If you would of told me that I would be managing a farmers market a year ago I would of thought you were crazy. The opportunity arose quite suddenly to be the manager of our local farmers market. I am no expert on how to run a farmers market, but the following are important concepts to consider when you are thinking of starting a farmers market for your community or taking over one as a manager.Before you even begin to formulate your location, vendors, layout, marketing strategies you need to have a board of directors. This board will be the governing entity of your market. You will need people who are experienced in urban planning, business, the agricultural scene, and active with your community. It is also a good idea to talk to other farmers markets; how did they start their market? What advice do they have? Would they be willing to help you? Once you have your board members selected, you need to come up with a mission for your market. What do you stand for? What do you want your community to gain by your presence?You can’t have a farmers market without vendors. The type of vendor for your market really depends on your location. Here in Asheville, artisan vendors don’t do great. Produce vendors those are the vendors you want. You need to make sure that they are not all selling the same crops. Variety is key. At our market we have five produce vendors. They all have different items for sale. With the new craze of food trucks, it would be a great idea to recruit one or many for your market. My market is a smaller farmers market and I found that it’s best to try to reach out to food trucks that are just starting out. The ones that have been around for a longer period of time may consider your market – if it’s on the small scale or just starting up – a waste of their time because they may not make what they would consider to be a good profit for their time.Marketing is a deal. Based off data the best way to market is using social media; Facebook, Twitter, Instagram,etc. These are valuable assets to any business. You can also use Google Business to let people know about your market. Social media posts are free, which is great when you are just starting out. Once you get your market sustainable cash flow, you can look into boosting posts on Facebook and Twitter. Both Facebook and Twitter offer you to set your advertising budget which allows for less stress; once your budget has been spent the advertising stops until you reset it. Another great idea is to partner up with local businesses that are willing to promote your market using their social media. From my experience going and talking to local restaurants, breweries, kitchen supply stores that do food demos are all great prospects.Location! Location! Location! This is very important to farmers markets. Last year my market was behind a church in their parking lot. There was no road visibility. We lacked new customers due to no visibility. During the off season we worked diligently to find a new location that was more visible, had walk ability, as well as good parking. We are now partnering with a local business to use their parking lot which has road visibility, parking as well as walk ability for our neighborhood. This move was a win-win for everyone involved. Our customers are now their customers, and their customers are now our customers.If you want to start your own farmers market here are some resources to consider reviewing before starting the process. There is a course you can take through the Farmers Market Federation of NY, Cornell University Cooperative Extension of Broome County and SUNY Cobleskill and funded by NYS’s Fresh Connect Program. This program costs $200, after taking the certification course you will be a certified Farmers Market Manager. It is an online course. I plan on taking it in the near future. Another great resource is ASAP. They have a section dedicated to how to become a farmers market manager with Powerpoint slides, PDF’s on farmers market rules and regulations. The best part is that this is a free resource.Resources:http://www.nyfarmersmarket.com/fmm-pro-suny-farmers-market-managers-certification-programhttp://www.asapconnections.org
Payday Loans – A Temporary Solution
Managing you budget can be a bit tricky and quite difficult. At one point or another, you can even fall short of cash days before your next paycheck. The need for instant cash then becomes inevitable. And the quickest and easiest way to get it is with payday loan. Payday loan is a type of short term loan vehicle that allows you to borrow a small amount of money you need to survive until the next paycheck. It is a type of loan which can help you pay off unexpected bill or any financial responsibility immediately. Payday loan therefore is one solution to temporary need for emergency cash.How to apply?Unlike other types of loan vehicles, applying for payday loan is very easy. You don’t have to be backed up with a good credit history to get approved for the loan. You don’t need to present tons of documents necessary for the loan. And you don’t have to wait for days to get the money. All you have to do is to find a creditor with the most favorable terms and apply online, over the phone, or at local offices. Your loan can be approved within 24 hours or even on the same day. The requirements are simple: you need to be at least 18 years old, you should have an active and current bank account, and you should have a regular paying job. Some creditors ask that you should be employed at your present work for the last 3 months. Others may require you to have a checking account. Ether way, these requirements are just for formality sake.How payday loan works?Payday loan works simple. Once you get approved, the money you borrow will be directly deposited to your bank account, or, if you apply in person, you can get the money immediately. The terms of repayment vary. Many creditors require you to write a postdated check as your payment while some directly deduct it from your salary. The length of repayment varies as well. Creditors allow at least 2 weeks for repayment the money you borrowed but it can go for several weeks depending on the term agreement between the creditor and to borrower.Prolonging the repayment of the loan, however, is very detrimental to the borrower. Since this type of loan has high interest rate, repaying it for extended time is not cost-effective. Some payday loan companies offer interest rate as much as 50% per week. Meaning, if you borrow $200, you have to pay $300 back to the lenders after 1 week. The rate gets more complicated once you neglect to pay your creditor back in time. The interest soars and you have more financial problems than you originally have. There is one woman in Kentucky who borrowed $150 from a local lender. She promised to pay the money back plus fee. Six months later, she was still short of cash and discovered that her credit soared to more than $1000. She began receiving phone calls and threats that she will go to jail if she didn’t pay up.The point here is, although payday loan is very attractive and luring for its quick approval during the time of financial emergency, you should always know first if you really need it or not. It also doesn’t mean that even if you are expecting a paycheck in a few days, you can reluctantly apply for this type of loan just to suffice your need for money. Always remember of the price that you have to pay back once you apply for payday loan. Remember that you are on a binding contract with your creditor once your loan gets approved. And this contract can get you into trouble in the future if you were not able to abide to it.There is a saying that you cannot borrow you way out of debt. Always remember this when considering payday loan as a resort to your financial problem. Use payday loan only if you have nowhere to borrow money from. Avoid payday loan as much as possible. But if you have nowhere to go, use payday loan as a final and temporary solution– not as a first option to your immediate financial need.
Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?
There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.
In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.
But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.
Different Types of Financing
One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.
Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.
But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.
Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.
Alternative Financing Solutions
But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:
1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.
2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.
3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.
In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:
It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.
A Precious Commodity
Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).
Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.
Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?