What is Equity Financing vs Debt Financing?

Written by Jose Valdez


If you are starting a business and are looking at your financing options, there are two types of financing available: equity financing and debt financing.

Debt Financing Debt financing means taking out a loan (money that is to be paid back over a certain period of time, usually with interest). Debt financing is either short term (the loan is to be repaid in less than a year) or long term (the loan is to be repaid in more than a year). Lending parties will also look closely atrepparttar business's debt-to-equity-ratio.

When taking out a business loan,repparttar 146734 only obligation ofrepparttar 146735 business is to repayrepparttar 146736 loan according torepparttar 146737 terms that were agreed upon. The lending party does not gain ownership inrepparttar 146738 business.

Many lending institutions requirerepparttar 146739 owner(s) of smaller businesses to personally guaranteerepparttar 146740 loan. In such a case,repparttar 146741 commercial loan becomesrepparttar 146742 same as a personal loan.

If you are starting a home based business and are looking to take out a commercial loan, then you will be definitely be asked to personally guaranteerepparttar 146743 loan.

Advantages of Debt Financing The biggest advantage of debt financing is thatrepparttar 146744 lending party does not gain any part of ownership of your business and your only obligation to lending party is to repayrepparttar 146745 debt. Also, repayment ofrepparttar 146746 loan is typically a fixed expense, accordingrepparttar 146747 terms ofrepparttar 146748 loan.

Dis-Advantages of Debt Financing The biggest dis-advantage is thatrepparttar 146749 business will not have all of its cash flow available to do business. Also,repparttar 146750 interest that is owed can be high.

Equity Financing Equity financing is when you (the business owner) sell an ownership interest in your business in exchange for money. The business owner andrepparttar 146751 investor(s) sharesrepparttar 146752 business andrepparttar 146753 risks that come with it.

Gift Shops - With and Without Walls

Written by Darren Hendricks


Are you a person who likes to berepparttar center of attention ... or do you prefer to deal with people on a one-to-one basis? Are you at your best when lots of people are swirling around you ... or do you prefer calmer surroundings? Are you open to working in an unstructured environment ... or isrepparttar 146703 more traditional set-up of walls and a door your preference? No matter how you answer these questions, our Gift Shop/Kiosk plan can work for you.

Whether you choose to market your items from a Kiosk or a Gift Shop,repparttar 146704 basics of each plan are similar. First we'll concentrate on Kiosks, especiallyrepparttar 146705 pushcart type wagons that are so popular in malls and other high traffic areas, whether indoors or outdoors. Then we'll add in Gift Shop information.

KIOSKS

WHERE DO I START? You've seenrepparttar 146706 charming wagons inrepparttar 146707 mall. They're filled with eye-catching items and surrounded by great foot-traffic and you thought they might be a great way to sell your products. You're right, they can be. Of course, as with any sales plan, it'srepparttar 146708 time and energy you put into it that determines your success.

PLAN A LOCATION After you've maderepparttar 146709 decision to lease one of these attractive carts,repparttar 146710 first step in your plan is to decide which mall you want to be in. Malls may vary widely as to foot traffic, leasing costs, and type of merchandise allowed. Remember, due torepparttar 146711 lack of storage space, you will be constantly restocking your cart and merchandise will have to be carried in on a regular basis, so you may want to lease one nearby, to reduce travel time.

CONTACT THE CART CONCESSION MANAGEMENT Every mall has a Management Office that handles cart leasing. After you have decided which malls you are considering, a letter of introduction and purpose sent torepparttar 146712 office is a good next step. OBTAIN A BUSINESS LICENSE Whichever mall or space you settle on, you'll need a business license and a resale number. Business licenses are issued byrepparttar 146713 city in which you are doing, business. A fee is charged andrepparttar 146714 license is generally valid for one year. Resale permits are required for all business owners and are free. Check with your City Hall for more information.

MERCHANDISE AND VISUAL CONCEPTS After having seen samples of your merchandise, most associations will want to talk with you aboutrepparttar 146715 visual concept you have of your planned display. This is to insure thatrepparttar 146716 quality of goods allowed on their carts and how it is displayed is kept at a certain level andrepparttar 146717 image is consistent with other carts inrepparttar 146718 mall. Keep in mind that your merchandise selection for this type of operation will consist of smaller items such as Patchwork pieces, birdhouses, glass ornaments andrepparttar 146719 like, since storage area inrepparttar 146720 cart is minimal. With many kiosks, everything that does not fit inside a closed and secured cart must be stored elsewhere or removed every evening at close of day.

Note: Most malls offer some storage area but a fee is charged forrepparttar 146721 space andrepparttar 146722 fee varies from mall to mall.

ADVERTISING Generally, malls do not allow you to advertise with flyers inside or directly outsiderepparttar 146723 mall, therefore any advertising you do will need to be done by other methods. If you choose to advertise, decide on how and where you plan to do so and don't forget to add this cost into your budget.

FEES The fee structure for cart leasing also varies from mall to mall, however, there are several fees that are common for cart leasing.

1. Base Fee: This isrepparttar 146724 basic monthly fee charged for leasingrepparttar 146725 cart.

2. Percentage Fee: In addition torepparttar 146726 basic monthly fee, a percentage of your weekly sales will also be charged. Example: $700 per month base fee plus 12% of your weekly gross over $1500.

Note: These numbers are only examples. Fees vary widely based on area and location inrepparttar 146727 mall itself. Some malls offer a lesser base fee for leases guaranteed for over a certain number of months.

3. Security Deposit: This is usually a refundable deposit.

4. CAM (Common Area Maintenance) Fee: A small fee is charged each month that goes towardrepparttar 146728 mall's maintenance ofrepparttar 146729 area aroundrepparttar 146730 carts.

ADDITIONAL FEES In addition torepparttar 146731 basic and percentage fees, security deposit and monthly CAM fee, there may or may not be additional fees. These fees are atrepparttar 146732 discretion ofrepparttar 146733 mall association. They may include:

1. A small, one-time, signage fee that coversrepparttar 146734 making and installing of a sign announcing your business name. This is charged in order to keep all signage uniform.

Note: In some instances, you will only be allowed to display certain signs, (such as "SALE", "We Accept Major Credit Cards," and "Employment Opportunities Available,") and they must be pre-printed. Most malls discourage hand-lettered signs.

2. A nominal, monthly, marketing fee to cover advertising.

3. A small, monthly fee for regular cart cleaning by mall maintenance.

INSURANCE It is generally required thatrepparttar 146735 lessee (you) will provide both general liability and property damage insurance. The mall will stipulaterepparttar 146736 amount and type of insurance required. Premiums for these forms of insurance will vary according to area. Check with your local insurance agents for information and rate quotes.

CASH REGISTER You will be expected to supply your own cash register. A secure "cash wrap" area is built into most carts in whichrepparttar 146737 register is stored and secured by locks, which you will provide.

Note: Carts vary, however, each one is designed for security during off-hours and can be closed and secured, usually by locks, which you provide.

TELEPHONES AND ELECTRIC HOOK-UPS Electrical hook-ups are generally provided for lighting and cash register. Telephone service, however, is often not available. Therefore, if you wish to accept credit cards it is suggested that you use a cellular phone hook-up or a radio transmitted device (credit card machine) for these transactions.

INDIVIDUAL RULES AND REGULATIONS Each mall will have their own rules and regulations and these will vary. Applicable rules will be spelled out on your contract and/or on a separate sheet provided byrepparttar 146738 management. Some of these may be:

1. OPENING AND CLOSING POLICY. Most every mall requires your cart to be open prior torepparttar 146739 opening ofrepparttar 146740 mall and close afterrepparttar 146741 mall has closed. A cart not open during mall hours will usually receive a warning followed by a small fine after a second fault.

2. DRESS CODE: Generally each mall has a dress code, which you will need to adhere to in order to present a professional look.

3. NEATNESS: It will be expected that you will keep your cart and stock neat and tidy in addition torepparttar 146742 monthly cleaningrepparttar 146743 cart receives fromrepparttar 146744 mall staff.

4. SEATING, EATING, DRINKING, READING AND OTHER NECESSITIES: In order to present a professional front, many malls do not allow eating, drinking, reading, or listening to personal tape or cd players while doing business. One chair is usually provided (which will have to be secured at night) forrepparttar 146745 cart operator. Often, sincerepparttar 146746 cart may be operated by only one person at a time and cannot be dosed during mall hours, it becomes necessary to eat or drink on site. In this instance most malls often bendrepparttar 146747 rules and allowrepparttar 146748 cart operator to do so if it is done discreetly and in a short amount of time. br> GIFT SHOPS The basics of opening and running a gift shop are very similar to those of a kiosk with a few important exceptions.

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