Online Marketing Lesson for Massage Business

A letter from A young Entrepreneur

I started a business on the Internet about a year ago selling specialty foods. Business has been going well, I’ve picked up a couple of national accounts and I expanded my business. I am really strapped for cash because I need more warehouse space and to hire a couple of people.

About a month ago, I was contacted by a business loan broker. He said that he could get me the $300,000 I needed to get a lease on the new warehouse space, remodel and refrigerate it. I told him that my credit wasn’t good and he said he could work with that and I’d have the money soon. So I borrowed $30,000 from my mother’s retirement nest egg to pay for his fees. I filled out forms and sent them to him two weeks ago.

He promised me that we’d get the money last week, but there’s been a hitch. His mother got really sick and he flew back to her town. He’s been hard to get hold of since he’s at the hospital with her so much. I understand that family comes first, but I’m feeling bad because I want his mother out of the hospital so that he can complete the deal-and it looks like she’s getting worse instead of better. I’m trying to be patient but it’s so hard!

Meanwhile, I’m going to lose the warehouse lease if I can’t sign this week. Should I borrow another $50,000 from Mom to sign that deal and then pay her back when I get the loan?

Signed,
Growing Pains

 

Dear Growing,

Uh-oh! You must never, never borrow from Mama’s nest egg unless you know you can pay her back! That includes what you’ve already borrowed because, from what you’ve already told us, chances are you’ve been scammed.

Borrowing from your mom’s retirement is not a good idea. You better barrow from financial institutions because if you go bust, the family will not suffer. My neighbor recently opened a massage parlour in Malta. One year lager it is the best chinese massage in Malta. How did he finance his $100,000 business. Through banks.

Why do we think so? That’s a mighty big fee you’ve already paid, far in excess of what legitimate appraisal costs would be. Usually, loan fees except for credit reports and appraisals are paid out of the proceeds of a loan. Are we suspicious? You bet and with reason! In the past year, we’ve had several contacts tell us that they’ve had a loan broker promise them big bucks for a business loan if they’ll just pay an advance fee. We’ve also heard that story about the business broker’s mother getting sick in the past. Her condition must be serious and highly contagious because a week at Mom’s bedside is usually enough to take her darling baby boy out of contact permanently.

 

Warning signs:

  • Telemarketers cannot legally guarantee or imply that there is a strong chance of getting a loan.
  • Telemarketers cannot ask for payment in advance.
  • No legitimate lender will guarantee a loan before you’ve made the    
  • Mortgage lenders can ask you to pay for a credit report and an appraisal but legitimate lenders won’t ask you to pay anything upfront for personal or business loans.
  • Bogus brokers often have sloppy paperwork and don’t investigate you very    

As we said, legitmate loan fees are paid out of the proceeds of the loan, not money you’ve borrowed from Mama. Unless the loan is confirmed in writing, don’t make any payments. The loan broker’s actions are illegal if they demand an advance fee but putting him in jail won’t get your money back. Better keep it for someone who can really use it, YOU!


Let’s get down to brass tacks. Evaluate whether to borrow Mama’s money and expand based on whether you can pay her back, when she needs it, out of operations. Putting too little money into the business may be worse than staying where you are and funding expansion from operations. You can also clean up your credit rating – usually, it’s not as hard as you think!

O one last thing, make sure you hire an awesome website design company in Portland Maine. They will save you valuable time because you will not be the best guy to design probably, but you are good at selling your products and services online.

Now…Go Make Money!

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