Monthly Archives: August 2016

How to Raise Capital for Your Startup Business?

Starters usually give up the equity shares to generate the startup capital. But if you want a quick move then it’s better to avoid traditional equity-based funding models.

Lets’ have a look at some of good alternative options that can support your fundraising capitals.

Friends and Family

No, we’re not asking you to run a business with your family or friends. But what’s wrong in borrowing some money?

For the startups who really can’t afford bank loans, asking your close buddies and family to make few investments seems a lucrative option.

Moreover, the support of friends and family is a valuable asset as they will not just invest their money in your startup business but also give you some guidelines to handle risks. So, they are like your strongest back support that will not leave you even during the adverse times.

Group of Indian people holding banners with $ symbols.

But you need to be a little cautious because generally people tend to control a part of your business if they make some investments. So, make sure you don’t mix money and relationships.

SBA Loans

The Small Business Administration (SBA) is a government entity that gives financial support to small businesses in the US in the form of loans and grants. The good thing is you can loan from them without diluting your shares and they offer mentorship programs.

Since this is a government based funding option, therefore you may have to fulfill their specific requirements.

sba-loan

Time is the biggest consideration while considering a loan from SBA. Sometimes it can also take up to six months for loan approval; therefore you should start with the procedure beforehand.

Bootstrapping

Another option to raise capital for your business is by bootstrapping. This is for the ones who are not able to convince investors or generate revenue from other options.

Since you cannot always wait for the perfect funding option therefore bootstrapping your business is the perfect idea.

Bootstrapping

One good thing about bootstrapping is you don’t have to impress the investors about the company’s growth levels.

Grants

This option is ignored by most of the people. Government and private sector grants are one of the best options to raise capital for your startup business. They don’t require any equity to obtain and you don’t even need to pay them back.

You just need to find the right funding option for your business, beyond that you just have to fulfill the requirements of the application. Private sector grants may seem easy to find but it’s difficult to get approved.

Government grants are available are not available throughout the year and they also have a long application process. So, you need to start on time.

5 Things Every Startup Needs to Succeed

Having business ideas hitting your brain but confused on the right strategy for a powerful start? Indeed it’s difficult to start a business but if you are really determined to make it a success then nothing can stop you.

The following guidelines are for all the startups on the things they must ponder upon to make their start-up business a big success.

Despite a great idea and plenty of funding many businesses fail to reach to the zenith. This is because they lack some major strategy points to make their business models work accurately.

But that is not the end of the tale. There is always a turning point; you just need with a bit of awareness. For example, even if you have the right business plan but you are not keeping watch over the changing market trends, then you will definitely be lacking behind.

Following are some points that will help the startups to make their business a big success.

Expert Business Plan

This is the first and the crucial step for a startup business. Since money is the sole reason behind every business, therefore a business plan should be oriented on how to maximize profits.

An expert plan should focus on the long term goals of the business but also not ignore the short term goals.

Effective Business Plan

A good business plan should have the following:

  • A business plan should be goal-oriented and realistic in application. Tasks, deadlines, budgets are an important part of every business plan.
  • It should be designed according to the need of the business. Some of the businesses require huge investments and others demand a good team. So, a perfect business should be made in a way that it satisfies the needs of the business goals.
  • A good business plan should include the roles and responsibilities of who are going to implement and work upon it and should be well-communicated with the team.

Market Analysis

To turn your little idea into a great success, market analysis is an important factor to consider. This is important not only for a startup but for an existing business as well.

Market_analysis

Experts recommend that market analysis should be done at least once in a year. Every business must know how the market trends are changing, and accordingly make plans to make them a part of their business. For example, the market for downloadable e-books isn’t restricted only to its users but it targets everyone who is connected to the web in one way or the other.

The main characteristics of a good market analysis are:

  • Market analysis depends largely upon the information source which you are using to collect the data. For local information of an area you need specific websites and for searching the statistics you need to look for government websites. Sometimes you may even have to go beyond the track to find the information about market analysis like consulting telephone directories, catalogs, industry association statistical compilations, real estate information and density maps.
  • You should quantify the targeted group for a proper market analysis. If you are targeting local homeowners, then you should be able to keep a track of their numbers.
  • Another factor while doing an extensive market research is the market growth. You should know whether your targeted home owners are growing or declining every year.
  • Market analysis should also include knowing the changing market trends. If you sell computers, then are the prices rising or falling? Or are there any discount seasons in the market to attract customers?

Competition Watch

After you analyze the market and the changing trends, you also need to know the competition that you are facing due to other companies in the market. Keeping the competition on your mind will not only encourage you to work for your goals but will also show you a real picture of where you actually stand.

Competitor_watch

  • Don’t ignore the competition, but find out where your competitors are ahead of you.
  • This also leaves a positive sign over your investors that you don’t have unrealistic goals and are practically working for the success of your business.

Business Growth Analysis

The basic aim of Business growth analysis is to foresee your growth patterns. If you are an existing business then you need to consider the needs of the business that are to be worked upon for its growth.

Growth_analysis

  • Business growth depends upon the product that the company offers, marketing techniques and the competition analysis. All these factors can clearly lead to growth of your business if taken care of properly.
  • Business growth analysis also involves studying the changing consumer trends in accordance with the various products and services offered by your business. This is aimed at studying various distinctive groups which are being targeted.

Investment Options

For starting a business you need to invest in both financial and personal terms. By starting a business you are not just forming ways for capital growth but also creating jobs in the market. So, you need to decide very intelligently about your investment options which can give you positive fruits.

Investment_options

  • To lessen the risk, you should choose a domain you are familiar with to invest in. This will help to project your business in a positive way for any future venture.
  • You can also look for multiple options for investments instead of sticking to a single one only.

What’s the Right Business Plan for You?

Business Plans doesn’t fit under the “one-size-fits-all” category. Gone are the days of writing 50-100 page documentation. Business Plans guide owners, stockholders and managers through the stages of development. A business plan is a road map that guides you through the planning process. As such, it becomes important to consider that for what exactly you’ll be using the plan for.

The current stage of your business can help you determine what type of business plan would work best for you. Ask your business plan writer to determine and prepare a plan accordingly.

Start-up Plan

This business plan is for those who are just newbies. It can be considered as a comprehensive, traditional business plan that covers all topics relevant to new scheme creation, such as company information, markets, forecasts, strategy, management team and financial analysis. It requires segments describing the company, its product or service, market assessments and the projected management team.

Startup business plan

Internal Plan

This type of plan is used internally and not for external associates. As such, you need to indulge the management team and detailed company analysis. However, you should cover where the company intends to go and how, without giving all the background details and company overview.

Operational Plan

Operational Plan is considered as an internal plan that consists of information related to company’s internal operation. It should include milestones, deadlines and responsibilities of managers or teams.

Strategic Plan

A strategic plan emphasizes high-level opportunities and setting priorities for the organization, rather than particular responsibilities of the team. These plans are in- depth description of the company’s proposed growth.

Growth/expansion Plan

This type of plan may focus on a subset of the business. This plan should include comprehensive forecasts of sales and expenses for the new ventures.

Feasibility Plan

When considering a new start-up, this type of plan is used to evaluate the idea. It also helps determine whether it’s worth pursuing. The plan should include a summary, missions, elements of success, overview of market analysis and an analysis of pricing, and probable expenses.

So, which one among these is your business type?

Reach the Sky with an Effective Business Plan

When one of my friends was asked about the business plans for his new company, he replied, “I don’t have any.” He started several companies in his 20-year period as a businessman and none of them have ever succeeded for long, although he is a millionaire today.

Does this mean that he is a poor businessman? Essentially not!

This means that my poor friend didn’t ever realize the purpose and the worth in creating a business plan, which is often the case with many new entrepreneurs.

So, what exactly is this Business Plan and what makes it so important for every business owner?

Here is all what you must know about an effective business plan.

Business Plan – An Introduction

A business plan is your formal ‘calculation’ of the way you want and will run your business. It is a formal declaration of your business objectives, reasons they are achievable, and plans for accomplishing them. It may sometimes also include background information such as the organization or team endeavoring to reach those goals.

Business Plans serve as a framework for your business and provide standards to check whether you’re reaching your goals. They are a key to help you think through your business and keep you on track.

Business Plan

Business Plan – Its Length

Greg Nelson of SCORE Naples says, “A business plan needs to be long enough to address all the key areas so that the reader is not left with serious questions, concerns and red flag.” He further says that business should be able to present sufficient business plan in less than 20 pages.

However, simple businesses can probably complete their task in 8-10 pages. In cases of complicated market research, one can place much of the supporting information in appendices, which can make the principal plan shorter, more concise, to the point and more effective.

However, according to the book Portable MBA in Finance and Accounting, p. 261-2, “For a business plan to raise debt or equity, 25-40 pages, and “less is more.”

However, some experts believe that a business plan should be measured by its readability and description.

Business Plan – Who need it?

You need a business plan if –
• You are running a business
• You are applying for a business loan
• You are looking for a business investment
• You are looking for business partnerships
• You want to communicate with your management team

In short, everyone who is associated with a business must have an effective business plan.