When it comes to planning the type of online business or the source of funding to finance it, you have some options. First things first, you need to research a lot to figure out which niche is your cup of tea. For instance, if you plan to start a cosmetics store online, there are two kinds of finance. Things depend a lot on what you have been suggested by the bank manager. But in most cases, you will get a loan of some kind, which ranges between five and ten years.

You’ll need to pay some interest on your loan. You also have to be committed to the repayment of that amount you’ve borrowed throughout the loan’s period. It is less likely that the bank manager will advise you to use an overdraft. You’ll need to pay the due interest on whatever amount you have borrowed. In this way, the overdraft will be agreed for a certain period, usually a year or so. And there are chances that the manager of the bank will demand that you pay back the amount by the end of the time that you have agreed upon. As a matter of fact, the manager might ask you to pay off the overdraft within an even shorter time period.

Overdrafts generally are a less secure option of borrowing funds. You need to ask a bank what you’re being offered – especially when you’re required to repay under stringent conditions. Try to learn what the interest rates are. If you’ve decided to get the money from the bank, try to shop around as you need to know whether you’re getting the best deal possible.

Sometimes you will be recommended different type of finance. In general, business angels are business people who make investments into a new / small enterprise in exchange for some shares or ownership of the enterprise. In other words, you need to make it a limited company, so you can make the angel investor a partial owner of your business. And what would be the degree of ownership will depend a lot on how you negotiate things. Here, you could consider getting a solicitor who can advise you.

There are some advantages when it comes to accepting investments of this sort. First of all, you will not need to pay anything back (you need to share profits, though) and there is no question of paying any interest. As you struggle hard to make some money and try to get the business off the mark, finding a venture capitalist could really help. On second thoughts, the angel investor might be a veteran business person with ample capacity and aptitude to provide you with support and knowledge, which could turn out to be invaluable in both the short and long term.

Despite all the benefits, there will be certain restrictions on what you will be allowed to spend to manage your business. Sometimes, angel investors look forward to getting a certain salary from the business in addition to the dividends. You need to understand that this is pretty common these days for shareholders. And in some instances, things won’t go the way you have planned with the investor. As you seek investment from the angel, you need to make extremely careful moves. You need to research and negotiate. Apart from these investment options, you have some other choices depending on the type of online business that you want to run.

The first category is a Corporate Website. It’s not entirely an online business, but it really is one that has the desired web presence to ensure a medium for promotions. Maintaining online presence happens to be essential for all the offline businesses out there that look to attracting new customers and increasing their sales. The basic earnings come from the online presence and the offline sales.

Another category is an Online Shop. It is about the selling of suitable products. Opening and running e-shops is fun. You could sell your own manufactured goods, or you could just sell off your own crafts items or you can just work as an intermediary. Another kind is an Affiliate shop. The online appearance of this kind of shop has to be pretty similar to the looks of an original online-shop. The only dissimilarity between these two types is that when it comes to affiliate shops, you are supposed to sell commodities which you don’t necessarily possess.

Thanks for Reading!

Michael Camire
PDIMI
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