Should I include owners' salaries in my startup budget for loan application?

I don't have any tools or articles off the top of my head, but I can share some tips on evaluating decisions like this. I think there are two key questions to answer when evaluating investment decisions like this. First, what is my outcome I hope to get? Secondly, are there any objective metrics I can use to evaluate whether I've achieved that outcome? The first question is to help bring clarity on why you are making the investment. For example, if you decided to invest $30,000 in marketing for your company, you could do that a lot different ways. In order to deploy those funds most effectively, you need to be clear on the outcome you are trying to get. Is that outcome more awareness of your brand? Or is it to generate new business in the near term? The first objective would lead to one type of marketing, perhaps targeting advertising. The second objective might lead you instead to a lead generation program, perhaps by hiring a third party lead gen firm. Once you've answered the first question, you can move on the second one regarding metrics. This question is important because it leads you to how you are going to measure and hold your organization accountable for the success of the investment. So if you are investing in a lead gen program, you need to quantify how many incremental qualified leads the program should generate which then lead to X number of new customers which leads to X amount of new business. Then you can decide if it's a good investment before you spend the money, and you have an objective measure of whether it's successful as it progresses. Keep in mind that not everything will have objective measures of success. For example, if you are investing in a branding awareness program, it's going to be much harder to measure that success objectively. However, you should still try to have some measure or idea of what success looks like at the end of that investment. In this example, perhaps the firm handling the campaign has some measures they can track based on their experience of whether the campaign was successful. I think answering these two questions before you spend any money within your organization is important, not just major investments. It's a little mental math you should go through in your head each time something new comes up. Why am I doing this (what outcome do I hope to achieve, what needle will this move) and how will I know if it's successful? Sometimes it just 30 seconds in your head, sometimes you get the management team together and talk it out. Hope this is helpful.

That question can only be answered by taking your goals to a marketing company. As a web marketer we try to understand not just what the prospect is looking to achieve (leads, branding, increased profits, etc.), but by what means they feel is the best way to achieve those goals (social media, content messaging, SEO, etc.) It also helps to know how aggressive they want to tackle it. Most companies understand that despite wanting it all, their budget limitations might prohibit an all-out web market assault. With these considerations we develop a proposal that we feel will produce a successful web marketing campaign, providing the best value within whatever limitations they set. In terms of raw numbers, a web marketing campaign itself can be as low as $1000 per month (not very aggressive, even for a small, niche site) up to $10,000 per month, which ultimately may not be aggressive enough for even a large site.

I started my last company and grew it with $20,000 to $12 million in 10 years. And while I was in the early phases, I did put in on my resume.. So, I believe you should. If it is a registered business entity and you are working it, it is still what you are doing, regardless of revenue of the company. If you are performing the tasks in your position, it shows you have been attempting to launch as well as (hopefully) prevents any gaps in employment. It also shows a level of commitment to your venture. We specialize in assisting startups with business plans and structure, so fee free to contact me for additional questions.

Generally speaking - having access to more capital is a good thing - particularly when you aren't hemorrhaging equity to get access. Have you talked to the bank about closing on your "need" amount, and having them convert the remainder into a line of credit? Beyond that - this really comes down to a few loan terms, and some math. How does it impact the payment? Are you comfortable with the payment on the higher amount? How does it change your break even point at the cash flow level? Are there prepayment - early payment penalties? If so, are they worth the additional capital in the event you don't utilize it and want to pay it down? How is the loan interest calculated? Is it simple interest or amortized? In the case that its simple interest, you'll pay that interest regardless, because its rolled into the loan from the start. In any event - best of luck with the upcoming launch and solving the marketing challenge! Happy to help you dig into that further! Ryan Rutan

Rather than using a shot-gun approach which could quickly back-fire on you - because "its a small world", I would qualify them and determine the odds of your deal obtaining approval at terms which would be acceptable to you. Typically, providing an executive summary should give them enough information to gauge whether you'd bet a fit - or not. Additionally, there are many pretender-lenders who are simply brokers promising the world in exchange for upfront fees - who promise you the world with no possibility of ever delivering. A well presented package with all of the pertinent information will save you countless hours and many headaches, while insuring your loan request the best chance of approval in the shortest amount of time. There are many pitfalls in the complicated field of commercial financing. Working with a seasoned professional can make all the difference between achieving your goals, or not. Please feel free to give me a call, and we can discuss your particular scenario to make sure you're on the right path!