Tag Archives: funding

How to Find Investors for Your Business Idea

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Having a great business idea is just the first step. Getting funding for your new company is the more challenging task that follows up. Often, individuals are discouraged from making their dream a reality because of the limited funding opportunities that are available.

It is possible to find investment for a business idea, even if the economy is slow. Presentation of your idea and having a highly professional business plan will show potential investors that you are serious and that you have what it takes to succeed. The following tips will help you present yourself well and capture the interest of potential investors.

A Great Business Plan is Prerequisite Number One:
Investors are busy people. They have many years of experience in corporate management and they can immediately recognize people who are serious about starting a business and the ones that are making amateur attempts.

To impress a potential investor, you need a solid business plan. Good business plans require a lot of research and hours of preparation. You have to be familiar with the market, with your financial needs and with the specifics of the product that will turn it into a success.

A poorly written business plan will be discarded immediately, which means that your business attempts end before you will have even gotten the chance to prove yourself.

Offer Something Unique and Market-Worthy:
Even if you have the greatest product idea, you may still find it difficult to get funding. The investors will analyze the idea’s revenue-generation potential.

Choose the right market niche. It has to be relatively empty. Trying to compete against major, well-established players will make it difficult for you to get a market share and to begin making money.

Great product ideas are the ones that can be sold easily. Think about practicality and about finding the right target audience. This is the product development you will need to follow, in order to attract investment.

Have Realistic Expectations:
Having realistic expectations and understanding that failure is a possibility will help you negotiate and present your business plan in a solid, professional manner. Investors avoid working with dreamers. Although having a grand vision is great for a start, you will have to learn how to keep it real.

Just think about it! Investors meet dreamers and new entrepreneurs on a regular basis. Realistic expectations and understanding of business processes will help you set yourself apart and achieve the main goal – finding funding for your business idea.

Learn How to Negotiate:
Finding investment for your project will often mean that you will have to negotiate. Learn how to do it in a way that does not alienate people and that helps you achieve your investment goals at the same time.

Very often, interested investors will be willing to offer something but their conditions may be tough. You will have to talk it over, reaching an agreement that benefits both of the parties involved.

Good communication and negotiation skills will help you create a great first impression but they will also keep the integrity of your business idea. The experience that investors have could work against you and this is why you need to have an idea about the compromises you are willing to make and the parts of the process you will remain inflexible about.

Maintain a Healthy Amount of Skepticism:
Understand one very important part of the investment seeking process – if something appears too good to be true, than it probably is a trap.

Investment scams target young, inexperienced entrepreneurs. You could fall for such an offer, finding it impossible to recover and regain your financial integrity.

Refuse investment offers that have very unusual demands, that will bind you for many years to come and that will take away your financial freedom. If you have some concerns, talk to a forensic accountant about the investment option. The forensic accountant will do research instead of you, figuring out whether the funding is legitimate or a fraud scheme.

Author Bio: This is a guest post written by Nick Anderson. He is an experience finance writer and works for Forths Forensic Accountants.

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What It Takes to Start a Small Business

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It comes as no surprise that thousands of businesses, large and small, have gone bust during the current downtrend in the economy. Literally millions of workers have been made redundant, leaving them on their own to carry on. Some have tried their hand at contracting whilst others put their expertise to work at launching small business enterprises. Those enterprises that survived understood what it takes to start a small business in a bear market. Against all odds, many of these small businesses are flourishing concerns today because they took the time to get the facts straight before launching their company.

So You Have a Vision – Is That Enough?

Some entrepreneurs have a grand vision and launch full speed ahead to make that dream a reality. Unfortunately, dreams go both ways as there are nightmares as well. Without a proper roadmap to reach your ‘vision,’ things can turn sour quite quickly. Not only should you have a business model in place, it is imperative to consider financing. Do you have the funds available to launch your business? If not, what type of financing would you qualify for? There are government grants available to certain industries which would often be money that would not need to be repaid in full, if at all. Your vision will certainly take financial backing to evolve, so don’t forget to include this in your plan.

One Step Never to Omit – Careful Market Analysis

It doesn’t matter how wonderful your product or service may be, if there is no demand, why create a supply? Only after careful market analysis should you even consider building a road to your vision. Take a good long look at which companies in your market have gone bust and what it was that led to their demise. Whilst it is true that poor management could have been a contributing factor, it is also likely that those enterprises were offering a product that has become obsolete. Would you even consider designing and manufacturing a typewriter in today’s high-tech world of voice recognition capable word processors? Probably not! If there is no call for what you have to offer, go back to the drawing board. It’s as simple as that.

Roadmap to Success – An Intriguing Business Plan

Unless you are financially independent and have the wherewithal to fund your own enterprise, you will need funding and/or financing. This step towards a successful small business is vital. You will be presenting your vision to a number of financiers, investors or lenders so make it a sound business model. Take time to develop a strategy that can sell your company before it is born. Whether money is being lent to you or you are offering stakes in the company, no one wants to back a loser. Professional help is available but many entrepreneurs benefit from tools such as the Business Model Canvas which enables them to graphically chart out their model, making it attractive to financiers.

Accounting and Record Keeping  

Many newly formed companies feel that hiring an accountant or bookkeeping service would not be worth the expense in the beginning. Unfortunately, this can be a grave error in judgement. Oftentimes new business owners or directors miss vital reporting dates or fail to keep record of expenses or debts which can greatly impact corporate or sales taxes. The reality is that an incomplete report is just as deadly to your business as a nonexistent report. It is far wiser to utilise a professional bookkeeper or accountant than it is to try to save a few pounds. A tiny error can be extremely costly and that is something which has set many companies on the path to financial ruin.

As more and more big companies go under or send their facilities overseas, the rising role of entrepreneurs is becoming increasingly important. Government recognises that SMEs play a huge role in stabilising the economy which should indicate just how important it is to get off to the right start. Develop a good business model for your product/service, research the market thoroughly, sell the idea to the right financial backers and keep accurate records for the taxman. If you follow this advice, you could have a lucrative endeavour that is built on a solid foundation. Too many entrepreneurs join the ranks of ‘here today – gone tomorrow’ so take the time to do it right and you will have a business that can withstand even the test of time.

Adam writes Articles and News for Real Business Rescue and covers all matters relating to company directors facing business distress.  He has covered many articles relating to corporate insolvency and advice and tips about business related cash flow. 

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How Much Capital Do You Need to Start Your Company?

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The process of starting a business is usually associated with that of accumulating large sums for start-up capital and marketing campaigns. Businesses have now moved away from that sort of thinking and have found easier and more innovative ways to get their companies up and running without having to find an outrageous sum of money. This calls for a total change in the mindset of the budding entrepreneur and a level of commitment to the process.

Starting a Business with Zero Capital

This will be a challenging task with many hurdles to jump, but once you are dedicated to the process you will make it. Here are a few tips.

1. Seek a Partner

Partnerships offer a great means of starting a business. Once you find someone who shares your passion and enthusiasm to become your own boss, then you have covered the first base. If you are really serious about finding someone who shares your vision and is willing to put his/her shoulder to the wheel and help build the business, you must be prepared to treat them like a partner and not a hired hand. If you pay someone for an hour, they will give you your money’s worth, but a partner takes the job more seriously.

2. Start Your Business from Home – Eliminate Expenses

You do not want to start your business with expenses hanging over your head, so eliminate those expenses. Start your business from home to avoid the cost of rent. If you’ve found someone to work with as a partner, then you should both start off doing all the work instead of hiring workers. Work it that way until you reach some point of profitability or some transitional point in the business (expansion) that would require added hands.

3. Get a Business Website Going

Depending on the nature of the business, you could start off with a business website. If the business idea does not require a brick and mortar building, then your first option should be a business website. If you do have a brick and mortar, then you can still have a website up and running in a short time. A good domain name is essential to your online presence, so you would want to spend some quality time selecting one. You can still get a good domain name without spending hefty sums. A free site from WordPress or Tumblr will also be a good starting point. You can start advertising your business through blogs or use the social media platforms, and they are all free.

4. Free Legal Advice and Incorporating Your Company

There are lawyers who offer free services, so you can get legal advice and documents that you can modify to suit your business needs. Incorporating your company may have to wait until you start earning, but until then you can register your company as a LLC, which may be the best business structure for now. You can also go through with the IRS procedure as well.

Jack Harding is a business consultant. He enjoys consulting upstarts and blogging about his insights on various business blogs. Visit Wish.co.uk to see how this upstart utilizes fun marketing to maximize its customer reach.

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What Investors Want to Learn From Your Business Plan

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Your business concept is awesome and you know it. But you need startup funds and a way to convince investors that they’ll see a return on investing in your business. The thought of putting together a business plan that will effectively “sell” your business concept to seasoned investors is intimidating, but it’s also essential in getting the funding you desire. A well rounded business plan will provide you with valuable insight into your business, its potential for success, and the areas in which you may want to fine-tune your operating model.

Keep It Simple, Shorty

You always hear, “keep it simple, Stupid” or “KISS” and that goes for an effective business plan as well. But don’t be stupid, instead be smart, short, and sweet. Ten pages or less, absolutely. No one wants to read a really long plan.

In fact, ideally I don’t think you need much beyond great financials and an impressive executive summary. Potential investors are going to ask for whatever additional information they’re interested in whether you’ve written ten pages or 100. If you’ve done your homework and put together an impressive, tight little package, then you’re going to be in great shape. No one wants to read a 50 page business plan.

If your motivation is funding, they’re going to ask for the specific additional information they want. Your plan is more likely to be too long (I’ll call it a data dump) than too short. Too short would mean you’re missing critical information.

Do Your Homework, Then Practice Brevity

Just because you’re writing a succinct (and therefore effective) business plan that hits on the critical elements for potential investors doesn’t mean you shouldn’t do copious homework in preparing that nice, little plan. You absolutely should. Especially when it comes to knowing your financials. The easiest and most accurate way to do this is to build the financials from the bottom up. If it’s a new business, then start by determining your addressable market, then what percent of that market you are going to get, how much are they going to spend (lifetime value), and how much is it going to cost you to get them? If you can answer these questions accurately for the first twelve months, year two, and year three, then your financials are going to be in a good, realistic state for potential investors to pick them apart and (hopefully) like what they see.

The Critical Elements of an Effective Business Plan and Pitch

Your plan and pitch to investors should absolutely address each of these topics:

- What market problem you’re solving
- How you’re solving it
- Target market, size, and segmentation
- Your sales channels
- Marketing efforts
- Competitor analysis and your competitive advantage
- Real financial projections
- Key milestones in your business to date and a timeline of expected milestones to come
- Key team members and advisers championing your success

The Pitch: Turn it Into a Narrative

Once you’ve put your business plan together, ensured it’s not too long, and that it covers all of the important bases, then it’s time to start working on your pitch. I won’t go into too much detail here except to say that people (and don’t forget that investors are people too) love a compelling story. If you can find a way to weave the elements of your business plan into a tale that illustrates how your business is going to solve people’s problems, garner their loyalty, and generate revenue then it’s going to be a lot easier for you to pitch to investors. After all, stories engage our emotions and get us to root for the protagonist to win.

Make your business the hero of your story and back that story up with facts and figures to prove your potential for success and investors will appreciate the work you’ve put in and be much more likely to infuse your enterprise with the funds it needs to get up and running.

About Sabrina Parsons

Heir to a business planning kingdom and CEO of the world leader in business plan and management software (flagship products include LivePlan and Business Plan Pro) Sabrina knows more than a little something about planning, pitching, and managing a startup to success. Sabrina took over Palo Alto Software in 2007 (her father was founder and business planning icon, Tim Berry) and went on to not only beat the odds (approximately 70% of family-owned businesses don’t survive succession) but to successfully expand the company’s offering from a shrink-wrapped software company (Business Plan Pro) to a booming SaaS corporation, hosting business planning, pitching, and financial management in the cloud (for more than 60,000 small and mid-sized businesses and counting) via LivePlan (www.liveplan.com).
Sabrina is a graduate of Princeton University and president of the Princeton Entrepreneurs Network. She is also a mother of 3 young boys; involved in multiple business planning competitions; blogs for Forbes Women; and is a passionate advocate for evolving the workplace for today’s modern parents, including instituting and personally taking advantage of Palo Alto Software’s baby-friendly office policy.

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Guest Post: Three Company Entities Explained

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The type of business entity that you choose can impact the taxes you are liable to pay and also your legal protection. This makes it especially important to ensure that the entity you choose is right for your business.

Here we give a balanced snapshot summary of three of the key business entities – Limited Liability Company, sole proprietorship and general partnerships – to help you consider which could be most suitable for your business needs.

Sole Proprietorship

Sole proprietorship is often described as the simplest way to set up a business – especially for an entrepreneur. Each asset of the business is solely owned by the proprietor and the business is looked at as an extension of the owner. You may choose to have other people working for you but all profits made (subject to tax deductions) are your own.

This type of entity also tends to be more straightforward to set up as you may not be required to pay some of the registration fees that you would with a limited liability company. You also have freedom with all decisions made regarding the finances of your business and you can choose how to raise funds; whether to take out external loans or use your own assets.

However as well as the profits, you will also be liable for any debts and losses incurred by the sole proprietorship. If the business should run into financial difficulty, that responsibility will fall on your shoulders. This is an obvious risk for those with bank loans – should your business fail, you will be personally required to repay them.

Partnerships

The set-up of a general partnership is similar to that of a sole proprietorship but run with two or more owners, each of whom has individual liability for all the business’ debt. Should one partner walk out; it may be down to the other partner to meet the rest of the costs.

Limited liability partnerships limit the responsibility that each partner has to the amount that they have invested in the business, offering a degree of protection because unlike general partnerships the individuals designated as partners will not hold personal liability for certain partnership liabilities. However to become a limited liability partnership, you will need to register with your Secretary of State’s office and follow the relevant regulations.

Limited Liability Company

Setting up a limited liability company follows a different procedure. Owners take on a separate legal identity, offering a degree of protection to their personal assets and finances. A limited liability company must be registered with your Secretary of State office and documents must be prepared and submitted in line with their regulations. A tax will be charged on profits made by the company.

There are a number of regulations surrounding limited companies such as shareholder requirements and minimum trading amounts which mean that it may not be the right option for everyone.

Choosing the right entity for your business needs

In order to work out the best option for your business, you need to consider the tax, administrative and financial requirements of the business and which entity will suit these most closely.

It also depends on the nature of your business, if you are looking to work alone, for example by offering work as a consultant, then a limited liability company could be unnecessary and a sole proprietorship entity may meet your needs instead. But if you are looking to grow your business, a limited liability company may be your best bet.

John T. Hughes writes for Juniper Accountancy, a Bristol accounting firm. As chartered Bristol accountants we can provide your business with a complete end to end service to take care of all your accounting and tax needs.

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Get Pre-Qualified for Fall Financing with Guidant!

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If you’re looking to start a business this fall, it’s time to start thinking about funding. And what better place than to look at funding with our partners at Guidant Financial?

At Guidant Financial, we can pre-qualify you free of charge in just minutes—all you have to do is complete a brief online form.

Once we’ve received your form, we’ll tabulate your Rapid Results on the spot and you’ll see what types of funding methods you may be eligible to use, such as SBA loans, 401(k) rollovers, unsecured credit and more. It’s that easy!

Not sure about your credit profile? Watch this brief webinar, Avoiding Common Credit Mistakes, for fast tips about how to keep yours in good shape.

To speak with a Guidant expert, call 888.472.4455 or visit guidantfinancial.com.

David Nilssen is the CEO & Co-Founder of Guidant Financial. Read more tips about becoming a successful entrepreneur in his book, Making the Jump into Small Business Ownership. Follow him on Twitter at @davidnilssen

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Kickstarting a Weird and Wonky World

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Kickstarter has quite a bit to celebrate. It has now seen three projects that have sought funding through its site break the million dollar mark, and is posed to surpass the NEA in total money distributed to approved projects for 2012. Kickstarter’s business model is nothing new – micro investment has been used for years, primarily in developing economies to help start small businesses. But the sheer size of Kickstarter’s user base means that all sorts of project are able to find an amazing level of support. The most recent million dollar project, for example, started as an effort to publish a webcomic’s archives in a physical format.

But Kickstarter’s hands-off approach to funding has meant that some slightly odder projects have found investors for products or ideas that, typically, few would be willing to touch. These range from your run of the mill oddity, more suitable in a sky mall catalog than a booming investment site, to the philosophically obtuse. In honor of Kickstarter’s third million-dollar project, we present three slightly more off-kilter products that have found success through Kickstarter.

Stackable Soap

Many of us face this problem every time we step into the shower. Piled up in a small corner are little shards of soap, tossed aside due to a blatant unwillingness to use a bar of soap once it gets to a certain size. Some have the tenacity and sheer willpower to throw away these little soapy lumps, but for the rest of us just think about how trashing an otherwise perfectly good bit of soap brings back memories of our mothers yelling at us about the starving children in Africa and how happy they would be to have the product/food/material we want to put in the garbage.

In an attempt to quell the guilt stirring in us, the creators of stackable soap designed a way to meld old, used pieces of soap with a larger, new block. Essentially it’s soap with a chunk cut out of it, but the idea is that we will put our old soap where that gash has been made and meld the old and new together.

Now the question remains of how economical this process will all be. At a certain point I just throw away the leftover soap or press all the old slivers together as hard as I can to make a new bar, and for some reason I think that I’d rather save money doing that than buy special soap. However, this project did earn over $14,000 so there are obviously people who are willing to pay for convenience.

The +Pool

This has been one of the grander projects to come through Kickstarter, and while it seems to have run out of steam investment wise it is still and interesting premise. The basic idea is that the creators of this project will drop a pool with huge filters in its walls into the Hudson River. The filters will let in a stream of clean water, sourced from the river, so that the community can swim in water that isn’t full of sewage and medical waste.

The first $25,000 will go to testing out the filtration system with the ultimate goal being building a full-scale mockup of the pool to show New York City that dreams can come true.

A lofty goal, but an interesting premise. The whole idea has also attracted quite a bit of attention, especially from green initiatives who love the idea of using water from the river instead of treated tap water to fill the pool. The feasibility of the project remains to be seen, but if nothing else it is an amazing effort.

The Present… philosophically speaking.

Yeah… I’m not too sure what I can say about this one. It is a clock, tuned to the seasons, to remind you to remain in the present. Because it’s hard being in the moment for more than a few seconds.

Apparently.

The entire project sounds like it was cooked up by a college freshman taking their first philosophy course in an attempt to totally blow the mind of the evil TA who keeps failing them, but it has raised money. A lot of money. Over $90,000 of it.

To sweeten the pot, donate more than twenty-four dollars and you get a piece of black plastic labelled ‘something’. Because we all need something to change our lives.

Or something. I really have no idea – the entire premise seems very tongue in cheek, but I am willing to bet this little season clock will be proudly displayed in lofts all across San Francisco, Brooklyn and Chicago in an ill-fated attempt to make the owner seem more interesting than they actually are.

But if there is one thing all of these show, it is the sheer unpredictability of the consumer. I don’t think I’d ever have thought people would pay into any projects like these, but maybe that’s why I’m writing a blog post instead of designing a $100,000 clock.

After all, if an idea is stupid but makes money, it isn’t stupid anymore.

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What Are Corporate Good Standing Certificates?

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This week, our old friends and affiliates at fastARfunding return to discuss one of the most vital documents a limited liability company or corporation need, a corporate good standing certificate. These documents are vital for establishing invoice factoring facilities and much more, find out the benefits they offer below!

One of the most basic underwriting criteria for any factoring company will be the regular checking of your business’ certificate of good standing.  So, during the diligence and underwriting process, don’t be surprised or alarmed if the factoring firm requests copies of the state-issued document.  Note that the factoring firm is just filling a necessary due diligence step in their ongoing relationship management process and the information goes into one of their internal files.  The file folder could be labeled what have you done for me lately because the factoring firm may request this information at regular intervals to ensure certain things about your company.

I’m a firm believer that there are no “stupid questions”, so let me explain some basics regarding why a corporate good standing certificate document is important.  A certificate of good standing is a document issued by a state within the US that demonstrates that a limited liability company or corporation exists, is authorized to do business, and has complied with all the formalities within that particular state.  This type of document is critical for finance companies to have before advancing funds to you.  As important as a driver’s license is with regard to the ability to drive legally, a certificate of good standing is often required when a company wishes to enter into specific contracts or relationships.  A finance company contemplating advancing funds to you will be entering into exactly that type of contract, so all parties want to be sure they are legally allowed to be doing business together.

So, what’s in one of these state-issued documents anyway?

Typically, the document will:

1) Include your company’s name

2) Say that your company is incorporated and authorized to do business in the state

3) Ensure all fees, taxes and/or any applicable penalties owed the state have been paid

4) The company’s most recent annual report has been filed, and

5) That articles of dissolution have not been filed.

Note that if your company is not in good standing with the state in which it is incorporated, the state will often deliver a document that shows the corporate existence, but could also include a “bad standing” statement, which likely will negatively affect the reputation of the business and/or limit your ability to “transact” in the intended deal.

Having regular updates of a certificate of good standing is important for finance companies like FastA/R Funding who are continually entering into contracts to purchase your accounts receivable and advance cash to you.  Therefore, making sure a company has its state-issued good standing certificate would be considered one of the “basics” in dealing with a factoring company.

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