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What You Don't Know
Posted on November 17th 2012
Every small business or start up must start with just a simple idea, a business plan and of course, revenue to get them going. There are a number of ways to get the revenue needed to start a business, including some that while established are quickly becoming outdated. Sure, you know the stereotypical route of going to a bank and asking for a small business loan, but that may not be the right route for a number of industries. Banks are being forced to change how they do business which means that fewer people may qualify for loans. That is why exploring other streams of revenue becomes necessary.
A new business must find a way to make its name known to new customers. Marketing is one of the major ways that this is accomplished but also one of the biggest initial costs for the business to endure. Affiliate marketing, which is a way of marketing products or services for other people is not only a great way to save money for the new business but can be a serious way to generate new income flows. The trick is to find the right affiliate to link with, the one that will allow you to boost your own business's name without detracting from its reputation or worse, without siphoning potential customers off to someone else. Being helpful in business is one thing, being foolish is another thing altogether.
Twitter, Facebook and other social media marketing is another way to generate new lines of revenue for the established and blossoming business. Because so many people are on these sites, there is less time spent finding the right customers and more time focusing on the right messages to get them to "like" your product or service. These types of sites can create an enormous stream of revenue, through several ways - namely, through branding. The majority of consumers and businesses use social media sites for many things, from actual company work to simply checking on the latest updates, and you can brand your company so that you will gain exposure and buzz, which indirectly lead to more consumers, more business, and more profits.
A deeper look into Twitter's business plan reveals an advertising focused model. This incorporates cost-per-click and cost-per-action methods to generate their revenue. As previously mentioned, the amount of social media users on Twitter contribute to the financial growth. Essentially, the traffic that Twitter can channel through a certain link or a trending topic correlates with their increase in revenue.
The way that Facebook makes money is similar in that it largely focuses on advertisements. As one of the biggest social media companies to come up in the past decade and the amount of registered users, employing it as a vehicle for ad space was only a matter of time. Now, Facebook generates most of it's revenue strictly from advertisements and the renewal of those contracts. Further, with these ads, Facebook is able to utilize the personal information from its users to tailor specific ads to certain demographics.
Additionally, sites like Twitter and Facebook help your company become "familiar" - people are far more likely to give you a second glance if they've heard of you or your company before, and social media sites are a great way to accomplish this. More exposure means more buzz, which means an increased possibility of business and profits.
Another option allows the common person to invest a small amount in a business that they believe in. These small funds are added together to create real business investment accounts that can be what is needed to get a new business off of the ground. One of these options has a five dollar buy in with the goal of getting a set number of investors into the program before the company is launched. Investors will recoup their original investments and will be able to either take it back as cash or to reinvest into a new business venture.
These ideas and many others are described in full on a number of sites including income.com, which is a resource for small business owners that provides tips for running a business and ideas for new businesses.