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Enterprise Turn to the Right with the Help of Angel Investors

Enterprise

You have a business enterprise, but it’s just not taking off the way that you planned, or business has slowed down significantly after a stellar few years. Along the way though, you have been able to learn much more about what the market demands and can amend your approach with great success with the right funding. Sometimes it’s necessary to reinvent your business to fit the marketplace and take advantage of what you have learned to date through missteps or experience. It’s a sharp turn to the right that can help a business take off again and angel investors can help you turn the wheel with angel funding.

Sometimes entrepreneurs have a good idea that needs tweaking, but they don’t know it needs adjusting until they enter the marketplace. In the age of technology, customer needs can change rapidly, and you must be able to accommodate those needs through innovation. Business based on excellent ideas aren’t always successful after a period of time simply because they need a new look, a new approach, a refined marketing plan or an adaptation.

All too often businesses are driven into the ground because owners refuse to acknowledge that the economy has shifted or that their market niche has changed expectations. It’s a case of stubbornness in many circumstances because it’s tough to consider changing a brand that has time, money and effort behind it. However, your brand won’t do you much good if your company dies a slow death because you failed to listen to what the market is telling you.

Turning Towards Success

Reinventing your business with the help of angel investors can change a struggling business into an adaptable one that is always one step ahead of customers. Angel investors don’t just fund brand new businesses. They also fund existing businesses ready to change course to take advantage of a changing economy or a changing marketplace. Companies reinvent themselves every day with enormous success and many are companies well recognized – Apple computers, HP, GE and others. However, you don’t have to be a major corporation to understand that market adaptability is one of the most important keys to success.

Unfortunately, there are thousands of entrepreneurs who refuse to admit they need to pivot in place and head in a new direction. The advantages of adapting is overshadowed by the fear of failing, so the business is allowed to die a slow death while reinvention ideas are left languishing in the dark. It’s not for lack of funding either. Angel investors are investors willing to accept risk for financial gain and are looking for companies that have a new idea and a new way to penetrate a changing economy. Angel investors, like venture capitalists and equity partners, embrace innovation, new approaches and new ideas.

Reinvention can take many forms.

  • Technological changes in products or processes
  • Response to competition in the form of new products or services
  • Upscale reinvention of brand
  • Change or expansion in products or services in response to changing customer base
  • Expansion in the definition of the niche market

Angel investors are more than willing to invest in companies that are ready to take a new path. In fact, you have a lot to offer angel investors right from the start because you have a business track record. The fact you are currently in business is a major benefit and selling point and often enough to get an investor’s attention sooner rather than later.

Pivoting on Core Competences

If you have a desire and need to take a sharp turn to the right in your business, the first step is developing a business plan around your core competencies. Those core competencies are the strengths of your business around which you will pivot your plans for new products or services, increased market penetration or business expansion based on a reinvention platform.  Clearly explain your new idea, track record, the problem you will solve or the market you will serve, the benefits offered to the marketplace, the revenue opportunities and how reinvention strengthens and rather than weakens your enterprise, and angel investors will have plenty of good reasons to join your efforts.

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Loans Versus Investors

Loans

Loans can provide a sometimes easier avenue for a startup or existing business through SBA lenders or an existing business revenue model. You will need good credit in most cases and show cash reserves. In some cases, most lenders will have the partners sign the loan note and require a personal guarantee. The good side is that you keep 100% of the business and have more flexibility in reporting. However, the terms can come due in 10 years on SBA, and ongoing payments can put an initial burden on a startup. Lots of companies can boot-strap some personal debt to start a business. It would be helpful to set aside a year of payments in the bank so the payments will always be made on time and have one year of developing revenue.

Investors can be one of the best ways to raise capital for a startup or existing business. It can provide initial capital and less liability for the raised funds that lenders most likely require personal guarantees and some collateral. Investors can also provide pivotal guidance and experience to your business by offering advice and even distribution chains and connections you usually would not have. This can also bolster your business to a new level. The takeaway is that Investors can be instrumental in the odds of success of your business. However, it can also be challenging to prepare for a pitch and finding the correct type of interested investors can be a drawback. Investors will also return a percentage of your company and expect the business to grow. In addition, they usually get paid through some exit strategy in multiples of their original investment.

Suppose you want to determine the effectiveness of Loans versus Investors. Prepare a business plan using both models, however, If you don’t have good credit or some capital reserves, the banks sometimes like to see the emphasis in your business plan a few pages for investors to return and pitch content geared for investors. On the other hand, if you have good credit and some working capital, a loan might be good if you don’t mind the risk of debt to fund your idea or business.

Some startups can use a variety of ways, including some credit cards to finance some inventory or other expenses and wait for offers of balance transfers of 2-3% fee but no interest for one year. The final thought is that both are equally effective for startup businesses under $150K. Investors may be the best option for you if you are in the $1MM plus and do not have real estate to collateralize.

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Loans Or Investors: Which Is The Way To Go?

Getting funding for your business is the top priority to getting it going. As you consider your options to procure funding, heading to the bank for a small business loan may seem like an easy solution. While banks can be helpful in their attempts to provide funding for a small business to start or even to grow, it may be remiss in providing the same level of benefits that you can receive from an angel investment.

The Business Of Banking

With a small business loan, sure you may be able to start your business quickly, but you will be missing out on the valuable advice, guidance, and experience that a private investor offers. A bank loan is cut and dry. You are on the hook to pay back the loan, plus interest, without any support backing you.

A bank has no involvement in your day-to-day operations. Their main concern is timely payments, so there is no sounding board for your ideas or help to make those big decisions that affect your operations. You are on your own without anyone to lean on when times get tough.

The Advice Of An Investor

An angel investor offers you more. For starters, they will direct their current customer base directly to your business startup, giving you an instant boost in revenue just through your partnership with them. In addition, you’ll gain the expertise of your seed investor as they offer words of wisdom and can help direct you on making those hard decisions that every business owner faces.

Your angel investor has a vested interest in seeing your business startup succeed and will do what it takes to help guide the operations in a positive way. Together as partners, you and your private investor will be able to find solutions, implement new ideas, and find ways to continually increase your customer base as well as your revenue.

Why go it alone when an angel investor can give help your business get the successful start it needs. Banks may seem like a doable option, and for some they are, but the added benefits that come from joining forces with an investor can be more beneficial to make sure your business startup is a resounding success.

More detailed information and useful advice can be found at Funded.com. If you need to access our network of angel investors or a business plan for start-up funding visit  Funded.com

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4 Reasons Why Your Angel Investor Says, “NO” To Your Business Startup

It’s no secret that angel investors prefer a sure thing when it comes investing in a business startup. But, that doesn’t always mean they won’t take risks when it comes to funding a business that shows great promise. If you your business startup has all the makings of a successful operation, but you keep striking out when it comes to getting the nod from a seed investor you need to consider the reasons they keep saying “no” to you.

Here are four reasons why an angel funder may be hesitant to fund your business startup. 

You Need A Business Plan That Works

 It is imperative to have a business plan in place when you seek out funding from a private investor. An undetailed business plan can raise eyebrows and have seed investors cooling off to your ideas. Take the time to develop your business plan, marketing plan, and short- and long-term goals for the business before you approach an angel investor for business funding as they will be more receptive to your proposal and help you avoid that resounding “no” for no good reason.

It Needs To Be The Right Time And Place

They say that timing is everything in business. It may be true of your angel investor as well. While you may have a stellar idea, sales coming in already, and a strong business plan to back you up, if your investor isn’t ready to make the leap, the chances of you getting funding may soon walk out the door. Don’t take these rejections personally. Realize that when the time comes, and an angel investor is ready, you’ll reap the rewards of waiting until the time was right.

They Don’t Understand The Market

Some markets require a steep learning curve to understand and recognize who the competition is. Your private investor may not be able to grasp who your target customer is and what your business brings that is new. Finding an investor that sees your vision is imperative as you look to propel your business forward. You want an investor that backs you and without a clear understanding of the market, you may face rejection from an angel investor that wasn’t right, to begin with.

They Are Just Not The Right Investor

Sometimes hearing a “no” from a business investor is a blessing in disguise. They may not have complimented your business in the way that you needed them to or they may not have given you the support you needed to soldier on. Finding the right angel partner can help your business to thrive, but waiting for them to come along can be a challenge. With a little patience, you won’t be disappointed.

 

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4 Ways An Angel Investor Can Benefit Your Startup

If your startup business needs a boost to propel it forward and into the market, an angel investor may be able to give you the financial help you need to make your dream a reality. While it will take effort, a great pitch, and a stellar business plan to garner their attention, once you do, you have much to gain from their knowledge and experience besides just financial capital for your company.

Consider your angel investor the sounding board for the big decisions you have to make. They will help you keep your business on a path to success and give you the confidence as well as accountability every step of the way. Your startup business could benefit in a big way from an angel investor as you’ll find they have much to offer in relation to running a solid business.

Advice and Guidance

Angel investors are a wealth of knowledge and can provide that guidance you need to steer your startup business in the right direction. While their business funding may allow you to open your doors, their continual advice will help you maintain your operations for the long haul. They most likely have assisted others in their business ventures and can help you avoid mistakes that might be costly to yours.

Networking Connections

Having a partnership with an angel investor immediately gives you access to a flurry of network connections that can help you accelerate your business. They know other investors as well as individuals that may be interested in joining forces to help get your business off the ground, giving you the opportunity to advance in the market.

Marketplace Awareness

Along with their industry network, you’ll also be able to take advantage of your angel investor’s expertise when it comes to knowing the market. They most likely will have intimate knowledge about your competitors and what trends are making waves this season. They can allow you an inside look at how your startup business can reap the rewards of similar strategies and gain you valuable market share in the process.

Creditability

Attaching your startup business to an angel investor can work wonders for your reputation. It can add instant creditability and make others stop and take notice. Angel investors are well known in their community, and you will be too as you attach your business to their name.

Working with an angel investor can allow your startup business to flourish beyond just business funding with them. You’ll have access to them, their contacts, and their generousity, making you a little wiser about the market and how you can succeed in it.

 

More detailed information and useful advice can be found at Funded.com. If you need to access our network of angel investors or a business plan for start-up funding visit  Funded.com

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A Business Plan Starts with a Mission to Succeed

Business plans are intended to be flexible plans for succeeding, not just surviving, as a company. Yet, according to a famous Harvard professor John Kotter, 70 percent of business initiatives intended to bring organizational change will fail. That is a remarkable figure because it means efforts to adapt to a changing marketplace is failing. There is a barrier between the business plan founded on a mission and the real world.

The setbacks are sometimes one of losing sight of the company mission and weakening to plan. The purpose of the mission statement clearly states what your organization seeks to accomplish, It has a philosophy underlying it that does not change. The mission statement is a reflection of the nature of products or services sold, potential for growth, pricing strategy, customer service, and role in the community, competition and others.

The business plan needs to be developed so that each and every segment drives the business towards fulfillment of the mission. A change of proposal is merely a strategy for keeping the business on track to fulfill the mission. Leading change requires first turning to the mission statement and the business plan. A business that needs to change must be able to write a sense of urgency all through the organization because staying true to the mission statement is needed to succeed. If a change idea is needed, it means the business has gotten off course from its mission and its vision.

The business plan goals and strategies may need to be revised, but that should always be a step in the change process. In fact, business plans can serve as the direction for change as each section, from the Executive Summary to the Financial Statements, are reviewed in light of the need for change. Leadership will identify specific strategies for incorporating change and then communicate the revisions on an organization-wide basis. The change process must be empowering and encompassing, meaning employees at all levels should be embraced as change agents.

Business plans begin with a mission statement and then serve as a living breathing document. Leading organizational change is not always easy, but it can be impossible unless there is buy-in to the mission and the business plan. The strategies used to get that buy-in can vary, but staying on message cannot.

More detailed information and useful advice can be found at Funded.com. it offers expertise and assistance with developing and funding your concept. If you need to access a network of angel investors or business plans for start-up funding visit  Funded.com

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Mistakes That an Entrepreneur Must Avoid When Pitching to Investors

Very few entrepreneurs are given a chance to pitch their businesses to investors. Unfortunately, not everyone who gets a chance to talk with potential source of financial support receives positive response. The reason: they often commit mistakes when pitching their business startups.

Here are some of the most common mistakes that business owners do when pitching their companies to potential investors.

Long elevator pitches

Elevator pitches are called as such because they are expected to be short – around a minute, which is the average length of a person’s ride in an elevator. And despite being called the “elevator pitch,” there are other instances when business owners are required to be brief when introducing their companies to possible investors. These include chance meetings in cocktail parties, meetings, or even introductions between common friends.

Such cases, which often happen in informal settings, are not boardroom meetings. And while investors may be interested in the pitch, talking about it for more than a minute or two is not appropriate. Doing so may put a bad impression on the part of the investor, therefore losing a possible deal.

Business owners must keep in mind that they should save the talk during an actual pitch.

Long presentations

During the actual presentation of the business, PowerPoint presentations are often considered as God-send tools. It provides the people around the room some visual information that could pique their interest on the topic being presented.

However, business owners must keep in mind that PowerPoint presentations are used as support and are not meant to be the star of the show. Therefore, entrepreneurs must be able to limit the length of the PowerPoint presentation so as not to bore potential investors.

These people want business owners to talk about their business startups and not just read from a prepared presentation.

Made-up proposals

Business owners want to impress potential investors. However, putting wrong information on the investment proposal, for instance blowing up the exit figures to impossible proportions, often raise eyebrows of investors.

Entrepreneurs must remember that investors value business owners who present them with the reality more than those who make-up information just to impress them.

Early discussion on valuation

Investors often turn their backs on business owners who start they pitches with valuation. Before doing so, business owners are expected to introduce first the business and its operations. Investors are there to provide money, but they would rather hear about the business first before getting information on the valuation which is, technically, their expertise. There is no need to walk them through on this process.

These are just some of the things that business owners must avoid when pitching their businesses to their potential investors. Following this would make them one step closer to getting some financial support.

More detailed information and useful advice can be found at Funded.com. it offers expertise and assistance with developing and funding your concept. If you need to access a network of angel investors or business plans for start-up funding visit  Funded.com

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How Do You Know Your Business Idea is Good?

Investors want to fund good business ideas. That’s a broad statement because what seems like a good idea to me may be different from what seems like a good idea to you. So many ideas never seem to go anywhere. Some are just so uninspiring that they can’t seem to get the attention of anyone, much less investors. You can even write a whole business plan around a bad idea, leading to great disappointment when investors spot the fact it’s bad.

A good business idea is much more than just an idea. You can sit there all day and come up with ideas, but that doesn’t make them good. Good business ideas have certain qualities that differentiate them from other ideas. For one thing, a good business idea fulfills an unmet customer need, and it is often a need the consumer doesn’t even recognize yet. That may sound odd, but great ideas are often not great until someone invents a product or service.

Determining if a business idea is a good one requires more than just knowing the market will appreciate products or services. The idea must be feasible and realistic in terms of production costs, the time from funding to sales, profitability and safety. A good business idea is also one that can be brought to fruition because the entrepreneurs have the knowledge and skills needed.

There are more qualities associated with good business ideas, but one of the most important is related to innovation. Good business ideas offer a new twist on products or represent creative and innovative new products. The new twist or innovation should represent something that matters to people which means it brings some kind of satisfaction.

There are no hard and fast rules or magic formula to define a good business idea. Instead, investors will consider all of the qualities of the idea coupled with the marketing, competitive and financial factors.

More detailed information and useful advice can be found at Funded.com. it offers expertise and assistance with developing and funding your concept. If you need to access a network of angel investors or business plans for start-up funding visit  Funded.com

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Funding Business Expansion through ‘Private Equity Financing’

Expansions are believed to be the best indicator that businesses are doing good. Unfortunately, while every entrepreneur seems to be of the opinion that bigger businesses are always better, the act of expanding a company is easier said than done.

It is easy to determine if a business is ready for expansion. In fact, there is only one major indicator: there is a bigger demand for the product or the service that the company offers. However, having a bigger demand does not necessarily mean that the business owner can easily whip out a plan on how he will expand his or her business – there is a bit of a problem called money.

A business owner would be lucky if he or she has some savings that can be tapped for a business expansion. This is not generally the case. And while there are a lot of options when it comes to financing a business expansion – angel investors, bank loans and support from venture capitalists – there is one option that has started to get attention of business owners over the years: public equity financing.

As the name implies, private equity financing means that an investor would be invited to put his or her money in a business in exchange for a partial ownership of the company.

This in itself would make a lot of entrepreneurs turn around and look for other ways to finance their business. A lot, of course, would not want to hand over the reins of the company that they built to another person in exchange of financing a business expansion.

But looking at it clearly, public equity financing is not as bad as it sounds. For one, agreements between the parties will still have to be forged – meaning one does not necessarily have to hand over the control of the business to the investor as the original owner have an option to retain the majority of the company, thereby putting him or her in direct control of the operations.

One has to keep in mind that investors, at least most of them, are merely concerned with the profits of their investments and would not want to be bothered by the rigors of administrating a business. Moreover, by being technically a part-owner of the company, the original owner will have an assurance that the investor is putting a great deal of interest in the business that also carries his or her name.

This is why public equity financing works both ways in expansions: investors get their bigger profits, while original owner gets to expand his or her business.

Looking for partners

The challenge in public equity financing, like in other forms of investor-related concerns, is for the business owner to find and convince one to be an equity partner in his company.

Finding will not really be a problem, as there are always those who have some extra funds that they intend to invest in a business eyeing expansion. The major concern is to be able to convince them.

In convincing potential equity partners, business owners must keep in mind that they have to convince the former that they will earn profits from their investments. This can be achieved by presenting relevant information as to the operations of the business.

This may include, among others: discussions on the competencies of the current management to handle the expansion, the risk exposure of the equity partners, the business plan and objectives, the financial history and performance of the business.

The entrepreneur should also be ready in negotiating with the terms of the deal, including, as stated earlier, the level of control – or the lack of it – that the equity partner would have once the agreement is in place.

Finally, entrepreneurs must be able to list down his or her reasons for the decision to expand and, more importantly, to utilize public equity financing as a means for the business expansion.

Like what had been repeatedly said, capital for business startups and expansions will never run out – one just has to know what he or she is looking for and, more importantly, where to look for it.

More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com

 

 

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Top 5 Most Profitable Industries

Top 5 Most Profitable Industries

The capability of entrepreneurs to effectively and efficiently manage their own businesses is among the requirements to succeed in this field. However, there are other factors that contribute to the actual results of a venture.

One of these, apparently, is the general performance of the sector in which the entrepreneurs establish their businesses. According to a new report, healthcare and the real estate sectors remain the most profitable sectors, comprising almost half of the list.

Despite this, what topped the list is something that is not surprising as deals with money – accounting and other related services. These are some of the most profitable sectors are as follows:

Accounting and related services

There is no denying that proving accounting and related services, such as bookkeeping and payroll services, top the list of most profitable industries at the moment. According to latest reports, the sector has a net profit margin of 19.8 percent – primarily due to high demand and low equipment overhead and equipment costs.

Legal service

Next to accounting, which is also not a surprise, is legal services. With the rise of legal issues arising both between individuals and companies, there is nothing new with reports that among the sectors that reap a big margin is the field legal service. The only surprise, perhaps, is that it did not top the list this year contrary to the last.

Oil extraction; Machinery rental

Tied on the third place are sectors concerned with oil extraction and the leasing/rental of industrial and commercial machinery equipment.

The high ranking of these two is primarily on the current policy that focuses on increased production of crude oil and the rising number of constructions and industrial development in the country in recent years.

Dental services

The fifth on the list, dental services, is quite a surprise. Who would have thought that a specialized sector would be able to compete with, for instance, industries dealing with oil extraction? On another thought, however, the number of people requiring tooth extraction – not to mention other related dental services – will remain a demand so long as the humanity survives.

Real estate leasing; Brokers; Medical service

Tied on the sixth to eighth places are the real estate leasing, real estate brokerage, and the medical profession.

According to latest reports, the improvement of the economy has resulted in the better performance of the housing market, thus the good profit margin of real estate brokers. Moreover, however, this has also pushed the profits of those engaged in rental services, the prices of which have shot up in recent months.

Meanwhile, doctors, as expected, are in the list – primarily due to the increasing population, and partly due to the issues on health and lifestyle that is affecting the new generation.

Other health practitioners; Management companies

Tied for the ninth and tenth spots are other health practitioners and management companies.

Dentists and doctors are not the only ones reaping the increase in profit margin in the past months. Expected to join them are other health practitioners, who are very much needed just like the doctors and dentists in this part of the world.

With the growing trend of businesses outsourcing management strategies to experts, those who have management backgrounds have jumped at the bandwagon and established their own companies that provide the current demand – for a profit, of course.

These ten industries are just some of the most profitable sectors that those who consider establishing businesses – or even just applying for a job – should think about. Runner-up include outpatient care services, schools, real-estate related activities, death care services, and mining support.

 

More detailed information and useful advice can be found at Funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.Funded.com
Copyright 2014 Funded.com LLC