It is difficult to get a business loan to start a small business.  Family and friends are typically the initial sources of funds for most entrepreneurs.  But as an entrepreneur, how will you get financing while preserving the relationships with these people who are close to you?  Entrepreneur.com shares some tips on how to ask for money from family and friends.

In 2010, 5% of U.S. adults polled said they had provided funding to someone starting a business in the past three years, according to a survey by the Global Entrepreneurship Monitor, a research consortium which includes Babson College. Of those respondents, 32% said the funding went to a friend or neighbor, 26% to a close family member, 11% to some other relative and 8% to a work colleague.

1. Choose a strategy.
Do you want to solicit large chunks of money from a few investors, or small amounts from many?

There’s less pressure associated with small sums. “You’re less likely to ruin a relationship over $25,” says Cornelius McNab, founder of Atlanta-based 40billion.com, which facilitates friends-and-family loans and gifts. Most of the site’s fundraisers target a few dozen people for sums between $100 and $500 apiece.

2. Choose an investment type.
When you accept money from others, strings will be attached, no matter how you structure the transaction.

Consider whether you want to accept and pay back loans, have your friends and family own an equity stake, or offer up a token of thanks – say, some amount of free access to your product or service in exchange for a gift.

If you take on investors, you may have to give up a portion of your company, and perhaps make one or more board members.

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“The show has been prerecorded to give the cast a chance to get away.” – The Announcer, Rowan & Martin’s Laugh-In, NBC (1967)

Maybe that “scientific” scare that cellphones (and associated technology) would affect our brains is true. Our daughter gets up in the morning and immediately checks Facebook. The son rolls out and checks messages on his smartphone. We don’t touch our phone until after our workout at the club and are in the office or home. Yes, we text the kids at school. They text each other, even when they’re sitting across from each other. Their mother uses old-fashioned messaging … she tells us what to do! Recent reports have explored how growing up in the wired, connected world is apparently spiking kids’ attention by short-circuiting their brains. To show our son the difference between yesterday and today, we went online to YouTube together and watched a number of Rowan & Martin’s Laugh-In skits. You know, nothing more than a couple of minute bits strung together. Our son mockingly repeated the German soldier, “Very interesting, not very funny, but very interesting.” He couldn’t/wouldn’t spend a lot of time looking at ancient history stuff because there is just too much going on in the online world.

Lost Connections – He feels (and I have to agree) that if you’re disconnected for a few hours you’ll miss something … the world will pass you by. Social media like Facebook is the fave of our daughter and millions of her peers.

Pick Your Favorite – While the iGeners may set the pace for most online services, the rest of us aren’t lagging behind. Around the world, people of all ages constantly exchange, share information, ideas and content with their communities and folks who count clicks, visits. Source – AddtoAny, Mashable

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“A friend of mine tried one their “special offers”, nearly got himself lobotomized.” – Harry (Total Recall, 1990 – Tristar Pictures)

Another Trip to the Store – The more digital content that’s out there, the more devices the family has, the more storage that is required.  You can never have too much storage, but buying storage unit after storage unit is never easy. 

First, UC San Diego reports 34GB of data, content is hammering our eyes/brain…every day. Then, IDC says that in a few years, the average home will be storing 12+TB of stuff. Since we have a “normal” household, we got a little worried. We have the usual assortment of desktop, notebook, netbook computers around the house –pretty typical of most Silicon Valley homes.  Oh yeah, there’s the full spectrum of game systems because, well…because. And the kids can’t go anywhere without their music buds plugged in. Then there are the obligatory cameras – pocket, point-n-shoot, DSLR – lying around. Yes, and  the smartphones everyone has to have to survive! Can’t forget the DVR.  We time-shift shows just in case we ever get some serious downtime

Gobbling Up Storage
All of them use flash memory and hard drives, and capacity disappears the minute they are turned on/connected. In the old days, we were continually buying batteries.  Today, it’s more storage.

Content Devices – No matter what the work or entertainment device is in the household, they all have something in common.   They all have storage capacity and the ability to upload, download more content to “somewhere.”  We pulled together and counted all of the thingies that could store stuff.

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“Life as a priestess to the virgin goddess Hestia isn’t all that hard, the most important rule is to know who you are.” – Leah (Xena Warrior Princess, TV Series)

Thanks to the one billion (each) consumers in China and India, the world economy is bouncing back. Good, but … We tend to overlook the world’s best market influences…the 3.25 billion females.The truth is, we need to understand them a little better.

Why? Well, the “female economy” will drive $5 trillion in incremental global spending during the next several years. More than 1 billion women work worldwide. More than half of college students are women. Women control more than half of the wealth in the US.So maybe we should have them participate a little more in the industry processes. Of the recent Fortune 500 list of CEOs, only 16 were female.

Load Bearers
Only 16 women were the best qualified to run a major corporation when 484 men did such a lousy job of managing their businesses?Man, even these 16 weren’t “worth” as much as their male counterparts!Sure, we have our tokens – Carol Bartz, at Yahoo; Ursula Burns,  at Xerox; and a few others.Referring to Ms Burns as a token is really a disservice.This straight-talking boss became the first black female CEO on the Fortune 500.  In addition to strengthening a company that’s still rebounding from near bankruptcy, she does her own shopping. That’s leadership by example!

It’s difficult to believe that there aren’t more prepared, enabled, willing to be industry forces, market changers. A recent report by Booz & Co recently noted that more than one billion fell into the not prepared/enabled categories.

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She’s Young, She’s Practiced, She’s Good, She’s Not Alone

“Listen, you moron! I am here to stay and if you don’t wanna’ be in my life, you’ve got two choices. Move out or Ring out! That’s it! End of File!” – Lt. Jordan O’Neill (Demi Moore), G.I. Jane (1997), Caravan Pictures

When we were growing up, our parents used to tell us to go out and play in the street.

They meant it!

Today, entertainment is at our kids’ finger tips – computer video, game systems, standard TV, premium TV, mobile phone entertainment, music, and online Website options.

Nielsen Research says that about 5 percent of all U.S. family entertainment dollars is spent on video games.  With video game households that percentage jumps to 9.3 percent of the monthly entertainment dollars.

Video gaming families also tend to spend more of their entertainment budget at home, rather than activities like eating out, shopping or basic TV cable packages.

But the stereotype gamer has gone the way of the dizzying array of gaming options.

It’s no longer our kid and his buddies barricaded back in his room firing rockets/mortars, jackin’ cars, showing off their skills on his Xbox or PS3.

He’s not locked away online with World of Warcraft and a gazillion other MMOG players.

He’s sorta’ ticked that he and his buds don’t dominate video gaming.

As we saw at E3, Wii has been a game and gaming image changer.

Our daughter got real serious when the Wii was introduced and now plays a lot of tennis and works out every day.

This year, hardware folks announced their version of the Wii controller and showed off their off-the-couch games.

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Keeping Things In the Family
After toiling for years to build a successful business, you are proud of your accomplishments but ready to take some time off, or perhaps retire altogether.  Because you have so much invested in your company – both financially and emotionally – you hate the idea of seeing strangers behind the counter, or in your favorite office chair, or chatting up your suppliers.  Perhaps it has been your dream to create a business your children could enjoy, and maybe even hand down to their children.  Some of the greatest private wealth ever created has come about through the multi-generational ownership of business enterprises.

Benefits to Family Ownership
There are many challenges a business owner faces when it’s finally time to move on.  By selling to a relative, some of these problems disappear or are greatly lessened.  If a buyer comes from your own family, there is no need to actively market the business for sale.  Little due diligence is necessary, because you already know everything about that person’s financial situation and business acumen.  Financing the sale is easier, and there are tax advantages to transferring ownership to a relative, such as via a private annuity or an installment deal.  One might assume the buyer has been intentionally groomed to take over the business, so there is an expectation that the success the company has enjoyed down through the years would continue uninterrupted.  Customers and suppliers alike would see a familiar face and feel comfortable that the business has remained in satisfactory hands.  Finally, if your personal relationship with the buyer is a good one, they will likely welcome your continued involvement with the business, especially during the critical transition period.

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The world’s oldest form of business partnership is alive and well. In fact it is thriving and growing. It is the business partnership of two people who live together; they are called copreneurs.

Copreneurs make a powerful business team. Their special relationship brings a unique synergy to their company. They also face unique pitfalls. It is not an easy task to critique the work of the one you love. The business relationship can easily consume the personal relationship. And then there is the question of how to divvy up the workload.

A well developed and documented Strategic Action Plan that is used on a daily basis goes a long way to alleviating many challenges facing copreneurs. It provides them with something to point to other than each other!

A Strategic Action Plan is a working document that provides the road map to manage and control the growth of the company. It defines the long term measurable objectives for the company and links them to specific actions to be taken in the next year. It is the glue that keeps the partnership together.

It is always assumed that because copreneurs share a very close relationship they also share the same vision for the company. This is not necessarily true and so the first step in the development of the Strategic Action Plan is to clearly define the company’s Mission Statement. There are two kinds of mission statements. The first is a mission statement full of meaningless platitudes; this is easy to develop and quite useless. A real mission statement tells the reader what the company does, who it serves and what sets it apart from the competition. This type of mission statement is very difficult to write but is an essential foundation for the Strategic Action Plan.

The next step in the planning process ensures that the copreneurs have a common vision of where they want their company to go in the future.

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There are nowhere near as many family businesses around as there used to be. They have given way to larger corporations and companies that seem to have very few ties to the modern family. The majority of those family companies and businesses that still do exist are small businesses and may not necessarily have been established as a family business to begin with. However, if the owner wishes to sell the business to free up time or as a result of old age or a loss of interest, and a family member expresses an interest in buying should that owner sell?

Selling a business to family members can either be a harmonious transition that is completed in the best interests of all parties or an absolute nightmare that is worse than selling to a stranger. Whether this falls into the harmonious or nightmarish categories for you depend on the person you are selling it to, and also whether selling is in your best interests. However, you first need to know how to decide whether or not selling is right for you.

The Right Move?

Before selling a business to family members, you need to think about whether it is the right move for you. The first step in this process is evaluating why you are selling to begin with. If you do genuinely want to reduce your role within the company or retire from it and move on, then selling to a family member could be a smart move. For the first reason, it may be easier to negotiate a regular position within the company than if it was sold to a stranger who may not want you around.

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On November 19, 2005, a day after having surgery, I was diagnosed with squamous cell carcinoma cancer. I would compare receiving the news to going to the dentist and being numbed. However, this numbed my whole body. For 20 minutes I rushed through all kinds of thoughts and emotions – shock, anger, “why me?” questions, sadness.

After the 20 minutes, I made a big decision. I decided to live. I decided that all of the emotions and thoughts I was experiencing were not supporting me. I decided right then and there to switch my mind and all actions to that of support and complete cure. At that moment, I was cured.

On January 31, 2006 I received my 33rd and final daily radiation treatment. I am now cancer free. I did not need the doctor to declare that for me; I had already made that decision from the day of diagnosis. I had even told my doctor that at my first appointment.

My whole life I have believed in the power of the mind. The ability to create your outer life from thoughts and emotions from within are undeniable. Nothing is as powerful as your personal philosophy in life. The good news is that your personal philosophy is simply decided by you and your own free will.

In my lifetime, I have been both poor and rich. I have had both sad and happy times. I have lived through tragedies and triumphs. One thing that has never wavered has been my mental approach to whatever has come towards me. Nothing can create wealth and abundance in any segment of a person’s life more than their attitudes and thoughts.

I have seen materially rich people with great poverty of mind and I have seen people in great struggles with an attitude of abundance. Wealth and possessions can flee in an instant, but nothing or nobody can take away your mind and your choice of thought.

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