5 tips for approaching friends and family about your business

At 40billion.com, we provide online tools to help small-business and startup entrepreneurs increase access to funding and resources by leveraging their social networks, including friends and family. Here are 5 tips that we give to entrepreneurs to help them approach friends and relatives about their business:

1.  ASK FOR ADVICE & REFERRALS, NOT HANDOUTS

When you approach friends and family about your business, just share your idea in a conversational manner, and ask them for their advice, feedback, or referral. People are usually glad to give you their point-of-view if they think their advice or feedback may be helpful. And, if they really believe in you, they will either offer to help or they’ll be willing to refer you to someone who can help.

2.  FORMALIZE A LOAN OR DISCOUNT

Businesses often get started with a loan from the entrepreneur’s friend or relative, but it can be difficult to manage the relationship, especially if the loan is not formalized with a written agreement. Create a formal loan agreement with details of the loan, including what is owed, when payments are due, and any consequences for missing payments. Even if you’ve promised a discount to your friend or relative in exchange for a loan or referral, put it in writing and provide a discount coupon that can be redeemed. This may significantly reduce the risk of ruining your personal relationship over business.

3.  GIVE A PRESENTATION

Are you serious about your business? Then give a business plan presentation to your friends and family, and show them. This is your chance to display your professionalism and passion, while getting free advice and feedback from people you know. The result could get you closer to the funding, resources, and customers you need to get your business up and running.

4.  POST ON SOCIAL NETWORKING SITES

Add a description of your business to social networking websites, such as Facebook and LinkedIn. This easily allows your friends and family to read about what you’re doing and spread the word to other people they know. So, instead of you going to them, they will come to you and ask about your new business.

5.  KEEP IN TOUCH

Be sure to thank your friends and family who supported you or helped you spread the word. Then, be sure to keep the lines of communication open by sending them regular company updates to let them know that their support has been put to good use, and you’re achieving those milestones that you set in your business plan. These communications will go a long way toward maintaining good relationships with your friends-and-family supporters, and they will be more likely to support you again as customers, investors, advisors and advocates.

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40billion.com Launches New Features to Help Small Businesses Find Funding

Innovative Tools Help Small Businesses Access Loans and Resources by Networking Online

ATLANTA, GeorgiaJuly 28, 2009 – 40billion.com (http://www.40billion.com) launched new features to enable small business entrepreneurs to raise capital and access startup resources through friends, family, and others in their communities and social networks.

Most small businesses startups fail due to lack of adequate funding and resources, and there is a $40 billion gap in seed funding. By combining innovative tools with the power of the Internet, 40billion.com aims to bridge the gap and enable millions more small businesses to succeed.

About half of all new businesses seek financing from the entrepreneur’s friends and family, but it can be difficult to communicate business ideas and to manage funding relationships with many people. 40billion.com simplifies everything by enabling entrepreneurs to create business plan profiles and launch fundraising drives that are viewable anywhere via the Internet. And it is free to sign up and get started.

Entrepreneurs can broadcast their business ideas and funding requests to friends and family, even post them on popular social networking websites, and the service allows many people to make loans or gift contributions ($25 up to $10,000) in support of a business, while easily tracking and receiving notifications online.

Furthermore, lenders and borrowers may download a promissory note template, which they can use to formalize business loans in a more professional manner. Loan interest rates are negotiated between the lenders and borrowers, and 40billion.com emails notifications when funding offers are received and reminders when payments are due.

As an incentive, entrepreneurs may offer product discounts and freebies in exchange for low- or no-interest funding and other much-needed resources. Soon, for added confidence, those providing the funding will be able to track how the entrepreneur spends the funds that are raised.

There are additional features available exclusively for members, including the ability to schedule online business plan presentations, an open database of service providers, a job board for posting and browsing startup jobs, and a discussion forum (a.k.a., The Elevator) where everyone can share ideas and tips about what works and what does not. Members can even follow a company as it progresses, by signing up to receive alerts whenever the entrepreneur posts company updates.

Advantages over banks and other lending websites

  • No credit score required: raise money for a business, while keeping personal finances and credit score private.
  • Private profiles: protect ideas and limit viewing to invited participants only.
  • $99,000 maximum: raise more funding than many other sites allow.
  • Gift contributions: provide an additional funding option, besides loans.
  • Targeted business network: leverage other entrepreneurs and lenders with similar interests to raise funding, find service providers, post jobs, and acquire customers.
  • Spending tracker: lenders track how the funding is spent by the entrepreneur, in order to increase peace-of-mind, transparency, and accountability.

 

Advantages over conventional friends-and-family loans

  • One-to-many: manage and track hundreds of relationships, transactions and communications at the same time; no need to make a hundred individual loan payments every month.
  • Email reminders: get reminders automatically when payments are due, and get notifications when new company updates, transactions, or offers are posted.
  • Public profiles: expand access to funding and resources by connecting with thousands of people who visit 40billion.com every month.
  • Targeted business network: leverage other entrepreneurs and lenders with similar interests to raise funding, find service providers, post jobs, and acquire customers.
  • Spending tracker: lenders track how the funding is spent by the entrepreneur, in order to increase peace-of-mind, transparency, and accountability.

 

About 40billion.com
40billion.com helps entrepreneurs raise funding for new businesses through friends and family rather than through traditional financial institutions. Using the Internet-based service, entrepreneurs connect with their social network – friends, family, friends of family, colleagues, and others in their communities – to raise capital. 40billion.com’s scalable platform facilitates the funding requests and transactions to make it easier for an entrepreneur to manage many funding relationships. 40billion.com is patent pending. For more information, visit http://www.40billion.com.

THE ELEVATOR discussion forums for entrepreneurs

40billion has just launched THE ELEVATOR business forums, where you can blog, post articles, and get advice/tips for entrepreneurs and funders.

THE ELEVATOR currently has 6 levels:

1. Business Basics

2. Funding Forum

3. Legal Lounge

4. Marketing Maze

5. Product Pipeline

6. Support Space

Visit www.40billion.com/elevator to start posting and reading today. New content is added daily, but feel free to add your own!