How to Raise Capital to Fund Your Business Startup

Do you have an innovative business idea but you’re concerned about finance? Are you right now asking questions like, “How do you finance a startup business?” or, “What are the sources of finance for small business start-ups?”

Indeed, you may have heard it said that what you need to start a successful business is a great idea and not money. However, as much as that may be true, an idea will only get you so far. You must have a plan to turn that idea into reality. And this is where money comes into play.

Definitely, you need money to get your great business idea off the ground. It’s just like the old saying, “You need money to make money.”

At the barest minimum you will need money for things like product development, securing your location, procuring inventory and the resources necessary to complete your services. And, after you launch, you’ll need money to expand the business and of course, money to live on until your business become successful!

So, unless you have the money on hand, startup finance is going to be one of the issues you will deal with when you step out to build your own business.

In this article I want to share with you a few ideas on how you can easily find the needed funds for getting your business off the ground.

How to Raise Capital to Fund Your Business Startup

Sources of Finance for Small Business Startups

There are a number of ways that small business startups can source for capital. These include drawing on personal savings, getting loans from friends and family, and angel investors. But not many entrepreneurs have the privilege of getting funding from these sources. For such aspiring entrepreneurs the option open to them is to access funding through more traditional means like borrowing from the banks.

Unfortunately, getting business startup loans from commercial banks is a big challenge. This is because startup businesses are considered the most risky loans that a bank or lender might encounter.

When you approach even the banks that you have done business with before you may be surprised that they are not keen on committing their funds to your great idea.

Why Are Business Startup Loans Risky?

There are number of reasons why start up loans are considered as risky by banks and lenders. But they can all be classified into the four C’s of Credit which are, collateral, capital, capacity, and character.

Every lender expects you to have some form of capital before you are considered credit worthy. But as a new business it is clear that you’re going for the loan because you don’t have such capital

Also, it is expected that you have collateral. But again, as a new business you have little or no collateral. While in most cases you may use your personal assets you can also seek a co-signer with assets to pledge in order to overcome this demand.

Now, capacity is s track record showing that the business has the capacity to generate enough money to pay back the loan. But then as a new venture you don’t have this track record which the banks or lenders can bank on.

The final “C” which is character is primarily about a good credit rating. While this may not necessarily get you a business startup loan, a poor rating will definitely get you turned away quickly.

From the above it means that before you walk into a bank and demand a business loan you’ll need to prepare yourself.

start up loans are considered as risky by banks

Business Startup Finance Made Easy!

From what we have discussed thus far let’s now look at what you can do to ensure that the sourcing of your business startup capital does not in any way hinder the realization of your dreams.

1. Consider Your Needs

Walking into a bank and telling the loan officer about your idea will not get you financed because the loan officer, or any other funder, doesn’t really care about your actual idea. He or she cares about how you plan to implement it and how profitable it will become. Only then, will you be able to talk money.

This is why people write business plans.

Your business plan will detail your idea in a too-much-information format, which works well when you approach potential financers. You will explain your idea in detail, your business structure, marketing plan, how you will make money, future expansion plan, and your finances, both current and future projections.

You must tell people why your idea will be successful and how you will make it successful. You must tell people how it will be profitable. You mustn’t leave any stone unturned, including the monies you will need for any patents and/or trademarks and insurance coverage.

If you aren’t sure what insurance you’ll need, contact an insurance agency.

Business Startup Finance Made Easy!

2. Consider Your Sources

Once you have your plan in place, think about who is best to approach for money. It might be somebody you know, it might be a total stranger, and it might be both.

As we have mentioned earlier there are many ways startups get the funding they need to open their doors. But your first step should be to look in the mirror. How can you finance your business yourself?

The reason why this is important is, most financers will be more likely to lend you money if they see you have invested your own money into your venture first.

This makes sense because if you’ve put your own finances at risk, you’ll be more likely to succeed. And so, if you can put in some of your own money financiers will have more faith in your drive to make your business a success.

You can bootstrap your own assets to get money. Do you own your car? Do you own your home? Do you have savings, credit, and investments that you can turn into cash?

If you answered yes to any of these questions, you might be able to borrow against or cash in some of these assets to get money in your hands to open your business.

Next, look at other funding options. These include your family and friends, business partners, and crowd funders willing to donate money to your opening costs.

Angel investors are another approach to employ. These are wealthy individuals willing to loan you money in return for a stake in your business. This works, because they also offer valuable advice.

Finally, don’t forget to check out the U.S. Small Business Administration and your local, state, and federal government agencies. All are vested in helping small businesses open and grow in their communities, and many offer loans and grants to cover the costs.

Employ any or all of these to get the money you need to start your business.

2. Consider Your Sources for busines funding

Conclusion

While many aspiring entrepreneurs might find business startup financing complicated it shouldn’t really be. So, if you’re right now seeking for funds for your business startup or you hope to do so some time in the nearest future then you don’t have look any further. Use the above information as you guide and you’ll happier for it!

The 4 Common Small Business Mistakes That Could Destroy Your Business

The statistics are alarming, and most times, they could be demoralizing. But they are true all the same. Fact is, not every business idea will see the light of day and for those that get started, 25% will fail within the first year, 55% within 5 years and 71% within 10 years! (Source)

Now, if you’ve had enough of working as a “wage slave” and you are thinking of stepping out on your own by starting your own business, this really is not to scare you but to help you to be better prepared. Of course, it is a good thing that you’ve got a great idea you that want to share with the world by starting a business. Far too many ambitious and intelligent people have such great business ideas, but never pursue them out of fear. For this can-do attitude, I salute you!

However, while launching a company is easier today than it has been in the past, there are still potential pitfalls which could destroy your great idea. It is better therefore that you learn the potential risks that could sink you business boat even before you start so you can do well in avoiding them instead of regretting later on. Here are some of the major ones which you need to avoid.

Common busines startup mistakes to avoid

Small Business Startup Mistakes to Avoid

1. Hiring the Wrong Staff

The first big mistake you need to be aware of is hiring the wrong staff. If you’ve just got out of education and you’re raring to get your business up and running, then this is one of the big ones you have to look out for. Choosing the wrong people to work at your company may be one of the most expensive mistakes new entrepreneurs are capable of. With a bad enough team, you’ll not only throw a lot of money down the drain, but also grind down your overall business morale.

Recently, you may have met someone you share all kinds of opinions and ideas with, and be just about ready to launch a business with that person. Bringing your friends into the venture will make for a pretty pleasant opening period, true. However, in the long run, those very people may end up killing your business.

It’s better to hire someone who’s annoying but professional than your best friend who knows nothing about business. Hire people with varied skill-sets and a common vision, rather than people you get a good vibe off.

2. Picking the Wrong Price

If you’re running a manufacturing business, then one of the biggest mistakes you can make is bad pricing. This is one thing that will destroy a B2B firm faster than you can imagine, so it’s important not to slip into it.

There are a lot of causes for bad pricing, but one of the most common is a poor grip on your business’s costs. From the payments on your merchant cash advance to the materials you need to logistics, the costs never end! You may hate number-crunching, but don’t be tempted to round up figures, or leave anything out. You can’t afford any laziness here!

You need to be taking everything into account and getting an accurate cost-to-markup figure. While you might be able to recover from bad pricing through good luck and perseverance, it’s not the kind of thing you want to risk.

Before you sign off a single invoice, make sure you understand pricing and all the factors in your industry that influence it.

3. Lack of Flexibility

Another common mistake is going into business with a lack of flexibility. If you land on an absolutely brilliant idea, then you may build it up into this perfect image of everything you want your business to be. After some time overcoming financial and personal obstacles, it’s easy to become attached to this idea. Lean too much towards it, and you could end up putting the big launch off for far too long. Remember that the longer you’re not trading, the longer it will take to actually start turning a profit.

If your business idea hinges on a new program or an app, then this is a particularly big danger you have to look out for. A huge amount of techy entrepreneurs start to develop a program, and won’t consider pitching it until it’s absolutely perfect. This leads to a lot of spending, wasted time, and disgruntled investors. In fact, the only people who benefit here will be your suppliers!

This applies even when your product is matched exactly to your vision. You’ll still need to put money into advertising and distribution to make sure your business doesn’t fizzle out. Grind down too much resources too quickly, and you’ll end up with no product and a pretty substantial debt over your head.

4. Failing to Outsource

Failing to outsource when you definitely should is another common mistake. Again, this is tied in heavily with the software and technology niche. You don’t have to know too much of the technical details to be a successful businessperson. Richard Branson, CEO of this little company called Virgin, didn’t even go to university, and yet managed to expand into too many areas for me to list!

However, you certainly need some kind of expertise in your camp, whether it’s from you or from outside sources. Let’s say you have a great idea for a new program. You know exactly what it’s going to do and how you’d like it to look, but you know absolutely nothing about coding or software development.

Some entrepreneurs are fixed on the idea of independence (or at least reduced costs) and will put off outsourcing for as long as possible. This is something you probably can’t afford to do. Either hire some permanent, in-house experts in your industry, or outsource the work to a trusted professional.

While you probably won’t have all that much to worry about after this, it’s also a good idea to become savvy about your industry. I’m not talking about re-starting your whole formal education here. However, if you hire in some specialists who put across a professional image this isn’t necessarily a reflection of their worth. If you’re spending money on a service that isn’t doing anything for your business, you’d want to know sooner rather than later, right?

Conclusion

When you’re trying to take your business from an idea to a reality, make sure you avoid these big mistakes. I don’t mean to alarm you, but this post is only the tip of the iceberg! Starting a business is a very risky move, which can be undone with all kinds of other factors. However, if you keep yourself informed and on top of all your possible risks, you’ll stand a much better chance of success!

Over to you: Of these common mistakes which do you think is actually the BIGGEST? Share with us in your comments below.

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Top 3 Financial Issues In Business You Might Face As An Entrepreneur (Solved!)

As an entrepreneur, there are a lot of risks and problems you will likely encounter. Unfortunately, many budding entrepreneurs forget that there are a lot of problems that will present themselves once you own your own business. The reality however, is that these issues are critical to your success as an entrepreneur. It is important therefore that you understand what these problems are so you can avoid them and achieve startup success. If, as an entrepreneur, you fall into the trap of these issues, your business can suffer as a result.

One of the most common problems you’re going to face will be issues with finances. Running a business can be very expensive, and you need to make every penny count. Have a look at the following common financial problems you can expect to face as a business owner and what you can do to overcome them.

Common financial issuess entrepreneurs face

1. Lack of Profits

The biggest one, and the one all business owners dread is the lack of profits. Now, there can be many reasons that might cause a lack of profits. Sometimes it might be the time of year, the weather, or the economic climate. Other times it might be your business approach or your marketing strategy.

If you are suffering from a lack of profits you should hire a business consultant to identify where you’re going wrong. This will help you put an action plan in place to improve business once again.

2. Investment Scams

Because you’re struggling with profits, you might wish to put long-term measures in place. This is essential for looking after the financial future of the company. Making investments that you can cash in on in the future is a great way of doing this. However, there are a lot of dangers and scams in the investment world. And you need to know what things to look for so you can take steps to avoid these scams.

Make sure you research the sorts of scams that are quite common and make sure you’re knowledgeable about what they are. Also, make sure you never invest in any company or commodity that isn’t certified.

3. Tax

Tax is something that everyone is subject to. However, as a business owner you’re going to have to sort your own out. This can be a long and stressful exercise, and you might not know how much you need to pay. An accountant will be able to sort these things out for you. So you need to make sure you budget for accountant fees and keep enough cash saved to cover any tax you might need to pay. Try to remember that business tax is a legal requirement and the quicker you get it sorted, the sooner you can get it out the way.

Last Word

When you launch a startup, you’re going to find a heavy strain on your finances. There will be a lot of expenditure to deal with, and everything is going to cost money. And, on top of that, you need to make sure you look out for any financial problems or issues like the ones in this post. They can have a negative impact on how your company operates. So you’ve got to make sure you fix these financial problems as soon as you can.

How to Improve Your Business Skills to Achieve More Success!

Building a successful business requires you having the right business skills. Some of these skills include communication skills, critical thinking skills and writing skills.

It is important to note that the high rate of business failures that is reported every year can actually be traced to the fact that many who dream of running their own businesses lack these skills. Every aspiring entrepreneur should work on developing their business skills for that will ensure they do not manage their business like someone with a blindfold!

So, if you have dreams of running your own business, then you need to make sure you have the right business skills. Even if you already have your own business, there’s always room for improvement. In this post I want to share with you a few ways you can improve your business skills and guarantee more success for your business.

So, here we go…

Improve your business skills

1. Know Your Strengths and Weaknesses

If you want to improve your business skills, you need to know your strengths and weaknesses. This is the only way you can really know what you need to work on. Be honest with yourself. What areas are you lacking in? If you’re unsure, consider asking people you trust what they think. There are also many quizzes and tests online you could use to help you assess what you can improve on.

2. Read Books and Watch Programs

Read books on different business skills and on people who have started businesses. Watch programs. You’ll probably learn valuable lessons, pick up some tips, and feel inspired like never before. Girl Boss is a great book to start with!

3. Research Entrepreneurs You Admire

Can you think of any entrepreneurs you admire off the top of your head? Do lots of research on them. Watch and read interviews and books. You can learn a lot from them and you’ll see that no 2 entrepreneurs are the same. This should inspire you to create your own success story and you’ll want to improve in ways you didn’t think possible!

4. Take Some Courses and Workshops

Rather than improving your skills by yourself, consider taking some courses and workshops. Training connection say that there are all kinds of courses depending on what you want to do. You’re bound to find something that suits you down to the ground.

5. Make Sure You’re Passionate Enough

You should be passionate about the industry you’re in and the skills you want to learn. Passion is the key to sticking anything out, so you need to make sure that you feel good about what you’re doing and the novelty won’t wear off.

6. Learn Something New Each Day

Aim to learn something new every day. Even if you can only do a small amount of revision or something. Make the time to learn something even if you can only use 30 minutes out of your day. If it’s important to you, you’ll make the time.

7. Know When You’re Getting Complacent

Monitor your attitude and know when you’re getting complacent. If you feel like you are, work out what you can do to find that spark again. A good business is a lot like a relationship. You need to find different ways to improve it and keep the spark alive if you want it to last!

Conclusion

Use these tips and you’ll soon improve your business skills in leaps and bounds. Your business skills are important to your success, so make sure you take them seriously. Don’t get lazy or complacent; be honest with yourself and work hard. Working hard now means you can afford to relax a little more in the future. Leave your thoughts below. See you again soon!

5 Emerging Industries You Should Consider As an Entrepreneurs!

The entrepreneurs emerging business ideas

The entrepreneurial spirit is often driven by good ideas. That is why it is often said that entrepreneurs thrive on ideas. Where others will look and see nothing worthwhile an entrepreneur will only take a glance and come up with a load of ideas!

But do you know that all around us, up-and-coming industries are sprouting and that most are already ripe for the taking?

In this article, I want to take a look at some of the new industries raising their heads, and that are expected to make a big impact. Take a deep look at the list. If you feel you have something to offer to one of the industries on this list, then you should give it a shot right away. You could build a website service focusing on any of these areas and who knows, it could become a goldmine!

Alright, here we go…

Emerging Industries #1: Web security

Web security has always been a relevant issue for businesses, as they have to protect sensitive data from prying eyes. However, in recent years there has been a lot of concern from the general public about government snooping and the power that corporations and marketing firms have on us. So, all of a sudden, everyone’s interested. If you think you know enough about the subject, or are just interested in peeling back the many layers of the industry, then why not start a blog? If it gains any popularity, there is plenty to talk about and plenty of products that you could sell from your site.

Emerging Industries #2: Translation

If you have a second or third language – or even more than that – then translation could be your key to success. The world is becoming a much smaller place thanks to the Internet, but there are still plenty of barriers – and language is one of the most obvious. With businesses trading more and more across the globe, there is a big market for translators. Think about the need for online website copy or translating intermediaries in business meetings. Think you have what it takes? Then why not get started today.

Emerging Industries #3: Marijuana

The legalization of marijuana in various states may well create a domino effect for others, and there are many people taking advantage of the new rules. ‘Cannabusiness’ is a very real thing now, and the market is only expected to grow know. There are even cannabis web design agencies, dedicated to giving their knowledge of the market to up-and-coming businesses looking for a break. It isn’t without its risks – your trade will generally be restricted to a few areas – but in the long-term, the established companies can expect to grow beyond their dreams.

Emerging Industries #4: Mindfulness

Successful businesses all around the world are embracing mindfulness, a meditation technique. The practice has been shown to help employees work better and with more focus, and there is also evidence that it can reduce office sick-time. You could start a blog on the subject and sell many of the burgeoning industry’s products, or even think about setting yourself up as a mindfulness coach. There will be plenty of opportunity for clients if you want to go down that route.

Emerging Industries #5: Biotechnology

The biotech industry is expected to be huge in the coming years. While researching and developing highly technical products in a lab might be out of your reach, there is nothing to stop you writing about it. As the industry grows, you can keep up to date with news, and by the time it explodes, you could well be an expert. It’s a definite long game – but that’s the case with all emerging industries.

Conclusion

These are just a few examples of potentially lucrative emerging industries. Getting in now is sure to help you position yourself for a greater tomorrow. If you will commit yourself to learning a little more about any of these industries you could get started right away and only time will tell what the result will be. I hope this information will be of good use to you. There be an action taker!

The Amazing Benefits of Involving Your Business in a Social Cause

The benefits of getting your business into social causesImage Credit: Elliott Brown

As an entrepreneur I’m quite aware that no one sets up a business particularly as a socially conscious endeavor. We all are driven with the desire to make a profit. As entrepreneurs we want to build and grow businesses that help us get rich!

But not minding this fact, we are also aware that businesses don’t have to be soulless money-making machines. In fact, they’re more likely to be successful if they can show that they care about society on a wider level. The evidences are right there for us to see: Businesses who display their values and get behind a cause can be more attractive to customers.

No, you don’t have to choose between making a profit and helping others because a real business can do both. Doing good deeds can benefit your enterprise in many ways, including making your employees and customers more loyal to you.

In this article I want to discuss a few ways that your business can benefit from getting involved in a social cause.

Benefits of Socially Responsible Businesses

1. Customers Like Social Responsibility

One significant reason to be a socially responsible company with values and causes is that your potential clients care about it. People increasingly look for businesses that share their values and make an effort to use their power for good, and not just for making a profit.

Some people want to see that you’re combating any negative effect you might have on the environment. Others are looking for signs that you care about your local community. Studies have shown that a vast majority of shoppers will switch brands to one that supports a good cause or away from one they feel has made an unethical decision.

2. Employee Retainment

It’s not just customers who want businesses to share their values. Your employees are more likely to stick around and be loyal to you if they feel the working environment matches their core beliefs. It makes sense that people don’t want to engage in business practices that they don’t agree with, so if they can go elsewhere they’re not likely to stick around.

Building core values into your company creates a community that your employees are proud to be a part of, where everyone feels that they’re contributing to a wider cause. It can help you find a staff who are a good fit for your company, who look for a firm with agreeable beliefs. They’ll want to do their best for an enterprise that’s doing things they believe in.

3. Making an Investment

Getting behind a charitable cause can be an investment both for the business and for the future of the community they’re helping. For example, Lifeline advocate Issa Asad knows that the free telephone service  offers people on low incomes the same chances as others. As well as being able to talk to friends and family or call the emergency services, they can also use their phone to talk to potential employers or their children’s teachers. As another example, Coca-Cola aims to bring 5 million women in the developing world into business. As well as benefiting Coca-Cola, it’s also a great investment in local communities.

Conclusion

Putting some of your profits to a good cause can help many people, from you and your employees to your local community. If your business needs some personality, instilling some core values will lift it up.

Get involved today and see if your business is not the better for it!

Uncommon Success Traits of Online Millionaires. #2 Is Really NOT Common!

What really is success and how did those who become successful ever get there? Why is it that many step out to start their own online businesses but only a few achieve their dreams?

Is there something that stands out in the life of those who succeed in their quest for glory and honor starting their own businesses? Is there something that we can learn from them?

I’ve always been a student when it comes to success. This is why whenever I have the opportunity I never fail to observe the actions, and inactions, of those who have succeeded in their own fields. And so, in this post I want to highlight some of the uncommon traits of online entrepreneurs who I consider as wildly successful in their own ways. I do hope this post will inspire you as you work your way to own success.

So, let’s get started!

Uncommon Traits of Wildly Successful Entrepreneurs

1. Challenge The Status Quo

This is actually the first trait that I have found in the life of nearly everyone I have observed. Yes, if you look around you would see that there are a lot of businesses being started everyday both online and offline. But the ones that come out great are not those who simply “follow the rules” but those who are ready to stick their necks out and challenge what others have accepted as the status quo. They refused to follow the pack. They were not afraid to risk the unknown. They were ready to step out of their comfort zone.

They may not be trail blazers but the truth is that they simply will not just do things the way others are doing them. And so if you truly want to be among the uncommonly successful online entrepreneurs, no matter the business you are in right now, you must be prepared to challenge what others have come to accept as the norm.

2. Have A Mind To Stick On

One thing you can be sure of is that success does not come in a flash. Sometimes it takes years. And in every entrepreneurial success story that I have ever studied, every one of them was aware of this but one thing that stood them out is that they were ready to stick their heads above the waters until they achieved dream.

As an entrepreneur you must settle it in your mind that you might not see any return on investment for years but if you can stay passionately committed to your dream, you will come out a huge success.

3. Become A Solution Provider

This is another very common trait in the life of wildly successful online entrepreneurs. They were able to observe and discover the problems in their area of operation. But they never stopped at just observing the problems. Having seen these problems they stepped out to provide solutions.

I don’t know which market you are in right now but the truth is that there are problems begging for solutions in that market. If you can position yourself as a solution provider, creating value in your field, people will notice and very soon they will flock to you. And of course, as you help them get what they want, you also will achieve your dreams of building a wildly successful business!

4. Devote More Of Your Time To Your Endeavor

Many who dream of building successful online businesses have the wrong notion that all it takes to succeed online is paying for a domain name and webhosting and then setting up a business website! These ones are taken in with the sweet pie fed to them by the sleek salesmen in the garb of internet gurus. They are filled the prospect of “sacking their bosses” and “becoming their own bosses!” but never thought for once that when they start their own online businesses they might be working more hours than they were working when in paid employment – at least for the first few months or even years!

I don’t really know what your dream is, but the question is how much of your time are you devoting to achieving that dream? Are you spending your time more on dreaming or you are committing more productive hours on achieving your dream? If you truly want to end up with the wildly successful online entrepreneurs then you must be ready to give up a whole lot of things and commit more that business.

5. Play The People Game

This is actually a truly big one. Over the past few years I have come to realize that succeeding online is not just about what you know or what you can do but it’s largely about who you know. It’s not about talent. There are a whole lot of people with talent out there but struggling to make it beyond the average mark. But one thing that stand out for sure is that the wildly successful online entrepreneurs are those who knew how to play the people game.

This is not just about networking. It is something that goes beyond that. You must be able to effectively connect with the right people who will be able to help you on your way to the top. So, whether in dealing with associates, partners, customers or vendors, we must learn to play the game in such a way that our dreams shine through. Connect with the right people and success will happen like a dream!

Let me round off this post by asking, are you truly committed to achieving your dream of becoming wildly successful as an online entrepreneur? If yes, which of these traits can you confidently say you have?

Now, did you truly read through this post or you simply skimmed it believing you have heard it before now? May I say that that mindset is one of the greatest setbacks for many wanting to start their own businesses? Yes, many assume they have known it all but unfortunately; they have the problem of not doing anything about what they know. I passionately believe that this post was not just written to fill up space. You will be sure that you truly read this post is you will take action today on what you have learned. And what do I dream for you? Become among the wildly successful online entrepreneur indeed!

Feel free to share your thoughts in your comments below.

Multivariate Testing: Tactically Improve Your Conversions and Boost Your Business Profits!

Operating a business over the Internet is no different than running a mortar and stone shop. The process demands utmost customer satisfaction. And this can be done by delivering services or products that appeal most to the customer’s specific preferences.

This is why the most successful entrepreneurs are those who constantly solicit for customer feedback and suggestions. After all, it is the buyers that liquefy the flow of profits towards the biz.

(Photo credit: Bruce Clay)

In an online setting, surveillance of the buyers’ inkling can take place through forums, digital questionnaires and e-mailing services. While these are usually effective, they can have major lapses – only visitors with enough time to spare in formulating messages for the company can participate in the discussions.

Plus, there is not guarantee on the objectivity of the reviews submitted. For all you know, some of the items in the site may have been written by the competition to mislead proprietors. This is an unruly ploy, but it does exist in the World Wide Web.

Fortunately, there’s a better alternative in studying the purchasing motivation and partiality of the consumers: multivariate testing.

Snippet of Information About Multivariate Testing

Multivariate testing is an experiment conducted by marketing experts to assess how certain website components are performing in terms of traffic and conversion.

In essence, it mimics the process of holding out two equivalent products and asking the consumers which of the items are more likely to be bought.

Web developers would then create two different versions of a web page and then checked which among the variants provide favorable results in terms of hits, sales and engagement.

Multivariate testing is different from A/B testing in that more than one element can be tested at the same time. Still, web visitors participate in the experiment unconsciously. The variants will be displayed in their screens, and their online activity will be recorded.

Among the things that entrepreneurs can monitor include:

  • Click out rates towards links,
  •  Number of views on the landing page,
  • Volume of items sold,
  • Number of users who signed up for subscription,
  • Etc.

It actually depends on the metric used for the test, and the primary goal of proprietors in conducting the experiment.

How Multivariate Testing Contributes to Online Success

Multivariate testing satisfies various principles in marketing that can guarantee triumph in the industry. For one, it gives businesses a clear direction on how to please their niche. Results from the test practically maps out the most viable steps that they can take to deepen the engagement of web visitors and boost revenues.

At the same time, multivariate testing helps in accelerating optimization process. Given that multiple components can be tested together, they can quicken the pace of coming up with designs to implement for the site. The very same reason allows entrepreneurs to enjoy liberty of dry-running their ideas.

Limitless elements for testing defy the boundary of evaluating ideas.

When these benefits are rolled together, they pave the way for endowment of competitive edge that may not be possible to acquire from any other means.

Multivariate testing increases the chance even of small businesses to have continuous flow of income amidst the tight competition. Given that adopting structures and designs can lure audiences into making an action, multivariate testing is the sharpest tool in slicing through company rivalries and bringing highest possible conversion rates.

Most Effective Ways in Doing Multivariate Testing

Before Multivariate Testing…

1.  Assess the performance of the website – Prior to the experiment, it is best to step back and analyze the strengths and weaknesses of the site including plusses and glitches. Focus on design and web content. Then determine the areas of improvement.

2.  Prepare for the test – Multivariate testing may be straightforward, but it is not a mere push of a button. Make a list of all the elements that can be tested and rank them according to priority. Test the most important components first. You may also consolidate the elements and separate those that need to be tested individually.

3.  Bridge disparities – Come up with a goal (usually concentrated on addressing pressing problem of the site) and formulate hypothesis (probable solutions to the troubles).

4.  List all the possible combinations of the elements to be tested.

5.  Craft the variants and finalize them before running the test.

There are actually loads of programs that you can use to carry out the test. Most of the software can automate the redirection of users towards certain variants, even the generation of potential combinations and recording of data.

But this doesn’t spare them from technical hitches. Always be hands-on during the period of the test. Make sure that the test is running simultaneously and is within the expected timeline. Otherwise, you’ll end up with a bunch of raw data that leads to no definite conclusion.

Then interpret the data wisely after the testing period.

Remember that your skills and knowledge is the most major determinant of multivariate testing success. Have a fill of information about the procedure going through with it. Only then can you have the right armor to thrive in the cyber marketplace!

This post is by Ruben who writes for Maxymiser. Get more info about Ruben on the author box below.

Do You Really Need A Business Plan To Succeed In Business?

It’s yet another Monday and as usual it is time for our Community Timeout here on the Web Income Journal!

(Every Mondays we discuss issues that touch our lives as bloggers and web entrepreneurs. If you have any question or issue you want us to discuss, feel free to send your suggestions using this form.)

Today I want us to discuss a very important issue that many of us have come to accept as essential when it comes to succeeding in business – a business plan.

A few years ago, a successful business mogul from my area came up with a Reality TV show, “The Apprentice” aimed at selecting a few budding entrepreneurs to be mentored by this entrepreneur who had succeeded in different business ventures.

The first qualification for anyone to be selected for the program was a well written business plan and of course, the ability to defend this plan and being able to convince the Judges that your business was worth it!

Watching that reality show and observing the young men and women defending their business plans immediately convinced me beyond any doubt that it is NOT really the best business plan that makes any one succeed as an entrepreneur.

Now, my conviction then was not because I had any problems with writing business plans but because I saw many of these people speak with passion about their intended businesses but it was clear that many of them do not have the knowledge of writing great business plans!

Of course, as expected many of these ones lost out while those with good business plans, strategically laid out and detailing every aspect of their intended businesses, were selected and given the opportunity to participate in the program.

Now, this brings us to the topic of the day…

business plan and succeeding in business
As a Recipe to a delicious meal so a Business Plan to business success, right?

 

Business Plans – How Much Do They Really Contribute To Succeeding In A Business?

Do you really need a business plan before you can succeed in your business?

I decided to bring up this topic after reading a blog post on the Harvard Business Review Blog Network titled, “Great Businesses Don’t Start with a Plan!”

In the post, Anthony K. Tjan, the author of the post, categorically stated that from a survey carried out on hundreds of successful entrepreneurs around the globe, aimed at better understanding what it takes to be an entrepreneur and build a really great business, it was discovered that about 70% of those who succeeded in their business and had a successful exit (that is, an IPO or sale to another firm), none of them started with a business plan!

I’m sure you will want to disagree with that since every business book and advice always go something like this,

“To succeed in any type of business, you must have a business plan. Without a business plan you are heading towards failure because if you fail to plan; you are planning to fail!”

On the contrary however, Anthony wrote:

“[These entrepreneur’s] journeys originated in a different place, a place we call the Heart. They were conceived not with a document but with a feeling and doing for an authentic vision. Clarity of purpose and passion ruled the day with less time spent writing about an idea and more time spent just doing it.”

So don’t worry too much about a business plan. But to guide your thinking, improve a pitch to prospective investors, or better align your teams, consider these design points:

1. Identify and clearly articulate your Heart and purpose. Whether you want to call it vision, Heart, purpose or calling, be very clear on the why of a business — the bigger goal at hand.

2. The team is more important than any idea or plan. The top three priorities should be people, followed by people, and then people.

3. Think big, start small, then scale or fail fast. Per Lederhausen’s advice, set the right first “start small” milestone; it will usually involve seeing people’s willingness to buy or at least try your product.

4. Focus on a well-defined market sub-segment or niche. At least to start, think of where you can potentially be the best. This strategy is almost always more successful than being just another player in a massive market.

5. Understand your business model. How you will make money is more important than pages of Excel showing financials that are simply too hard to predict at this early stage anyway. Understand instead the basic way you will make money – is it through transactions, advertising, subscriptions, etc?

Hmm, you may want to call that breaking the rules to succeed in business!

Your turn: The question is, do you think Anthony K. Tjan and his team got it wrong somewhere? Can you say that from your experience a detailed business plan is necessary before you can start a successful business? Or, do you agree with their findings?

Please let’s have your contribution in your comments below. As usual, make your comments useful and valuable.  That way you will be of help to other readers. So the discussion begin!

Image credit: Flickr user – ocean.flynn

Is Blog Monetization Really A Turn-Off For Blog Readers?

blog monetization with ads

The subject of blog monetization is one that is commonly discussed on many blogs, especially those that are focused on making money blogging. Most of these blogs offer different tactics and methods that are opened to bloggers who want to make money from their blogs.

Among these methods, the most commonly advocated is promoting affiliate products and selling ad spaces on your blog. Selling your own products or services like consulting, freelance content writing and SEO copywriting services are some other methods but these ones are really not very common as most bloggers do not have their own products nor do they know how to turn their specialized expertise into a business!

Now, this is where making money blogging through selling ad spaces have received criticism of recent times with many saying, monetizing a blog through banner ads, google adsense, and other forms of text links, is really an obstruction to blog readers and may even put off many of the readers!

Those in this camp have the notion that a blog should look ‘clean’ without any ads, whether on the sidebar or on the post pages. To them this is how to create a user friendly blog that the readers will love to visit again and again. And that displaying banner ads or Google Adsense on a blog will ultimately drive away readers since they were not on the blog, in the first place, to be sold but for the information they can get!

I’ve really considered this for some time now having heard it from many other bloggers and also heard it discussed on some forums. Personally, I know I switched over from building niche static sites to blogging because I saw the potentials in it. From the very beginning, I saw blogging as a tool, both for marketing your business online and also as a media for making money through selling ad spaces just like any other news media – the radio, television, newspapers, magazines, etc.

I know that many of the probloggers who we revere today actually made their money through running their blogs like any other news media – in fact, many of them still sell ads on their blogs!

Now, there is no doubt that more and more blogs are springing up today most of which are nothing but ad spaces with little content, but can we really say this is enough for us to say displaying banner ads or other forms of ads on blogs is really irritating on blogs?

Today for our general community timeout discussions, I’ve decided to bring this topic before all of us. Let’s discuss the following:

  1. Do you sell ads on your blog or you are of the opinion that blogs should not be monetized with banner ads and other advertising programs like adsense?
  2. Do ads on blogs irritate you? Do you really think they are an obstruction to the usability of the blog? If yes, what in this ads is irritable to you?

I think this is a subject that all of us should be a part of. So share with us your opinion on this subject of monetizing blogs with banner ads and other similar programs. Let’s share our experiences and possibly some tips that will better help us with our blogging success. Post your opinions in the comments below.

(NOTE: Every Mondays we discuss issues that touch our lives as bloggers and web entrepreneurs right here. if you have any question or issue you want us to discuss, feel free to send your suggestions using this form.)

Image credit: flickr user – Comicbase