certain price point then you know that if the product is offered to the right person, the price will not be a reason they will not complete the order. Customer Acquisition is very expensive and every page visitor counts.
  2. Take 5, if you have that many, products that you are planning to sell and set up a separate website for each products. Use Google Analytics to track traffic.
  3. Quantify your Findings. Here is the formula. You know that the monthly cost of a website is $20 from section 1 above. You know how much customers are willing to pay for your product. You know which products can stand alone and be sold on their won websites. Here is your Profit & Loss Formula:
  • The Selling Price if the Product – Seller Fees (Percentage Paid to eBay or Amazon)- Processing Fees (PayPal or Credit Card Fees) – Shipping = Gross Product Profit
  • The Product Cost + Incoming Freight Cost = Cost of Goods
  • Subtract your Cost of Goods from your Gross Product Profit, this will give you a “Product Margin” this is a estimate of how much money you make on every sale. This is the “Profit” part of your Profit/Loss Statement
  • Calculating Loss: Add all your monthly expenses. A website cost $20 a month per product. Office Space and Warehouse Space Rental, Adverting and Promotion. Any expense that you pay that is not directly attached to the production and delivery of your product is Loss. Every business no matter the size has loss of some kind. Being able to determine what your Loss is makes it very important to you survival rate. Sometime Loss is referred to as your Break Even Point.
  • Now How Many Products do you need to sell to cover your loss. Anything above and beyond that is yours to keep. That is your Profit.
  • The Cost of Doing Business is Payroll. Taxes, Fees, Discounts anything that helps you make more sales is a Cost of Doing Business. You Subtract that from your Profit to see where your business hits the “Tipping Point”. The Tipping Point is where the Cost of Doing Business is more than the Profit you are Making. Here is where most businesses fail. The take out business loans to cover the losses from going over their Tipping Point. The Company never make any profit and closes in Debt.

Firstly, you are making an assumption that the monthly cost of a website requires you to get a loan. Our basic package is only $20 a month and I would suggest you take us up in our 45 Day Free Offer to see if there is a market for your product. Our 45 Day Free Offer is great for test multiple products and multiple layouts. There is no limit for the number of 45 Day Trail Website you have. If the site is unsuccessful after 45 Days just drop the site. No strings attached.

Hope this helped:

Christopher Sciullo @CDSciullo blogguyzchris@gmail.com

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