Starting a Business With a Friend: 4 Things to Consider

The ultimate question: Could you and your friend make the perfect business duo? The answer may be more complicated than you think. You love spending time with your friend and the idea of becoming entrepreneurs together. Why not fulfill your dreams with each other? Companies like Airbnb and Ben & Jerry’s had success in this area — they all started from friendships.

But much more goes into starting a business with a friend. You may make great business partners, or you could wish you had taken your venture solo. Before making any financial decisions, analyze the pros and cons and ask hard questions. For example, will you equally invest? Who will take on which tasks and responsibilities? Sift through the easy and hard questions to see where your business friendship lies.

To help you and your friend make a confident and informed decision, skip to our flowchart or keep reading.

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Questions to Ask Before Going Into Business With a Friend

Before jumping into your business plan, ask the hard questions. These can be tough to ask and answer, but they could save your friendship from a business relationship gone sour.

Question 1: Do You Share the Same Values?

Depending on your life stage and goals, your values could differ greatly from those of your potential business partner. You may appreciate living a relaxed lifestyle that gives you the financial freedom to do what you love, while others may value a fast-paced lifestyle filled with activities and long workdays. Differences in values could spark tension in your business relationship.

Ask yourself: Do you and your potential business friend have the same values? If so, great! If not, note your differences and if they’re worth working through.

Question 2: Do You Share the Same Business Goal?

To make sure you’re on the same page, schedule a brainstorming session with your friend. Map out your one-month, six-month, one-year, and five-year goals for your startup. Is your goal to make a certain amount of revenue? To hire a certain number of full-time employees? Or to take your business idea global?

If you have the same intentions, move on to question three. If any of your goals contrast, there may be trouble in paradise. See if you can work through your differences before investing your time and money.

Question 3: Do Your Skills Complement Each Other?

You and your friend each have your own strengths For example, you may be good at time management while your friend is better at sales. For skills you’re both lacking, think about how you’ll fill in the gaps. If you and your friend’s startup plan has a budget for hiring freelancers, or one of you has the dedication to learn something new, this may not be a concern. No matter what, especially if you’re bootstrapping your business idea, it’s essential to talk through it.

If you don’t compliment each other’s needed skills, who will step up and learn them?

Question 4: Do Your Career and Lifestyle Habits Align?

Depending on your business goals, this could be a make or break question for a professional partnership. For instance, one friend may be a morning person while the other’s a night owl. One can take over morning meetings and emails while the other’s responsible for evening website development and customer service.

If one friend’s lifestyle habits don’t suit the other, it may be best to opt for other business opportunities. While starting a business could adjust your habits, it’s easy to fall back into old ones from time to time.

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The Pros and Cons of Doing Business With Friends

Before entering any business arrangement, it’s reassuring to weigh the pros and cons. Could your new business idea benefit or hinder your future relationship and career?

Pros: You Have a Friend Through the Ups and Downs

Starting a business with a friend is similar to marriage — you’re there for each other through the good and bad. Whenever you’re having trouble, you know who you can go to for help. And you’ll be able to do most tasks together. For example, approaching investors as a team vs. going solo could put your nerves at ease.

Cons: You Know the Same People

Instead of getting together for your weekly catch-ups, you could spend all day together! While this can be exciting, it can also be hard to leave work at work. When you both hang out with the same people, there may be little room to disconnect from each other and your business.

Pros: You Understand Each Other’s Strengths and Weaknesses

You likely already know how each other operates and your strengths and weaknesses. Instead of learning the way a new business partner functions, you already have the upper hand. On day one, you and your partner could delegate tasks that fit everyone’s strengths best.

Cons: Your Friendship Could Turn Strictly Business

Your current friendship can be hard to separate from your new work partnership. Taking your work too seriously could stiffen your current relationship. Even after your work’s done, “friend” time may slow down. To have the best of both worlds, over-communicate throughout your entrepreneurial adventures.

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Pros: You Feel Comfortable Communicating

You may have been friends for months, years, or even decades. Having a strong friendship foundation helps bolster your communication in the workplace. Plus, you most likely know how your friend may react to a situation gone wrong. Take note of your friends’ communication habits and foster them throughout your business relationship.

Cons: It’s Easy to Let Emotions Get the Best of You

Be careful not to let your emotions dictate your business decisions. A situation could happen in your friend group that makes its way into the office. To avoid any personal matters in the workplace, come to an agreement — no drama. If situations arise, take some time off to clear your mind, rest, and come back more motivated and inspired.

Pros: You Get to Spend More Time With Each Other

You get to spend countless hours talking and doing business activities together. You could spend all day tackling business tasks and wrap up the workday chit-chatting about your lives. It’s an amazing opportunity to spend more time with your friend without letting other responsibilities slip through the cracks.

Cons: Friendship Failure Could End in Financial and Business Failure

When tension builds in the workplace, it could damage your business outcomes. Not wanting to attend a meeting with your partner could halt business productivity, or worse, end it. To avoid losing profits on your friendship and investments, you should both outline an exit plan if things go wrong.

Tips for Starting a Business With Your Friend

Before toasting to your other half and investing in your passions, properly prepare yourself. Show up to your new business like you would a new job. Have your plan documented before building your business empire.

1. Nit-Pick Your Business Plan

Small issues could grow months or years after starting your business. To avoid future problems, talk through small and large inconsistencies with your partner. Having different lifestyle habits may not be an issue now, but could be difficult after a year of working together.

2. Communicate Often

About one third of projects lack proper communication. Avoid project or business failure by finding a communication method that works for you and your partner. Daily catch-up meetings or weekly email updates are a few examples. Make it enjoyable by sipping your favorite coffee or eating your lunch while playing catch up.

3. Establish and Honor Boundaries

Eliminate tension in the workplace by setting a rubric for working hours. Avoid talking about personal matters until you step away from your work tasks. If you and your partner need to establish additional boundaries, clearly outline them as they come up.

4. Make it Official With Contracts

Once you’ve worked through any complications, put it all in writing. If things were to go wrong, documents and written statements can be referenced in court. To do this, contact a lawyer and draft up a business plan. Any business promises you make should be in writing for any miscommunications. Compensation rates, profit shares, investment contributions, and business accounts are a few things that should be listed on this document.

Before investing your time, energy, or money into your startup dreams, make sure you’re fully prepared. Could you and your friend be great business partners? Take our quiz below to find out. Don’t forget to keep track of your budget and investments throughout the startup process.

Starting a Business With a Friend: 4 Things to Consider appeared first on MintLife Blog.

Source: mint.intuit.com

Hitting the Books Again? Here’s How to Financially Prepare for Grad School

Deia Schlosberg had been working as an environmental educator, teaching students about issues concerning conservation and sustainability. While she loved teaching, she wanted to reach people on a larger scale about the importance of protecting the environment. So she decided to follow her dream of becoming a filmmaker—a dream that would require her to return to school for a graduate degree. She had no idea at the time that it would lead to becoming an award-winning documentarian.

While Schlosberg’s choice may have paid off, learning how to pay for grad school as a working adult can be a challenge. There are various benefits to getting an advanced degree: You can learn more, you can earn more, you can further advance in your current job or prepare for a career change. However, you might also find yourself stressed by the expense and resulting debt of it all, especially if you have kids, a home or other financial commitments. So a big question on your mind could be, “How much should I save for grad school?”

To financially prepare for grad school it’s important to weigh the benefits and stressors that surround getting an advanced degree.

Below are some lessons on how to financially prepare for grad school to help you determine if and when you should go back to school. If you haven’t yet decided if graduate school is right for you, see section 1 for tips on how to decide. If you already know you want to go back to school, skip to section 2.

1. Decide if going back to school is right for you

Getting an advanced degree may seem like a ticket to success, but depending on your chosen area of study, the outcome may vary. For Schlosberg, it was a bit of a risk. It can be difficult to get a break in the film industry, and going to grad school could mean carrying around debt for a long time. Is this the type of outcome you would be willing to accept?

According to Emma Johnson, best-selling author, career consultant and founder of Wealthysinglemommy.com, there are a few things you can do to help you decide whether or not going back to school is right for you:

  • Do your homework. When considering how to pay for grad school as a working adult, research your degree options and the jobs to which they might lead. Compare cost and compatibility—for instance, will classes for the program align with your work schedule? Once you’ve determined what kind of occupation you may pursue after grad school, search online for information about that occupation’s average earnings.
  • Solidify your goals. You may find clarity in writing out your goals for going back to school. Some benefits are tangible, like earning more money, building a professional network and gaining skills. Others might be less tangible, such as finding personal fulfillment. Once you know your goals, it will be easier to determine if a graduate degree makes personal and professional sense.

“Your savings should not only depend on tuition but also what the degree is—i.e., how easy it will be to repay once you are working in the desired field.”

– Deia Schlosberg, filmmaker
  • Give your degree program a test run. Consider taking classes that relate to the degree you are interested in getting in grad school. These classes can give you a taste of the subject matter you’ll be studying and help you meet people involved in the field. Also, if prerequisites are required for your advanced degree, they often cost less online or at a community college, which is important to remember when thinking about how to prepare your finances before grad school. Make sure the course credits will be accepted at the graduate school you plan to attend.
  • Take a hands-on approach. To level up in your existing career or find out what it’s like in a new field before making the change, get some work-related experience first. For instance, to learn more about moving up in your own field, get out and meet those higher level professionals by attending conferences and networking events. The same tactic applies if you want to change careers.

2. Know how much you need to save

How to pay for grad school as a working adult can be complicated, but you’ve decided you’re ready for it. Plus, hitting the books at a time when saving for retirement or your child’s education could be at the forefront makes the task of how to prepare your finances before grad school even more critical.

Understanding how to prepare your finances before grad school becomes more complicated if you’re also budgeting for a retirement plan or child’s education.

Figuring out how much to save for grad school begins with determining the cost of attendance. Here are a couple ways to do that, according to Johnson:

  • Do the research. Once you have found a school and degree that you like, visit the school’s web site. Some schools may provide the cost of tuition, fees and estimated costs for books, supplies and transportation. Costs can vary tremendously, depending on various factors: whether you attend full or part time, whether you attend a public or private school, whether you are an in-state or out-of-state resident and the time it takes to get your degree.
  • Determine your budget. Once you have a handle on the school-related costs, build a spreadsheet that accounts for these costs and projects monthly income and living expenses. Working through a savings plan beforehand can help you financially prepare for grad school by showing just how much you’ll need to budget for monthly on tuition plus living expenses. Once you determine these factors, you’ll get a better idea of what you need to save up.
  • Create a savings buffer. After you determine your monthly costs, pad that number. “Your savings should not only depend on tuition but also what the degree is—i.e., how easy it will be to repay once you are working in the desired field,” Schlosberg says. She saved a little more than she estimated, giving herself an extra cushion to cover some of the potential risk to her finances.

“You may have to downscale your career and current lifestyle to go back to school, which may be a worthwhile investment of time and resources.”

– Emma Johnson, career consultant

3. Allow yourself a flexible timeline

One key factor in planning the timeline for earning your graduate degree: Don’t be in a rush. If you need to, create the time to save. It may not be necessary to go back to school full time or finish on a particular schedule, Johnson says. She mentions these possible paths to earning your degree when planning how to pay for grad school as a working adult:

  • Consider a side hustle. One option is to go to school full time and take on a side hustle. You may not make as much as you did as a full-time employee, but the income can complement your savings. It may also allow you to concentrate more on your degree and finish faster.
  • Attend part time. Go to school part time (nights and weekends) while working. It will take longer, but it will also minimize your debt, which could be better in the long run.
  • Take it slowly. Only sign up for a class or two—whatever you can afford—and continue to work. This part-time “lite” approach may take even longer, but could help you avoid overextending yourself financially or sliding into debt.
  • Take online classes. Consider online programs that could lower the cost of tuition and allow you to continue working full time.
If you’re wondering how to pay for grad school as a working adult, consider attending school part time and taking online classes.

4. Take advantage of potential cost-saving benefits

So you’ve done your research on how much you need to save while determining how to prepare your finances before grad school. But there are ways to potentially cut or eliminate some of those costs. What comes next are some solutions that may help pay your grad school bills:

  • Consider loans, financial aid and scholarships. “I took out some student loans for living expenses, but I tried to pay off my tuition as I went by working through school,” Schlosberg says. Graduate students may also be eligible for different types of scholarships and grants, which is aid that does not need to be paid back. Depending on your area of study, scholarships and grants can also be obtained through federal and state organizations, private foundations, public companies and professional organizations.
  • Ask your employer to pay the tuition. One way to financially prepare for grad school is to talk to your manager or human resources representative to find out if your current employer would help pay for, or fully fund, your degree through tuition reimbursement. This is most likely if you plan to move up the ladder and use your new skills on behalf of the company.
  • Take advantage of in-state tuition. Some people move to the same state as their desired school to try to get a break on tuition. “I moved to Montana and worked a couple jobs for a year before applying so I could get in-state tuition,” says Schlosberg. Whether you are already a resident or you move to a new state, be sure to determine how long you need to be a resident to qualify for in-state tuition at your desired university.
  • Cut back on discretionary expenses. Seemingly small things like adjusting your lifestyle to lower your monthly costs, which could mean fewer lattes and dinners out, might go a long way in resolving how to prepare your finances before grad school. “You may have to downscale your career and current lifestyle to go back to school, which may be a worthwhile investment of time and resources,” Johnson says.
When determining how to financially prepare for graduate school, consider scholarships, in-state tuition and tuition reimbursement.

Financially prepare for grad school and get a new start

Answering the question of how to pay for grad school as a working adult requires significant research and preparation, but some say it’s worth it, including Schlosberg. It not only gave her a whole new start, but a wealth of knowledge going forward to nurture her future endeavors. “Getting a graduate degree gave me the confidence to jump into a new career. I met an amazing network of people,” Schlosberg says.

But an advanced degree may not be a necessity. While it could look impressive on a resume, for many employers, a master’s degree is not a requirement. “Whatever you do, don’t go back to school just for the sake of getting a degree,” Johnson says. When thinking about how to financially prepare for graduate school, make sure it fits into your financial picture and that you’re able to “weigh your sacrifices against future gains,” she says.

The post Hitting the Books Again? Here’s How to Financially Prepare for Grad School appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!)

Hello! Are you interested in starting a dog treat bakery business? Well, good news, this article will tell you what you need to know. Plus, you can sign up for this free training workshop that will teach you how to start your own side hustle baking and selling dog treats.

Hi! My name is Kristin Larsen, and I run Believe in a Budget, a blog about personal finance and my experience with various side hustles. (It feels like I’ve tried them all over the years!)dog treat bakery business

As I’ve written about before here on Making Sense of Cents, my favorite online side hustle is working as a Pinterest virtual assistant. Managing Pinterest accounts is a great way to earn an income entirely online.

But today, I’m here to talk about a completely different side hustle, one that can be run entirely offline if you want (or entirely online, or a combination!).

While I love being able to work from home (or anywhere) on my computer, there is something to be said about stepping away from the computer and doing work that doesn’t involve the ‘virtual world’ – work that requires you to move around a little instead of being planted in front of a screen all day long!

In the case of this side hustle, it involves moving around the kitchen baking up beautiful and delicious dog treats.

Yes, dog treats!

The side hustle I’m speaking of is starting a dog treat bakery and I’m so excited to share it with you today. As a successful dog treat baker myself, I know first-hand how in-demand and lucrative this business can be.

How do you start a dog bakery?

 

How I Took My Dog Treat Bakery from Passion to Side Hustle to Full-Time Job

My dog treat bakery story started over ten years ago when I was an interior architect and designer at my 9-5 job.

At the time, I was the proud dog mom of Bella, a sweet-but-very-high-maintenance pup. Her birthday was coming up and I wanted to give her a birthday treat that fit her ‘diva dog’ personality.

I went to the local pet store and perused the aisles, but all I could find were treats filled with ingredients I couldn’t pronounce that looked like they had been sitting on the shelves for years. After a disappointing visit, I walked out the door and decided that I was going to bake Bella a treat.

This was kind of laughable since baking was not something I had done much of in my life, but I was going to figure out a way to make it work.

I decided to do some research by going to a local bakery and spending a lot of time staring at the baked goods (awkward!), trying to figure out which one I could recreate for Bella. I finally decided on a pretty cupcake adorned with white icing.

I went home, researched dog-safe ingredients and got to work planning Bella’s birthday treat. After a quick trip to Target to buy a mini cupcake tin, I started baking.

About an hour later, her birthday cupcake was baked, iced and ready to serve. Despite its small size, it was a huge success she loved it!

As soon as I saw how much she loved her treat, you could say I became a little obsessed with making wholesome, healthy treats for her. Soon, I started gifting them to friends and family.

I went from developing a single cupcake recipe to developing over 20 different dog treat recipes everything from treat bones to cookies to brownies to cakes!

Pretty soon, the friends and family who were on the receiving end of my gifts were saying: ‘Kristin, our dog(s) LOVED your treats. Can we buy some to gift? Can my friends/family/co-workers/neighbors buy some?’

With those questions, Diva Dog Bakery™ was born!

My little ‘obsession’ quickly became a side hustle, first bringing in $100 to $200 a month, then over $500 a month, just selling through word-of-mouth. It was the easiest money I had ever made!

In a serendipitous turn of events, I ended up losing my 9-5 job a few months after I started Diva Dog Bakery™. It was during the Great Recession, so I couldn’t find a job in my industry anywhere. My unemployment checks weren’t enough and I was quickly going through my savings.

I was initially stuck in a ‘dog treat bakery = side hustle’ mindset,  so it didn’t immediately occur to me to try to turn my side hustle into a full-time business. But when my money was drying up, it finally clicked: I can turn this into a full-time business!

I went all-in on my bakery and hustled hard. I sold at multiple farmers markets every Saturday (shout-out to my parents who helped me ‘be’ in multiple locations at once!), started a successful Etsy shop and also sold products wholesale.

Pretty soon, I went from going broke to making a solid $3,000 to $4,000 per month… despite the economy being in the biggest downturn since the Great Depression. 

Needless to say, I was ecstatic!

The especially exciting thing about my earnings is this was nearly ten years ago when the dog treat industry wasn’t nearly as hot. These days, my efforts could easily bring in double that!

 

The Opportunities in the Dog Treat Industry (Why You Should Start a Dog Treat Bakery)

When I first started my dog treat bakery, the idea of buying homemade cupcakes or brownies or cookies for your dog was still considered a little ‘out there.’

These days, dog owners are much more tuned in to the idea of pampering their pooches and they’re willing to spend money to make it happen.

Here are a few interesting stats for you:

  • The dog treat market is incredibly hot right now and getting even hotter… to the tune of almost 7 BILLION dollars in sales in just 2020 alone! (source)
  • Over six out of ten dog owners are concerned about the safety of the dog treats they purchase. (source)
  • Dog owners are especially interested in purchasing dog treats with wholesome, easy-to-pronounce ingredients. (source)

It’s never been a better time to get started with a homemade dog treat bakery!

 

How Much You Can Earn Baking Dog Treats at Home

If you just want to run a fun-but-profitable hobby, you can easily earn $500 to $1,000 a month with a dog treat bakery as a side hustle.

At this level, you can do all of the work yourself in just a few hours a week. If you have kids, you can also have them pitch in. A dog treat bakery is a great family business!

If you want to turn your dog treat bakery into a full-time business, you can scale it into four figures a month, or even five figures a month.

If you want to scale your dog treat bakery into a full-time business, expect to work 30 to 35 hours a week yourself. If you want to have a heavy farmers market presence, you will probably need to bring on some help for a few hours each week so you can have a presence at multiple farmers markets at the same time. (The best ones are usually on Saturday mornings.)

If things get really busy, you can bring on baking help, marketing help, shipping help and more! You can make this business as big (or as small) as you’d like.

 

Where to Sell Your Dog Treats

As I mentioned at the beginning of this post, you can run your dog treat baking business in a way that suits your lifestyle. You can run it offline, online, or both!

There are so many ways and places to sell your treats, but here are a few ideas to get you started.

Offline:

  • Word-of-mouth sales (e.g., friends, family, co-workers, church)
  • Farmers markets
  • Wholesale to local businesses (e.g., pet stores, veterinarian offices, gift shops) 

Online:

  • Etsy shop
  • Social media for local sales
  • Social media for nationwide sales

 

How Much Does it Cost to Start a Dog Treat Bakery?

Like nearly all businesses, starting a dog treat bakery comes with a few start-up costs, but you will easily earn these back when sales start coming in, or you can even take pre-sale orders! (Have I mentioned that the profit margin on dog treats is amazing?!)

Typical start-up costs for homemade dog treat bakeries in the U.S.* include:

  • $20 to $50 for the initial ingredients, plus a few inexpensive baking tools if you don’t already have them in your kitchen
  • $0 to $75 for treat packaging costs
  • $25 to $50 for a business license
  • Between a $25 one-off fee to up to a $50 per-treat fee to register your treats with your state – this will depend on your state’s regulations

*Costs and laws outside of the U.S. will vary from what is listed here.

 

Are Dog Treat Bakeries Regulated?

Yes, but not nearly as much as ‘people food’ bakeries. (Good for would-be dog treat bakers, but a little sad for our furry friends!)

In the U.S., the exact regulations you will need to follow are decided by your state and sometimes your local area (e.g., county, city). This is easy information to find out by contacting the following agencies:

  • State department of agriculture or feed control office
  • State and local health departments

You can also contact your state’s business agency and tell them you want to start a pet treat bakery. Many states have information on file about pet treat bakeries that tell you everything you need to do.

Don’t be intimidated by this process – in most cases, all you have to do is fill out a few forms and pay a few small registration fees!

 

How to Get Started as a Dog Treat Baker

When I first started Diva Dog Bakery™, I honestly had no idea what I was doing.

Although I saw success pretty quickly, there was a lot of trial-and-error because I had no one to guide me. I didn’t know anyone who owned a bakery, let alone a dog treat bakery.

The one thing I definitely did right at the beginning – and what I recommend to you if you want to become a homemade dog treat baker – was to spend some time in the kitchen learning how to make treats.

Because I wasn’t much of a baker (and maybe you aren’t either), getting a little baking experience under my belt was very helpful.

I also tested out my treats on my dogs and the dogs of some of my friends and family. Dogs may not be able to talk, but you can tell pretty easily which treats they love eating and which treats they’ll turn their nose up at!

With this data, you can start to package up and sell the most-liked treats. You can scale it from there and start to build up your business.

If the idea of going it alone on a dog treat bakery business sounds a little intimidating, I’d like to welcome you to join the Diva Dog Bakery™ course where I’ll teach you exactly how to build a thriving dog treat bakery business!

Here’s what the course covers:

  • How to best make and store dog treats (this is where you’ll practice your baking techniques)
  • How to turn your hobby into a legal dog treat business 
  • How to package your treats beautifully without hours of effort (beautifully packaged treats command premium prices!)
  • How to price your dog treats so you maximize your revenue
  • Where to sell your dog treats: offline, online or both
  • The best methods for accepting payment
  • How to most efficiently and inexpensively ship and deliver your treats
  • The best ways to promote your business so you build up a following of raving fans and repeat customers!

You’ll also receive valuable bonuses, including:

  • My full dog treat recipe book, which includes the most popular and profitable recipes I used in my bakery
  • Guaranteed analysis/nutrition labels to use on your treats (required by certain states)
  • 30 days of free access to the Diva Dog Bakery™ Community so you can get all of your questions answered while you grow your business, including live training

It has been so exciting to help new dog treat bakers launch their businesses! Cheering on every baking success and every business success is truly the best part of my day.

 

Lessons Learned from a Cupcake… and a Phone Call

I like to say that Diva Dog Bakery™ started with a cupcake.

But it really, truly started when, after gifting treats to friends, one of those friends called me and said: ‘Kristin, can I buy a bag of your dog treats?’

Until that moment, I had no idea that anyone would actually want to pay for the treats I had been making as a labor of love.

I learned a valuable lesson that day: there is a market out there for so many different products and services. Whether it’s a product or service that we dream up on our own or that we learn from a course, there is probably someone who wants to buy it from us.

We just have to figure out a way to make that sale happen… and then make it happen again and again!

 

Dog Treat Bakeries are a Great Business to Start

If you’re interested in starting a business that’s ‘outside the box’ of the typical online businesses, then I highly recommend starting a dog treat bakery. 

The industry is booming, the work is enjoyable, the profit margin is fantastic and (maybe the best reason of all) you have the cutest customers!

To get started on your dog treat bakery journey, I’m offering a free dog treat bakery workshop! Check out the sales page here and sign up for the free workshop.

If you have any other questions about starting a dog treat bakery after watching the workshop, just email me and I’d be happy to answer them.

Are you interested in starting a dog treat bakery?

The post How I Earned Up to $4,000 Per Month Baking Dog Treats (With Zero Baking Experience!) appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

Home Buyer’s Guide: How to Purchase a Property, From Start to Finish [Free Download]

Purchasing a home is both exciting and a major milestone in your life, so you’ll want to be prepared for what to expect to avoid a stressful process. Having an in-depth look at the buyer’s journey can help you make informed and confident decisions.

From finding a real estate agent, negotiating offers to getting your keys on closing day, we’ve outlined all the steps of a home buyer’s journey in our free Buyer’s Guide, which you can download here.

The Buyer’s Guide will cover the buyer’s timeline from meeting an agent to preparing for closing day. We’ve outlined the 8 steps in a home buyer’s journey below.

1. Working With An Agent

Every city is filled with thousands of agents, but not all are equal. We believe it is important to choose an agent that you feel confident with. Before you commit to working with an agent, make sure you have a good understanding of the knowledge and experience they offer. It’s important that you ask your questions before making the decision to work with them.

2. Financing Your Purchase

Before you set a budget and start looking for a home, you’ll have to understand what costs to expect when purchasing a home. Here are some of the major costs involved:

  • Deposits
  • Down payments
  • Mortgage insurance
  • Closing costs

You’ll also want to calculate a rough estimate of the down payment that you will be expected to pay. Depending on the price of your home, your minimum down payment can range from 5% to 20%. If you’re interested in learning more about how to finance your home, you can get our free Financing Your Purchase guide here.

3. Searching For A Home

An important part of searching for a home is understanding how the home will fit with your needs and your lifestyle. You’ll want to consider home ownership as well as different types of properties and features. 

Types of Home Ownership

  • Freehold Ownership
    • You purchase the home and directly own the lot of land it sits on
  • Condominium Ownership
    • For condos, you own specific parts of one building: titled ownership of your unit, along with shared ownership in the condo corporation that owns the common spaces and amenities
  • Co-Op Ownership
    • You own an exact portion of the building as a whole and also have exclusive use of your unit

Types of Properties

  • Detached houses
  • Semi-detached houses
  • Attached houses
  • Condos and apartments
  • Multi-unit

Tip: Depending on your budget and desired location, you may need to be flexible to find a home that meets your needs. By being willing to trade some features for others, you’ll have more options to choose from.

4. Negotiating An Offer

When you are making an offer to purchase a home, the purchase agreement should include the essential components listed below. Your agent can help put together an offer that is compelling, while safeguarding your interests and puts you in a competitive position to secure your new home.

You’ll also have the opportunity to choose the conditions that you’ll want in your offer. Some of these may include a home inspection or a status certificate review.

5. Financial Due Diligence

Whenever you make an offer on a house, you need to provide a deposit to secure the offer. The deposit is in the form of a certified cheque, bank draft, or wire transfer; it’s held in trust by the selling brokerage and is applied towards your down payment if your offer is successful.

There are two types of deposits:

  • Upon acceptance
    • The deposit is provided within 24 hours of the seller choosing your offer
  • Herewith
    • The deposit is provided when the offer is made

6. Property Due Diligence

To firm up a deal or educate yourself more on the state of the property, you’ll likely want to have a home inspection if you’re purchasing a house. If you’re purchasing a condo, then your lawyer will review the building’s status certificate.

Home Inspection

A home inspector will assess elements of the home such as the walls, windows, plumbing, heating and roof to judge the condition of the home. This process is non-invasive and is essential to help provide buyers with a good idea of the home’s current condition and the confidence of putting in an offer. 

Tip: The home inspector will provide a summary of suggested work along with a minimum budget estimate for the repairs needed. 

Status Certificates

If you’re purchasing a condominium, you’ll need to obtain a status certificate from the condo board or management for your lawyer’s review. This document will include valuable information about the condo’s budget, legal issues, reserve fund, maintenance fees and future fees increases – and the lawyer can help identify potential red flags

7. Preparing For Closing

Before the big day, you’ll want to keep a checklist of what to do ahead of time. Some of these include:

  • Review your contract
  • Complete a final walkthrough of the home
  • Purchase home insurance
  • Meet with your lawyer
  • Know how much cash you’ll need
  • Secure cash required for closing

8. Closing Day

Closing Day is when you’ll finally get the keys to your new home! In addition to bringing the cash required for closing, you’ll have to sign a few more documents which will include:

  • Mortgage loan
  • Title transfer
  • Statement of adjustments
  • Tax certificates

For the full details on the home buyer’s journey including examples, advice, pictures and sample calculations, download a copy of our free Buyer’s Guide here.

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Source: zoocasa.com