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Entrepreneurs need resources to transform their corporate projects into a tangible and profitable business. Small and Medium Enterprises (SMEs) require capital to evolve, by getting a foothold in the market and to eventually expand.These resources typically allude to what we know as financing. Experts in business administration define it as the mechanism that allows entrepreneurs and companies to acquire the assets they need to launch their production processes. Furthermore, this helps meet the expenses related to them and, in general, aids with the overall development of their initiatives.Funding has no specific origin but comes from various sources, all willing to offer financial solutions to business leaders and their companies, but not without getting some revenue.As a result, the options available to an emerging entrepreneur are diverse:

1. External Financing.

- Bank credit specialising in the SME sector.- The short-term credit granted by suppliers.- The deferred payment to suppliers.- The capital injection by an investor.

2. Domestic Financing.

- The capital of the entrepreneur themselves.- Contributions of the partners (if the company has them).- The proceeds from the productive activity of the company.- The sale of idle assets (those that are no longer used).All these alternatives (except as regards to the entrepreneurial resources), represent certain costs for companies.Funding associated with bank loans must be repaid with interest included. Credit agreed with suppliers will have to be settled by the deadline, otherwise the risk of losing their services or supplies will apply.Similarly, the investor benefits after injecting money into the project. The partners want to get better dividends than to bet their capital in less risky financial instruments. Therefore, although the sale of idle fixed assets represents certain income from capital, this will be lower than what would be achieved from the sale of assets in terms of use.As a result, potential funding partners have to assess your financial situation, consider all alternatives available to promote their projects and define what the costs of each are to make the best decision.They will take into account financial conditions, interest rates, payment terms, fines and penalties for non-payment, and benefits payable by creditors, among others.

An interview with the Co-Founder of inventRight; Author of One Simple Idea Series, Stephen Key is an inventor, author, speaker and co-founder of InventRight, LLC., a Glenbrook, Nev.-based company that educates entrepreneurs in how to bring ideas to market.

1) The idea of "renting" out your ideas is fascinating to me. How did you come up with this as a business model?

I worked at Worlds of Wonder, a startup toy company, in the 80s. I watched the creator of Teddy Ruxpin, the talking teddy bear, collect royalties on every bear that WOW sold. Teddy Ruxpin was the best-selling toy in 1985 and 1986. I can remember traveling to China, looking at the bears roll off the production line, and thinking, Ken Forsse is collecting millions! My father always told me that if I wanted to create wealth, I needed to find a business opportunity that had a multiplying effect and that didn't require my presence. Soon after I arrived back in the United States, I quit my job at WOW.Licensing seemed so straightforward to me. If I could design a product that a company could sell, they would pay me for my efforts. It was and is more or less working on spec.

2) Can you share a few of your most successful ideas that you licensed to other companies?

One of the first ideas I licensed was the Michael Jordan Wall Ball. It was an indoor Nerf basketball game whose backboard was shaped in the image of Michael Jordan. I licensed it to Ohio art. At the time, they were selling Nerf basketball games that had a very small sticker of Michael on the backboard they were boring. The Michael Jordan Wall Ball sold for more than 10 years. Ohio Art also created different versions of the game using other basketball players` likenesses.I am also the creator of a rotating label innovation I named Spinformation. I`ve collected royalties on hundreds of millions of labels. The label has been featured on Nescafe coffee in Japan, Jim Beam`s DeKuyper liqueurs in United States, and Rexall Sundown Herbals. It is currently featured on bottles of water in some national parks as well as colleges.

3) How do you know when you have a good product idea?

You never really know if you have a good product idea, but there are a few indicators I rely on to let me know that I`m on the right track. Does it have a large market? Can it be manufactured easily? Is it easily demonstrated (in other words, without having to educate the consumer)? And of course, does it have a high profit margin?

4) What is your process for validating your idea?

I validate my ideas by submitting them to potential licensees—which is not only easy to do but also affordable. After all, their opinion is the only opinion that truly matters. First I file a provisional patent application. Then I begin submitting a one-page sell sheet that showcases the benefit of my idea. I quickly discover whether or not there is any interest in the idea.

5) How do you find potential companies to license your idea to?

Identifying potential licensees is easy. I like to visit retail stores I think would sell the product. I locate the aisle where similar products are sold; the companies selling products in the same category are my potential licensees. I also use the Internet to flesh out my list. Doing a Google image search generates a lot of similar ideas. I add the companies manufacturing those products to my growing list and contact all of them.

6) How do you protect your idea while you are pitching it? Do you need a patent?

You do not need a patent to license your ideas. Most of the ideas I (as well as my students) have licensed have not been protected by intellectual property, save for a provisional patent application. Companies pay royalties for ideas that are not protected by IP, for ideas that have patent pending status, and of course, for big ideas that require a wall of patents. To succeed at licensing your ideas, what you need to do is have established perceived ownership. I have a new book coming out this month that explains what I mean by that in great detail. It is entitled How to Sell Your Ideas With or Without a Patent.

An interesting option for new start-ups and something that can give a great return on investment is opening a business in a shopping centre. This reflects the fact that this type of complex maintains a constant flow of relevant consumers.However, for a commercial initiative of this kind to succeed, it is essential to gain information on the following aspects: market, selecting the centre, consumption habits of potential customers, paperwork, financing and growth strategies and consolidation. This is crucial because blindly undertaking a project of this scale can devalue your investment.

To successfully implement your business in a shopping centre, put into practice the following recommendations:

- Define your goal. What is your goal? Succeeding in the big leagues, where you will face more intense competition and have to invest more money - or start with intermediate links, which requires an investment of smaller rivals and there will be less income due.- Perform market research. Once you've defined your goal, you must know thoroughly the chosen site. It is no longer enough to know how many people will walk through, but to identify what kind of people too, what kind of offers exhibits the complex and what need can or will solve your business in that place, or if you will create one. Thus, it is essential that you evaluate the site's features, customer profile and know kiosks, and local islands that are already up in their place.- Know your potential competition. Display initiative and visit the places you are interested in for a week for example and at different times. Observe the behaviour of users with respect to established businesses. Identify trademarks displayed on the site; detect who your rivals are and how prestigious they are. This is an important indicator of what you will face, because if you stumble upon a top-end business, your chances of success are reduced - unless your concept is so original and powerful enough, that it overcomes the expectation.- Investigate costs. Weekly costs can range according to the location, the time of year that you wish to trade and floor space, but the average rents are from between £300 - £700 per week.If instead, you want a kiosk or an island to trade from, investment costs and monthly rent per square metre are decreased, but are a function of the total occupation of the allocated space.Moreover, you should not forget the expenses for maintenance; typically represent 10 to 20% of the monthly rent, payable additionally.- Define the ideal business model needed to transform the market need that you detected or created in a conceptual project. You must select the right business twist, the ideal space and give identity to your initiative, one that differentiates you from the competition, but that makes it seem alien to commercial ecosystem of the centre.- Create a solid business project to use all the information gathered to develop your business plan.. At this point, you should be clear about your strengths, weaknesses, threats and opportunities, as well as capital you need to implement your idea.- Comply with the necessary formalities with the managers of the shopping centre and complete the paperwork related to admission to the leasing of space.- Implement strategies from the beginning. As soon as you start your business, you need to engage your employees to your business and differentiate your initiative further, which is only possible with added value. What do we mean? Promote your offer with services or additional benefits.

So that your business plan becomes a tangible and scalable corporate project, it is essential that a document is made outlining the mechanisms you`ll use to deliver to your potential customers.This document is typically known as a business plan, which, according to specialists in business management, is the foundation of your company where you have to map the actions that will make your initiative feasible.Experts say a solid business plan includes 10 essential elements, which we explain below:1. A need to market. Your business must have a purpose. And that is simply to solve a market need and seize an opportunity that no company has capitalised on. Without this basic premise, there is no feasible project.2. Description of the solution. Define your market need, and take actions to resolve it successfully.3. Originality – offering value. You have to establish clearly what makes your business different from the competition. It is essential to analyse the strengths and weaknesses of your opponents, and expose the benefits of your initiative.4. Key players in your business. Who will accompany you on your corporate adventure? Will you have a partner or several? Begin to shape the characters that occupy strategic positions in the structure of your company.5. Target audience. Find out who will benefit from your solutions or offers, that is, who are the protagonists of the market space you are going to attack.6. Size of your target audience. Evaluate your target, determine its size and identify their growth rate. This data will help you to realise your financial projections.7. Marketing strategies. Once you've defined and you analysed your target, you should raise the mechanisms to communicate with them. Search the means by which your offer directly impacts your potential customers.8. Exploration of income. You need to perform financial projections to foresee potential income and expenses. This includes the following components:- Structure prices.- Costs (fixed and variable).- Hometown (probable) of your income.- Expenses.- Profit margins.9. Budget and financing. Determine how much money you require to start your business and encourage its development. Then think about the financing options you can use to test your concept and make adjustments if applicable.10. Plan to cover expenses. You have to develop a plan to ensure the operation of your business in its initial phase. Create some scenarios and calculate how much you would have to sell to meet the needs of your growing business.Your Virtual Office London help many small start-ups become larger businesses by helping them appear more professional through our virtual office services. If you would like to discuss how we can help you please contact the team today, we are always happy to help.

The balance sheet is a financial statement that portrays the economic situation of enterprises in a given period. The analysis of this defines the relationship between assets, liabilities and equity of the business.This document is usually made at the end of the financial year of a company. However, it is feasible to create balances relating to more tightly contested lapses. The following functions of a balance sheet are to:1. Know the total value of assets, liabilities and equity of the firm.2. Identify the origin and use of assets, and evaluate management and repayment of debts incurred by the business.3. Facilitate the historical evaluation of corporate finance.4. Take timely decisions and avoid financial crisis.As anticipated above, the variables included in the balance sheet are:AssetsThese are basically the assets, rights and resources available to companies to generate future economic benefits.According to specialists in finance, assets can be classified into two groups:a) Fixed Assets. This subsection refers to the operational infrastructure of goods, which includes machinery, furniture, transportation equipment, technology and accumulated depreciation. It is also categorised as fixed assets to assets of temporal duration, such as raw materials.b) Current assets. These are fluid property i.e., or those that can be easily converted into money. In this category are receivables, bank accounts business, sales made on credit, potential investments to be sold, products in process, manufacturing, inventory and items under sale.LiabilitiesThese are the obligations of companies in a given cycle. Liabilities are divided into:a) Non-current liabilities. In this subcategory are located long term debts with financial institutions.b) Current liabilities. In this group are debt covenants signed with suppliers documented by invoices and taxes.The balance sheet is nothing more than the value of the business, after subtracting liabilities of the total assets of the company.To prepare the balance sheet, it is necessary to break down this information in two comparative columns (assets and non-current liabilities and current.)The next step is to add assets and compare this with total liabilities. The result of this comparison data reveals the assets of the business.

It`s always important you help to diagnose any financial problems with your new business and chart the path to its success. So, companies need a financial consultant to review their financial status to see what they have done well, what they have done wrong, what resources are available and, based on this, create the right strategies to achieve the objectives outlined.The beginning of 2015 is a good excuse to discuss your company and write down the result of this analysis, so that, throughout the year, you observe your financial developments and, if necessary, implement the necessary changes. But what must include this assessment? Below is the answer:- Review of previous goals. Before creating new purposes, know what goals you fulfilled in the previous year, which objectives were in the pipeline, what difficulties or obstacles on the road and find what you used strategies to meet your expectations. This represents an invaluable learning resource that should not be underestimated.- Planning of new goals. Based on the analysis described above, define the purposes that guide the actions your business. Determine which need to materialise and see if your business is financially prepared to meet them.- Prioritisation of needs. Think of your business requirements and determine which one requires urgent attention.- A look at security. Evaluate your policy; check your coverage, the insured amount, deductibles, and beneficiaries. If you're not convinced, explore the market and find the insurance that offers maximum protection at an affordable price.- Analysis and organisation of debts. Experts in corporate finance clearly recommend you to organise your debts. To do this takes into account payment terms, interest rates, minimum amounts, type of debt, and so on. It also reflects on the origin of your debts so that you avoid harmful financial practices.- Compliance with tax obligations. Did you have tax problems last year? Could you solve them? Prevent fines and other charges that may decapitalise you. Be focused so your mission will be clear what you pay, what you can deduct and when to declare.- Ability to invest. To meet the objectives of your business will need money. Define the capital available for investment and also the resources that cannot be touched.- Projected revenues and expenditures. Think of the fixed costs of your business and the money you intend to enter. It also reflects on extra income and unforeseen expenditures. The goal is to have control over the capital of your company and make timely responses to contingencies.Your Virtual Office London has helped many small businesses start up from across the globe. When you start a business it is important you take advantage of services such as a business consultant who may be able to see areas of growth, weaknesses and streamlining possibilities which could in turn help your business becoming more grounded and ultimately more profitable. A business is consultancy evolving and it can be alot to handle for some new start-ups.

Letting your business grow exponentially in certain periods is not a sure sign of continued development and this shouldn't also be a green light for you to spend money indiscriminately.In fact, every business, whether small, medium or large, should be careful with the economy of their business, whether you are in a boom period or not. It is a must for you to exercise control over the capital of your company, and keep it financially stable.Budgeting is cumbersome and unpleasant for many business leaders. However, it is a core task for companies like yours to maximise the capacity to develop and cope with economic contingencies that are beyond your control.The inherent discipline of creating a budget is key to your project. The budget is for all types of businesses. For a new business, budgeting is an economic platform that helps them avoid mistakes that can bury themselves hopelessly. For large corporate organisations, it represents a useful tool to distribute their capital strategically and to plan an expansion tool. It provides them the necessary discipline to avoid oversights.A basic need: Many think that the budget serves only to give you a starting address to a business and nothing else. This provision is necessary for businesses to raise new goals and achieve, especially when growth rates are above 30 or 40%.The budgets are drawn up each year, but should be tested monthly to know if capital has been allocated to the goals or, if appropriate, corrections made. This is called flexibility, a key feature in corporate survival.Get involved in the finances of your business. Do not let your dream destination be solely in the hands of accountants and lawyers. Naturally you do not possess the knowledge they have, but they are not experts in what you do. So what should you do? Learn a little of both issues and, above all, know what you're getting.Combining these two actions will ensure a healthy and fruitful relationship with money and legal specialists. If you are disciplined in economic terms, no one will stop you.

Corporations are organisations established to manage various businesses. They have different legal rights, accountabilities and obligations, apart from members of the corporate office. When a corporation's bylaws are approved, members incorporate them in the most constructive way to meet your business objective and financial interests.Although corporations establish residence in a specific place, they are allowed to locate the corporate offices of the organisation (headquarters where business and transactions of the day is done) in a different area. The leaders of a corporation are located in corporate and registered offices in different authorities due to a more developed and better chance of profit.

Corporate Offices

The corporate offices are where the organisation has its principle place of operation. These offices are generally known as the headquarters of the corporation. The leaders of the corporation such as supervisors, shareholders and the board of directors all work from and are based at these offices. Corporate personnel also work from these offices and seldom from the registered office of the corporation.

Registered Offices

The registered business address is the legal headquarters of the corporation, the place where the company has been formed. Individuals wishing to take legal action against a corporation must submit legal papers such as process notifications, news or demands of the registered office of the corporation. Employees do not usually do business from the registered offices of a corporation.

Crowdfunding - also called collective financing or collective microfinance is to get multiple small donations to raise money or other resources to finance projects.

Small but effective contributions

British rock group Marillion are usually considered as the pioneers of crowdfunding when in 1997, they were able to finance their first US tour with contributions from fans.So began massive funding appearing in the artistic environments, and thus was born the website Kickstarter, a web platform to fund creative projects. The widespread success of the Kickstarter crowdfunding concept is used today for many purposes, such as financing of political, social or charitable campaigns or to finance new businesses.After Kickstarter, other platforms have emerged as RocketHub , P2P Financial or Potlatch , specialising in social entrepreneurs.

Crowdfunding basically works like this:

1. The creator posts on one of the platforms all the information of the project, its aims and objectives of the funding.2. Contributions made by the public may correspond with different rewards: from a minimum contribution with a corresponding "thank you very much" through average contributions that report for the donor to be named. This goes up to a level of most important patronage that can be rewarded with more exclusive things like dinner with the creators, an exclusive edition or original work, etc.3. Only if the entire amount requested is collected, will the creator receive the money and keep the rewards.4. If the entire amount is not met, the project is postponed or cancelled, and the funds are not allocated to the project.At a time when everyone wonders how to fund your business plan, crowdfunding can be a good alternative. But even with a platform to publish your project, you cannot expect to have pouring donations coming in straight away. On the contrary, to be successful, it is very important to organise a system of diffusion in online and offline networks to publicise the project and the possibility of financing it.This form of financing is another example of how the network can collaborate and cooperate with other people and organisations to take forward projects. Another example would be the crowdsourcing (in which a function is outsourced to a community or group of people).

When one of the partners of a limited liability company dies, the other fellow members may take any of the following acts:If otherwise not stated in the partnership agreement, they should continue with one or more heirs of the deceased.If a term is established in the bylaws for any of the partners who could obtain shares of the deceased partner within the term, then partners may acquire these.The shares of the deceased partner who wishes to acquire these can be purchased by the commercial value of these at death.The company will continue with one or more heirs of the deceased partner, unless otherwise specified. However, the bylaws may provide that within those mentioned, one or more of the surviving partners are entitled to acquire shares of the deceased, the market value at the date of their death. If there is not a reached agreement on the price and payment, terms will be determined by experts appointed by the parties.If there are several partners involved who will acquire the shares, they will be distributed among them in proportion to those held in society.Keep in mind that when acquiring shares of the deceased by the other partners, it is necessary under the necessary provisions that the period provided in the bylaws is met, so that other members can acquire the shares.Make preparations for these kinds of events. The resolution of shares within a private business if one of the shareholders dies is a crucial problem that company directors and owners need to discuss and have correctly recognised. It is not the kind of thing that anguished families and co-directors should need to deal with after a death. There are lots of different possible provisions, which include:

• A previous arrangement that the shares can pass to specific people, such as the shareholder's spouse or children and so on.
• Pre-emption rights in support of current shareholders (or some of them)
• Measures to buy the deceased shareholder's interest, to make estimates on the valuation and possibly time to pay
• A cross-option contract. This is made amongst the shareholders for the sale and acquisition of a late shareholder's shares and also occasionally those of the family members too. This in tandem with life insurance policies to deliver the money that pays for the shares, should the situation arise.

If you found this article helpful you can read more insightful blog posts in our company formation blog section.