In about 85 percent of all business sales, sellers accept a cash down payment and a promissory note to pay the balance in installments. The note is personally guaranteed by the buyer, and it is secured by the business and its assets in case the buyer defaults. Providing owner financing allows sellers to cater to a broader pool of potential buyers.

However, many sellers don’t want to be in the lending business and would prefer not to hold business notes. The good news is: they don’t have to. If you created a business note to unload your company, you can sell the note to someone else. This way you can get instant cash out of the business, instead of waiting to receive periodic payments in the future. You can use the cash for a variety of purposes, including: capitalizing on other investment opportunities, paying off debts, funding college tuition and making major purchases.

How Selling Business Notes Works

Business notes are purchased at a discount-like all notes sold on the secondary market-to make them attractive to potential buyers. Without a discount, there is no incentive for investors to incur the risk of waiting three to five years or even longer to recoup their money. Historically, more than 90 percent of new business owners fail within the first five years. Therefore, there’s considerable risk attached to the purchase of any business note.

You may receive less than the full balance of your note when you sell it. However, the total cash you receive from the down payment and the sale of the note will usually be about the same as you would have received from an all-cash sale of your business. That’s because all-cash buyers can insist on a much lower selling price.

The amount of money you’ll actually receive for your note depends on a number of factors. But as a general rule, for a full purchase, you can expect to be paid 50 to 80 percent of the balance of the note. More specifically, the amount of cash your note can be sold for will be determined by three general components: the current economic environment, the terms of the note (payment amount, interest rate, length of payback, etc.) and the degree of risk or probability that the note holder will lose his/her money.

Criteria for Purchasing Notes

Certain guidelines must be met in order for a business note to be purchased. Naturally, first-position liens are eligible. Here are some other elements investors like to see:

• The business is in a profitable position, with evidence of operating cash flow.

• The buyer has good credit, which generally means a FICO score of at least 625.

• The buyer put down at least 30 percent of the purchase price in cash, which signifies that he/she is truly committed and able to weather down cycles.

• The principal owners have made a personal guarantee on the note.

• The note has been “seasoned,” meaning the buyer has made payments for at least two months. This shows that the buyer is happy with the purchase.

• The note should have a minimum face value of $15,000.00.

Structuring the Sale

There are a number of ways to structure the sale of your business note. You can sell the entire note, or only part of it. The most common way to sell a note is through a “partial purchase,” which involves selling only a certain number of the remaining payments on your note.

Note buyers can purchase any number of the remaining payments in a variety of ways. For example, let’s say you have a note with a balance of $80,000 payable in 240 monthly installments. If you need just $20,000 now, for whatever reason, the note buyer would calculate how many payments would need to be purchased to provide you with that specific amount of cash. Exactly which payments would be purchased would depend on your personal financial situation. You could sell:

• A certain number of the beginning payments on the note. (The note buyer might purchase the first 60 payments, and then you would receive the final 180 payments.)

• A certain number of the final payments on the note. (The buyer could purchase the final 180 payments, passing the first 60 payments through to you.)

• A certain percentage of each of the remaining 240 payments on the note. Perhaps 50 percent of each of the 240 installment payments could be purchased. (You would receive one half of each of the 240 payments.)

So which option in the above example would be best for you? It would depend on your current financial needs and future concerns. All of the alternatives would provide you with an immediate $20,000 cash payment. However, you might choose the first option if you need $20,000 today and require a future monthly cash flow beginning in five years. You might choose the second scenario if you needed $20,000 now and a monthly payment for the next five years until you start receiving your retirement benefits. Or you might choose the third option if you need $20,000 today and also want/need the monthly 50 percent payment for the next 20 years.

The Purchase Process

To purchase a business note, buyers will need to take an assignment of the security instrument (UCC-1 Financing Statement) and receive an endorsement of the promissory note.) But before getting to that stage, they will do the necessary due diligence and closely examine all aspects of the sales transaction of your business. The note buyers will handle all the paperwork for the purchase, from verifying all aspects of the deal and preparing/having recorded all of the necessary documents to make the change.

The note purchasing process takes an average four weeks to complete. If the sale of your business and the creation of the note was “typical,” then you should have your money within four weeks.

Affiliate Marketing is by far, one of the easiest ways to make money online. It is a revenue sharing business relationship between the affiliate who agrees to promote the products or services, and the merchant who offers them.

The affiliate advertises the merchant’s products and services and gets a commission for every successful referral. Every time a customer is referred to the merchant’s site, through the affiliate’s efforts, and makes a purchase, the affiliate gets a share of the profit. No payment is due to the affiliate until successful results are realized. Compensation is based on either number of visits (Pay-per-click), registrant (Pay-per-lead), or commission for each sale (Pay-per-sale).

Affiliate Marketers can earn a few bucks to thousands of dollars with affiliate programs. The opportunity to earn in affiliate marketing can only be limited by the affiliate’s determination, creativity and strategy. It is a brilliant way to earn online, and you do not have to produce your own product or service to make a buck. By advertising your merchant’s products passionately, you get more in return. Profits in affiliate marketing usually start small but can get larger as the campaign starts to build up steam.

There are many ways that an affiliate marketer can do to maximize their profits. If you ask any affiliate marketer how many affiliate checks they would want to receive, they will most likely want to get as many as possible. Some affiliate checks are small, amounting to nothing more than $25.
While others are large and can easily reach the thousands and even more. Over time, these affiliate checks may build up to a really impressive amount. However, making a fortune in affiliate marketing is not instant. You should put in enough work and effort as well. You have to use your imagination to find more ways to attract more web traffic that can convert to sales for the merchant and profit for you as well.

How many affiliate checks do you want to receive? Most affiliate marketers will enthusiastically reply that they want to receive as many affiliate checks as possible. However, is it as easy as it sounds? Does joining many affiliate marketers guarantee more affiliate checks that really amount to something? The answer is No. Most affiliate marketers assume that joining multiple affiliate programs is a wise option. Because, it is very easy to join affiliate programs and there is really nothing to lose, affiliate marketers are tempted to join as many programs they can get their hands on. Thus, they fail to give their affiliate programs enough attention and work that they ought to receive. The maximum potential of the affiliate programs are not realized and the resulting income from these programs will almost certainly be disappointing.

The best way to achieve multiple streams of income is to concentrate on one affiliate program first. Choose a product or service that you can promote passionately. Pick a product in which you have complete trust. The best products and services to promote are those that you use personally. Your prospects will be able to sense your sincerity whenever you promote a product that you have experienced. This will greatly enhance your credibility as well as your product’s marketability and will really encourage your prospect to purchase or avail of the product or service.

As soon as your first affiliate program is making a reasonable profit then you can proceed to joining another affiliate program and repeat the process. “Too much, too soon” is a common pitfall in affiliate marketing. Joining too many affiliate programs simultaneously in the hopes of having multiple streams of income simply does not work.

Focus first on one affiliate program and work on it so that it makes a good profit. Then, go find another promising program and give it your best effort. The question should not be how many affiliate checks you want to receive, but how many “high-paying” affiliate checks can you receive. The answer lies in your determination to succeed and determination to maximize your earning potential. With the right tools, the right actions, and perseverance you can definitely make a good profit out of affiliate marketing.

How much is your time and expertise worth? Its the age old challenge for consultants: how much do I bill my clients? Sadly, there is no set in stone answer, however, here are some tips that will help you establish your rates.

First, lets look at your client’s needs. Why are they hiring an outside consultant, when they have employees? There are several reasons why your client is interested in hiring you as a consultant:

a) third party opinion – employees know where their bread is buttered, so they are less inclined to go against the current direction of the company. As an outsider, there is no concern with offering a different opinion. Your independent opinion can provide a much needed, focused perspective your client’s company needs.

b) you are cheaper – this is what is normally the hardest for new consultants to understand. How can you command $75/hr when your client has reps working for $20/hr. It normally ends up with the consultant charging a lower rates. No more!

The employee:
$20.00 Hourly rate
$ 7.00 Fringe Benefits @ 35%
$10.00 Overhead rate at 50% (computers, office space etc)
$37.00 Total effective pay rate

Hours per year: 2080… Annual salary $76960

The contractor:
$75.00 Hourly rate

Hours per year: 480 (12 weeks, 3 months worth of work)…. Cost of completing the project: $36000

Your client gets the project completed quicker, and you end up saving them over 50%.

c) expertise in a specific area – you clearly can bring something that no other person on their team can. That’s why they called you. As the expert in your chosen field, you can meet your clients needs with quickness and efficiency.

d) motivated to get job done on time, and likely, on budget – your work becomes your reputation. If you take too long, or go over budget, you wont see any future business from your client. However, provide the customer with what they need, under promise and over deliver, and not only will you retain your client for future business, you will get referrals. That’s motivation that no employee has.

Now that you know what is motivating your client, you have the groundwork to start to establish your rates. As show in the second reason for hiring a consultant, while your hourly rate may appear to be more than their employees, it actually works out to be less expensive. Any fears or unease that you have in commanding a hire rate than their employees should now be eased. However, how much more can you charge?

Who is your competition?
Establish what their rates are, and then confirm what can they offer. Can you honestly provide more services, better customer service and come under budget or on time? If your competitors can provide more than you, you’ll find that you may only be able to compete with a lower rate. However, if you can offer more, and have the proven results to back up that claim, you can justify a higher rate.

One key factor to remember is that if you charge a lower rate than your customer, you open yourself up to clients who will demand more of your time (it doesn’t cost them as much as your competition). This may lead to finishing projects past due and scheduling conflicts with other clients. So while you may be able to charge an extra $40 per hour for example, you may end up losing clients, and worse, having client demands cut into your personal time.

If you bill a higher rate, you may surprisingly find that you get better clients, and more referrals. If you can justify a higher rate, your clients will be very specific with you in terms of what their needs are (saving you time). Clients who are willing to pay a higher rate, will referral other clients who are willing to pay a higher rate.

Your rate will impact the amount of business you receive. One term successful consultants learn very early is to understand the concept of value billing. Instead of billing by the hour (which many of your clients will be leery of), consider billing by the project.

By negotiating an amount the client will pay based on the project, you can establish milestones at which payments will be made, and provide added motivation to get the job done and the client signed off quicker. If the project is going to take you 10 hours, consider negotiating an amount for 1.5 to 2x your normal hourly rate. If you get the job done in 5 hours, you get paid the full amount, not for 5 hours. The client is happy because they know what the cost ceiling is, and most importantly, the project is delivered early.

Another benefit of value billing is that you can set up milestones whereby you can get paid. If you advise your client that the project will be completed in say, 6 weeks, and comprise of 3 phases, you can receive payment from them when each phase is complete. Finish early, you get paid early and your client is happy. Finish behind schedule and your client isnt paying for work that isn’t complete yet.

This method helps to improve your cash flow. This is key for any self employed consultant.

So, how much are you worth now?