investors Archives - Page 6 of 9

12/03/201206/28/2017

Educate Your Investors: Effective Ways to Secure Business Funding

Securing the nod of potential investors such as angel investors or venture capitalists is not an easy job. Most of the time, they have the money but they are not familiar with the industry that your working for. Prior to pitching your startup, it is important that you have some idea on how you will respond to the queries of your potential investors.

Be ready to answer questions such as: What is the scope of your industry? Why should I invest in your company? How much will I get when I fund your business? What is your edge over other companies?

Being prepared to answer such questions will greatly improve your chances of securing business funding. The key is simply to make the investors understand your industry and where you are coming from. If you do that, there is no doubt that you will be able to get the venture capital that you really need.

Aside from being able to respond to the questions thrown at you, you should also try to observe the following tips on how to effectively educate your potential investors about your industry:

1. Explain your industry in a familiar manner – It is important that your potential investor understands your industry. And you can only do that by explaining it to him or her using a familiar context. For instance, if your industry is something that concerns e-commerce, then you might want to explain it by using a relatively known concept such as trade or marketing.

2. Avoid jargons – When talking about a concept that we are knowledgeable of, Continue reading “Educate Your Investors: Effective Ways to Secure Business Funding”

07/13/201206/28/2017

Planning for Change in Business Plans

Business plans are not etched in stone; yet that is exactly how some businesses treat them. The business plans are written and then put into a proverbial drawer where they never see the light of day. One day the plan is dusted off, updated for the Board of Directors, and then put back into the drawer. This does not make sense after so much time and effort has been put into developing a plan that is supposed to establish a clear path to success.

Viable businesses never stand still. They are movers and shakers as they interact with customers, develop new products and services, and adapt to good and poor economies. When major changes happen that affect your business, it is like a time warp because everything changes from that point forward. Change is always imminent today and largely because of technology. Businesses can enter the marketplace faster and roll out a marketing program quickly on the internet.

The business plan can quickly become an anachronism if it does not plan for change. This doesn’t mean doing multiple business plans addressing all the what-if scenarios. However, change should be built in to the business plan process. First you develop a business plan based on the most sensible goals using current knowledge and expectations for the future. You can include a decision tree analysis section, if desired. However, you plan to change by simply doing an honest and regular review of the developed business plan.

It is important to have the same groups involved in the original plan development also participate in review sessions. The business plan may need to be revised, but you have identified where and how which is good strategic management.

The real issue is whether management can develop the discipline needed to make sure the business plan is regularly reviewed. Developing business plans should not merely be an academic exercise. It needs to be an important management function.

Browse www.funded.com for more advice about getting your business funded.

07/11/201206/28/2017

Adding Internet Marketing to Your Business Plans

Incorporating internet marketing in business plans has become an imperative as opposed to an option. That probably became true when even the large storefront businesses began to do internet marketing. Judging by the number of websites, online accounts and emails sent with discounts for online shopping, the internet is playing a larger and larger role in all business models.

The implication is that internet marketing should not be a separate strategy. It needs to be integrated in the total marketing plan. It should not be a standalone subsection in the marketing plan. It needs to be weaved into the various marketing efforts, in addition to be being a unique effort.

For example, the business plan can include the development of a website and a discount campaign. However, the offline marketing efforts need to incorporate the website and the discount campaign also. For example, direct mailing of advertisements can be integrated with online marketing by developing the tactics the big department stores have successfully developed. The offline direct mail advertisements encourage online shopping by offering discounts, and the online emails encourage offline shopping with special discounts.

Of course, you can have a description in the business plan for specific internet only strategies. For example, you can discuss strategies for obtaining client leads and set goals for the lead-to-customer conversion rate, the number of transactions and the targeted average dollar sale. Yet there is still integration needed with offline marketing needed. Offline marketing will play a supporting role in driving people to the website to find the online-only discounts.

There are a number of online marketing strategies that can be addressed in business plans. They include developing the business website, participating in social media and blogging, and so on. The important point to keep in mind is that the marketing plan needs to be a cohesive integrated plan and not a disjointed set of offline and offline activities.

More detailed information and useful advice can be found at 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 to access a vast network of business people, entrepreneurs, partners and service providers to help you start, finance and run your business, check out our website.

06/29/201206/28/2017

Brand Your Business to Attract Investors

Investors are going to be attracted to a business that has a strong and reputable brand. When a business is ready to expand and needs a capital injection, having an established brand adds value to the business proposal. A positive brand is a business asset because it differentiates the business. That is the kind of business characteristic investors will look for as part of their business plan analysis.

Investors are well aware that brand recognition gives a company a competitive edge. A business already established in the marketplace creates a brand image either purposefully or by accident. A brand created purposefully should reflect the positive image and reputation of the business based on the product delivered and the customer service. A brand created by accident may or may not be positive.

Branding is a message sent to the marketplace, but it can also help you deliver a message to investors. Investors know that a good brand image, even if the company is young, is important to future success. Customers are more supportive, and marketing can be more effective when the business has a solid brand image.

Branding can also be the common theme that ties together the business plan, products and services, customers and employees. It is related to the business culture and thus has specific value. Investors considering funding a business will be more likely to do so when the brand image is well accepted in the marketplace and employees can take pride in what they offer customers.

Browse www.funded.com for more advice about getting your business funded.

06/25/201206/28/2017

Attract Investors by Improving Cash Flow Before Cash is a Problem

One of the important factors investors consider when evaluating a business plan is the amount of expected cash flow. They scrutinize the assumptions that were made in order to make a determination as to their validity. One of the lessons to be learned from investors is that you can improve your cash flow before you even have cash flow to report.

What does this mean? It means that the steps that are taken to improve cash flow for an ongoing business are the same steps that should be incorporated in the cash flow statement included in a business plan. Sound business practices can and should be used to prepare the cash flow projections. In fact, one of the first rules of cash flow is to prepare a realistic projection. Investors evaluating a business plan will carefully review the assumptions made in view of the marketplace conditions. Sometimes businesses are tempted to overstate cash flow in the belief this increases the chances of funding. However, investors have a lot of experience evaluating cash flow statements and overstatements will be spotted.

When preparing a cash flow projection, you need to consider the factors that influence cash flow during operations. The projection should assume reasonable customer terms and collection policies. The business plan should also reflect market segmentation based on products. For example, the timing of inventory purchases is influenced by the type of products sold. Cash left in the bank will earn interest that can be included in the cash flow statement, while cash invested in inventory is tied up until the inventory is sold.

These are the types of detailed analysis the entrepreneur needs to do long before a business plan is presented to investors. In other words, you want to be able to prove you know how to maximize cash flow based on realistic assumptions and best practices.

Browse www.funded.com for more advice about getting your business funded.

06/22/201206/28/2017

Listen to Investors and Learn About Internet Startups

Investors will tell anyone who wants to listen that the internet has changed the face of investing in some respects and maintained investing rules in other ways. Early stage internet businesses can now start on the proverbial dime which has encouraged entrepreneurs to jump into business enterprises. However, just because you can start a business cheaply doesn’t mean you can keep it going.

Though there are stories of businesses like Facebook started in a dorm room and now sold for billions that is not the typical story. Yet the success of Facebook and other startups bought by larger internet businesses like Facebook make it clear that there is a market for these types of startups. In fact, the Wall Street Journal ran a story that discussed the fact that each year there are 15 winning tech companies started each year, and they are able to grow because of investors willing to fund seed-stage and young companies.

There are some lessons to be learned by the tech company successes and failures. For one thing, investors now expect new internet businesses to have a substantial following before they seek funding. That is a reflection of the fact that there are thousands of internet based startups every year so investors can be selective based on the sheer quantity of businesses. The good news for young internet businesses though is found in the fact that investors are looking for the next great internet companies. They want to help startups and they want to see entrepreneurs with great ideas succeed.

That is the real lesson to be learned from the internet winners and losers – everyone has a chance to be winner.

More detailed information and useful advice can be found at 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.

06/20/201206/28/2017

Don’t Be Nervous When Pitching Your Business Plan to an Investor

Selling a business plan to an investor can seem like an intimidating proposition. Many entrepreneurs are skilled at product or service design and development but shy about presenting the concepts in order to land funding. Let’s face it – designing and selling are two very different activities. One takes know-how and specialized training while the other requires high quality communication and presentational skills. Blending engineering genius with selling savvy is not always easy.

Making a business plan presentation to investors is not difficult, but it does require preparation and rehearsal. It’s probably safe to say that most small business startups are not comfortable making a pitch to experienced investors. There’s always a fear of saying the wrong thing, not adequately conveying the passion for the business, or of looking foolish.

Feeling nervous is natural unless you are a professional speaker. Overcoming the nervousness is important though because investors expect the business owner to be comfortable enough to present the business plan. If the thought of making a business plan presentation puts fear in your heart because of the importance of the meeting, there are several things to keep in mind.

First, you need to prepare the presentation well in advance and practice, practice and practice some more. Even if you are highly confident about your ability to make a presentation, you still need to practice because this is too important to leave to chance. Second, the presentation needs to be streamlined for the investors. The business plan has the details of the business documented. The presentation should be reduced to a two page summary and no more than 15 slides.

That goes back to point one. Capturing a business plan on 15 pages without resorting to stuffing as much information as possible on each page is more difficult than it may sound. That’s why you need to prepare the presentation long before meeting with investors and then practice, practice and practice some more.

It’s true what they say – practice really does make perfect.

Browse www.funded.com for more advice about getting your business funded.

06/18/201206/28/2017

Turning a Good Idea into a Prototype Can Attract Investors

When you are looking for investors to fund the manufacturing of a new product, it’s a good idea to have a prototype ready. A prototype by definition is a preliminary model or early sample of a product. It can be used to test a particular concept to make sure it can be turned into reality or can serve as the first sample of something that will be copied once funding is obtained.

Investors like prototypes because it brings a concept to life and proves that the concept is doable. It serves as proof that the business idea can be turned into a practical product that can be sold to customers. A prototype also proves that the entrepreneur or business has fully developed a concept and that the investors are not being asked to fund a pie-in-the-sky

A prototype should be market tested to prove that the product fulfills a customer need. That is like gold to a business and a business plan. Presenting a product that has been tried and accepted by potential customers greatly reduces the level of risk associated with a startup operation. However, small startups should not make the mistake of only testing the product on family and friends and need to introduce the prototype to the real target market. The business plan can include a report on the market testing to accompany the prototype itself. By validating a prototype, the business has tangible proof that the product can be manufactured, the materials are available, and the product design is workable.

Given the competition for investors, developing a prototype can give a business a competitive edge. Prototypes don’t just apply to manufactured products either. Startup software companies and websites develop prototypes to attract investors too. The key is to develop the product to the stage where the investors can easily see its potential success in the marketplace.

06/15/201206/28/2017

What Investors Want to Find in a Business Plan

Entrepreneurs listen to professionals working with investors tell them over and over again that they need to develop a business plan. Instead of getting help, some managers finally develop one on their own, but it doesn’t take long to figure out that it lacks real effort. Investors are savvy and have read hundreds of business plans so recognize when a plan has been assembled in a haphazard manner.

In other words, you can’t fool the experts. A business plan lacking quality reflects a lack of concern about the business brand and on the business owners and management. A poorly designed business plan also sends a message that the business owners have not taken long range planning seriously and so casts doubt on the ability of the enterprise to succeed over the long term. It will be almost impossible to attract investors with this kind of business plan. Investors need confidence that their funding will be used in a successful business model that will earn the return expected.

What constitutes a poor quality business plan? First, they typically leave out important sections like the market analysis. Secondly, a plan that is poorly organized and difficult to read makes it nearly impossible to find information, and that discourages investors. Third, a business plan filled with typos and grammatical errors indicates that no one read the plan more than once or that it was written quickly with little thought. Fourth, a plan with inadequate research and lacking data and facts that can be verified will also turn investors away.

If you want to ensure investors pay attention to your business plan, then you need to pay attention to it too. To get the attention of investors, entrepreneurs need to develop a solid plan that reflects thoughtfulness, research and long range planning. A high quality business plan is a blueprint for success, and that’s exactly what investors are looking for – success potential. If you are not comfortable writing a business plan then the first step to take is getting experienced help with the preparation. There is just too much riding on the business plan to do otherwise.

Browse www.funded.com for more advice about getting your business funded.

06/08/201206/28/2017

The Right Investors for the Right Business

Finding the right investors for small businesses is often top of the list for entrepreneurs. It’s tempting to cast a wide net and see who shows any interest. That may work sometimes, but it often leads to a lot of wasted time and possibly loss of some control over your business – a loss that was not intended. It’s much wiser to go after the right type of funding and maintain control over the process. There are so many different kinds of investors that you can target, and you want to attract the ones that fit your strategic goals to save time, effort and money.

Investors all have one thing in common – they want to get a decent return on their investment. However, they have different requirements concerning collateral, equity ownership, business control and investment payback time. Each of these issues must be carefully evaluated from the business and the potential investor’s perspectives. For example, venture capitalists may want to share control of the business depending on the circumstances. If you don’t want to give up control, it would be wiser to attract angel investors or apply for a business loan.

Small businesses need to exercise the same type of caution with investors as the large corporations do. Matching the right investor to the right investment is a formula for success. However, it never pays to get too excited about accepting funding from investors unless you fully understand the advantages and disadvantages of that particular type of investment. The reason there are so many types of investors is because there are so many different types of business needs.