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Agility: The Key Advantage for Small Businesses

Agility

In the dynamic landscape of today’s market, small businesses often find themselves competing against larger, more established companies. While it can be challenging, there’s an unseen advantage that many small businesses overlook, yet could be the key to not only surviving but thriving in this competitive environment: agility.

Agility: The Hidden Gem in Small Business Strategy

Agility Defined

In the business context, agility refers to the ability of a company to rapidly adapt to market changes and adjust its operations accordingly. It’s about being flexible, responsive, and adaptable. For small businesses, agility often translates into making quick decisions, implementing changes faster, and being more in tune with customer needs.

Why Agility Matters

  • Rapid Decision-Making: Unlike larger corporations that might be bogged down by layers of bureaucracy, small businesses can make decisions quickly. This rapid decision-making process allows them to respond to opportunities and threats much faster.
  • Personalized Customer Service: Small businesses have a unique opportunity to offer personalized experiences to their customers. Being agile means, you can quickly adapt to the specific needs and preferences of your clients, creating a loyal customer base.
  • Innovative Solutions: Agility fosters a culture of innovation. Small businesses can experiment and implement new ideas without the extensive red tape that larger companies might face. This can lead to unique products and services that set your business apart.

Harnessing Agility in Your Small Business

1. Embrace a Flexible Mindset

The first step to becoming more agile is fostering a mindset of flexibility and openness to change among your team. Encourage creativity and be willing to pivot strategies as needed.

2. Streamline Decision-Making Processes

Review your current decision-making processes. Are there unnecessary steps or approvals that could be eliminated? Streamlining these processes can significantly increase your agility.

3. Invest in Technology

Technology can be a great enabler of agility. Utilize cloud-based tools and automation to improve efficiency and responsiveness. This doesn’t have to be a huge investment; many cost-effective tools are available that are tailored to small businesses.

4. Stay Close to Your Customers

Regularly engage with your customers to understand their needs and pain points. This can be through social media, surveys, or direct conversations. The closer you are to your customers, the quicker you can adapt to their changing needs.

5. Foster a Culture of Continuous Learning

An agile business is a learning business. Encourage your team to stay updated with industry trends and to continuously develop their skills. This can be through workshops, online courses, or attending webinars and conferences.

Real-World Examples of Agility in Action

  • A local café quickly shifting to online orders and delivery during a lockdown.
  • A small tech company rapidly developing a new app feature in response to user feedback.
  • A retail store personalizing their marketing strategy based on customer purchase history and preferences.

The Path Forward

In a world where change is the only constant, agility can be your small business’s most significant advantage. It allows you to navigate the complexities of the market, meet customer needs effectively, and stay ahead of the competition. Remember, it’s not just about being small; it’s about being swift, responsive, and adaptable. Embrace agility and watch your business soar to new heights!

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Things That a New Small Business Owner Must Expect

Business Owner

Many people dream about starting their own business, but very few are actually able to live their dreams by executing them, and even fewer make it past the first five years. This is mainly because a large number of times, some business owner don’t really know what to expect.

There are no words to describe what it feels like but in simple terms; it’s fun but scary at the same time. A large number of small businesses fail because of an inability to successfully make it past year one.

Many business gurus believe that with the right knowledge of what to expect, a new small business owner will know how to prepare for upcoming challenges. Here are a few things that any new small business owner should expect.

Be Ready to Hustle When You’re Tired

Isn’t that what being a small business owner is about? You may be thinking that as a small business owner, you can take a day off when you feel like it but that’s not the case. As the brains behind the entire operation, you need to hustle even when you feel like you’ve done enough. That’s the difference between being an employee and a business owner; you’ve never done enough.

There will always be paperwork that you need to sign, orders that you need to make and customers whom you need to talk to, especially in the first year. Just like in every other phase of life or an industry, the initial period is always make-or-break, and the end result highly depends upon how much work you put in.

You can spend each second checking and rechecking your plans and improving them, working on ideas and developing new strategies. After all, there’s so much on your plate (marketing, product development, vendor contracts and employee training)

You Can’t Make Every Customer Happy

It’s true that as a business owner, you need to retain a sense of balance in everything you do but when it comes to satisfaction, you can’t make everyone happy. As a small business owner, you’re bound to make quite a few customers unhappy and the truth is, you don’t really need to make everyone happy, either.

It’s important that you remember that the key is to have a consistent customer service policy and handling complaints carefully. If your product doesn’t impress a customer all that much, then the way you handle a complaint is sure to make them a loyal customer.

A major factor that differentiates your small business from that of a larger conglomerate’s is that you, as the owner, can give customers the attention they want, which is why they are likely to approach your brand in the first place.

Be the Master of All Trades

When you first thought of starting a business, you may have guessed that you’d only have to sign things and the wheels of your business would turn themselves. Wrong. In year one, you should expect to be able to do everything and know how every process works.

Along the way, you’ll think ‘they didn’t teach me this at business school’ as you try to find a good web hosting company for your company website or take aesthetic pictures of your products so you can post them on a social media account. You don’t learn everything about starting a business; you have to experience it hands-on.

From managing office operations during the day to writing content for your website at night, you’ll have to do most of it in the first year. You’ll be lucky to have friends or family who’ll be willing to help around but in year one, you can’t afford to hire many employees. In addition, even when you do get people on-board, you’ll have to know how to do things yourself before teaching them the basics.

Be Familiar with Laws

No this is where it gets interesting. Staring a small business will require you to be familiar with laws about hiring and taxes so that your business will genuinely be able to help people in the community by offering employment.

There are a number of regulations, laws, and licenses you need to know about before you can officially carry out operations as a business. In the beginning, you should expect to hire a lawyer for such needs because it’s impossible for you to know all the complex regulations that surround the startup of a small business.

This is crucial because no matter how hard you work on your business, it’s likely that even a small detail or legality can be held against you. You’ll be doing yourself a favor by investing in proper legal advice and obtaining all the licenses you require. Nevertheless, legal counsel isn’t cheap so you should expect to have enough financial resources.

There Will Be Some Bumps along the Road

Failure, no matter how big or small, is an inevitable part of running any business, whether big or small. You could make a product that doesn’t turn out as successful as you thought, your marketing strategy may backfire or worst-case scenario, you get a wave of negative feedback.

The first year won’t be failure-free but that doesn’t lessen your chances of reaching success. To keep yourself prepared for these situations, business experts advise that before you should quit your job, you need to have some savings. To be more specific, you should have enough money to support yourself for a year.

You need enough savings because no matter how well you plan the first year of your business, you can’t predict the future so there is always a chance that you might fail. There’s nothing wrong in preparing yourself for the worst-case scenario while planning for the best.

Conclusion

These are just some of the things that every small business owner must expect, especially during the first year after launching their business. Of course, no amount of expectation and preparedness can actually make you battle-ready to start a business but knowing a few of the most common symptoms will help you diagnose and reassure yourself that this is supposed to happen.

 

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Why It Is Not Advisable to Not Have a Business Plan

Plan

When you start a business, different people will advise you differently on how to turn your venture into a success. While it looks natural to have a business plan beforehand, do not be surprised if you find some people telling you to not have one. According to some, having a business plan limits you in your exploration and prevents you from taking risks. That might hold true in some cases, but that’s not how it is for everyone. Having a business plan is a sensible step, but if you are on the fence about whether to have one or not, here are some disadvantages of not having a business plan to help you make a well-informed decision.

Why Not Having a Business Plan Is Not Advisable

1.      There Is Nothing to Achieve

Milestones have to be an integral part of any venture. When you don’t have any milestones and targets, there is nothing for you to achieve. Having no business plan is the first sign of your non-seriousness with your business. If you could not take out time to create a detailed plan, how can one expect you to manage your business – an activity that could require even up to 16 hours of continuous working at times? The problem with having nothing to achieve means you will have no strategies for your expenses, profits, revenues, etc.

How would you ever know how much you should spend or not spend? Why would you invest in marketing when you don’t have any goals?

2.      There Is Nothing to Interest Investors

There might be some proponents of the idea that a business does not require a business plan, but there are still more people who believe in having a business plan. Investors always need indicators from entrepreneurs to judge their personalities and potentials. Business plan is one of the strongest indicators of a person’s potential of doing a business. When you ask investors for a certain amount of money, the first question they ask is why you need that money or what you need that money for. Your answer to this question can make it or break it for you.

In fact, that is not the only question. They will follow up this first question with a lineup of crucial follow-up questions. For example, if you tell them you will invest the money in marketing, they will ask you about the type of marketing you are aiming for, the return you expect and the costs of customer acquisition. How can you answer all those questions if you do not have a business plan?

3.      Your Marketing Will Go Awry

One of the damages of not having a business plan is your marketing plans going awry. Entrepreneurs have more power to them today than they ever had before. These days, startup owners have internet where they can collect information about their customers in the startup stages. Collecting customer information helps them create buyer personas and target their audience with appropriate marketing. Here are some pieces of information you will have to collect.

  • What age group and gender my product appeals best to?
  • What interests my target age group and gender?
  • What platforms is my target audience most active on?
  • What is the average buying power of my target audience?
  • What type of content best attracts my target audience?
  • What expectations do my potential customers have with my product?
  • How can I personalize my marketing to my audience?

That’s just few of the many questions that you have to get the answers for to make your marketing endeavors profitable. However, all of this homework is a part of your business plan.

4.      Your Team Won’t Share Your Vision

It is crucial for a business’ success to have a team that shares the same vision and endeavors to achieve it. Several studies and researches have proven that employees do not perform at their best when they don’t understand the vision well. You must define clear and vivid targets to your employees for them to know exactly what they have to do to be of value for the company. What you have to realize is that telling your team the vision of the business is not enough. It is a broad concept and does not define the action plan to your employees.

What you have to do is break the process of achieving your vision into small parts. These small parts are the milestones and within each milestone the role of your team is clearly defined. In short, break the entire pursuit of vision into small missions, and explain the role of every team member to achieve a milestone.

5.      You Won’t Know When to Exit

One of the biggest mistakes most startup owners and entrepreneurs make is that they don’t know when to exit. If you can close down your business before it starts hurting you financially, that’s a form of success. The true failure is when you cannot realize that your business is hurting you and you keep burning dollars for its success. An integral part of a business plan is defining favorable and unfavorable conditions for the business to exist.

In a business, you have to define a deadline before which you must see positive results. You have to define a time frame within which you can continue to invest in your business. However, you have to draw a line to make it clear when you cannot continue anymore. If you have been running your business for six months and the money has been going out of your pocket, it might be an indicator that it won’t work for you.

Conclusion

A business plan should be considered a part and parcel of a venture. It is not an optional component because your success rests on it. If you are looking forward to starting your business, it is advisable that you sit down and take time to write and review your business plan. If that is too much for you, hire a professional to write it for you.

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Nail These 3 Strategies Before You Launch Your Social-Media Campaign

Campaign

In today’s digital era, every business dreams to execute the perfect social media campaign to stay competitive. It doesn’t matter if you’re an entrepreneur or run a small business, the need to launch your social media campaign is becoming inevitable over time.

Some of the biggest businesses of our times are known to create strong social media campaigns. Not only these promotions lead to increased profits, these campaigns allow a business to connect with their consumers, on a human level.

Already, a large part of today’s online content has now moved on to social media. It is natural for businesses to work on creating the best social media campaign that is crafted to bridge the gap between businesses and their consumers.

Why do you need a social-media campaign?

  • Boost awareness
  • Increase loyalty
  • Earn more profits

When you spread awareness and offer solutions to your target audience’s problems, you automatically get a decent number of loyal customers.

Three Strategies you must nail before launching your Social Media Campaign

But before you implement your social-media strategy, here are 3 strategies you must work on to get the most out of your campaign.

1. Set a Goal

If you don’t have a goal, you don’t know what you want to achieve through your campaign. Your goal defines the content and sets the mood for your social media plan. When you put your audience first, you are eventually able to plan and execute a successful campaign on all channels.

Do your homework to know the needs, wants and challenges your audience faces every day. Companies can collect relevant information through surveys or study their consumer behavior to identify the most common problems.

Talk it out with your marketing team. Explain how your products or services aim to change the current scenario. When you clearly define the goals of your campaign, you are able to work on the heart and soul of your brand. This is the ‘one thing’ that sets you apart from your rivals.

Some common goals that today’s aspiring and established companies wish to achieve through a social media campaign include getting more followers, creating interest in a new product and building your mailing list. There is no one-size-fits-all approach to creating a successful social media campaign. Hence, you need to define goals and objectives every time you are launching a new campaign.

There are many other factors that you need to focus on to guarantee true success.

  • Which platforms will work best?
  • What kind of content should I create?
  • Do I need to include a video in my campaign?
  • How do I assess and track results?

Once a business finds clear and precise answers to these questions, it is easier to design and deploy a campaign.

2. Setting a Calendar

Now that you’ve done all the strategic part of launching the promotion, you need to create a schedule or a yearly plan. Your marketing team sets a fixed schedule that also includes important events, product launches and your business accomplishments. A calendar makes it convenient for a company to initiate, assess and implement your campaigns.

There are many benefits of sticking to a fixed schedule. A calendar allows businesses to work on each individual channel. For instance, having separate posting schedules for your Twitter, Instagram, Facebook and LinkedIn accounts will let you create personalized content, ahead of time.

While Facebook continues to dominate all other social networks with roughly two billion monthly users, don’t forget to include other mediums such as Pinterest and YouTube. Since video content is going to capture more than 80% of all internet traffic by 2022, it is important that you also include a video strategy to attract more users.

If you are an entrepreneur or a small business owner, it is a great idea to start working on a couple of social media channels before embracing them all. Once you have a respectable fan following on one channel, you can direct your traffic to another medium.

3. Monitor Outcomes

What’s the point of creating or deploying a social media campaign when you fail to track down its progress? The truth is that it is crucial that you utilize analytic tools and metrics to judge the overall performance of your strategy.

If you do not know what tools or methods will give you the best tracking results, make sure you work with the best marketing team to help you gain valuable insights.

One thing to note is that the metrics of a campaign may change with its goal. For instance, if your promotional strategy is aimed at awareness, measure growth and engagement. The metrics also include shares, likes and dislikes.

If your business wants to boost its sales, track click rates, conversion rates and shares.

When you have designed a campaign to increase loyalty, look for sentiments, engagement and influence.

What else should you do?

The secret lies to know your audience for creating the content that clicks with them. For instance, Facebook dominates all mediums as 68% of American users are active on this network. But Facebook works better when a company is targeting older users.

If you are launching a promotion for a younger audience, choose Instagram. If you are uploading videos or tutorials, YouTube continues to beat other streaming networks. Since Google now owns YouTube, uploading your content on your official YouTube channel may also improve your rankings.

Moreover, there are many social media celebrities who can endorse your products or services. Can you imagine the effect it will make on your audience? Identify key influencers in your particular niche. Partner with the most influential personalities in your industry to spread your brand message.

This tip works because the influencer you’re connecting to already has a massive network. This strategy is a hybrid of new and old marketing tactics.

Bottom Line

The implementation part revolves around narrowing in on the daily tasks. Once your marketing team has nailed the 3 strategies, the rest of the work becomes less complicated.

Moreover, it’s not always about the size of your budget, but how you spend your marketing dollars. Sometimes, smaller brands deploy more popular social media campaigns than big brands that spend millions on promotion.

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Overcoming a Bad Business Location – Is It Possible?

Location

In today’s day and age, experienced business owners advise future entrepreneurs to work on their online presence. They should develop an impressive website and practice social media marketing, among other activities. It almost seems as if you can build a great brand based on an influential online existence. However, even though this is true to a certain extent, don’t undermine the importance of a good business location.

This makes it crucial for new business owners to look into the location they will set up. But it’s still possible that issues like financial constraints can lead to them running a business in a bad location. Many startups seem to fail due to this reason. While there isn’t an immediate solution for the predicament, you can take particular measures to alleviate the circumstances. Here are some of the ways that you can overcome a bad business location:

Implement Impactful Branding and Signage

It’ll be hard for people passing by to avoid your store if you manage to lure them in with attractive signs and branding techniques. Captivating signage always manages to pull potential customers out of their way to stop and have a look. A billboard that appears to stand out from the rest works the best. You shouldn’t opt for one that blends in and looks similar to that of competitors. For improved results, take it a step further and provide customers with customized shopping bags that will make others do a double-take.

Brand Your Business

Oftentimes, you can turn the main disadvantage of your business location into something beneficial. Being the only brand selling something of your niche in the area is better than opening shop in a district where your competitors operate.

There are likely people actively looking for your products in the area because they’re far from the district that has most retail outlets. By branding your location online, in local publications and with flyers, you can attract loyal customers to your shop.

Developing a loyal customer base is more effective than having more people walk into your shop. There’s no point if the people walk out with nothing because ‘there’s another shop here’. These customers can boost their reputation among their friends and family. This is far more valuable in today’s world where word of mouth decides what brands people choose.

Make Friends

Since other businesses will surround you, you can use the opportunity to make friends and form collaborations with these brands. Promotions like these can raise hype for both you and your partners, so it’s beneficial for you to approach them with such an idea in mind.

A good example is that you give customers a discount if they show that they purchased from a collaborating store. While it’s best to form agreements with businesses that complement yours, such a tactic would still work when dealing with unrelated fields.

Leverage Online Presence

By becoming ‘that one brand with the –-online, you have the potential to lure in customers who live far from your business location. A charismatic and humorous social media persona will get you far as well because millennials appreciate brands that make the effort of seeming human. You can even leverage social media hashtags that have a certain amount of momentum. However, don’t generalize it, or make it too narrow.

That way, you’ll either be associated with out-of-topic posts or you won’t get any posts at all. If you have the capital for it, hire a micro-influencer to give your business location a shout out by offering samples or inviting them to your store. Additionally, you can put your skills to good use by uploading videos to YouTube. By making them informative and entertaining, you’ll drive consumers to your location.

Make Your Location Accessible

In today’s era when the youth prefers to make memories without spending too much money, you’ll be benefited by accommodating their demand. Therefore, make your business space an open one. Not literally, but ensure that it’s accessible, even by people who don’t intend to buy anything from you.

Most outlets and retail stores are condescending to potential customers who are just looking around because they don’t plan on buying anything. It’s your job to be welcoming to them by offering space for activities. Moreover, make your business location a hotspot for social activities.

You can build upon this idea by holding events yourself, and keep space reserved for events. This way, people that are close by will know that there’s a trendy-looking place in the area that’s all prepared to hold a small event.

Make Use of Windows

Windows offer an intimate look into what’s going on in a particular location. Hence, they’re commonly associated with curiosity. People have a general instinct to look into shop windows, even if they’re not paying attention.

Enhance awareness of your brand among potential customers by placing your best products at the shop window. Or better yet, make it a more personal experience by allowing others to have a look inside at the activities you hold. These are very significant factors because of how they can encourage people to walk into your store.

Talk to Local Media

There are countless ways that you can boost your visibility in the area. Hence, you can make a seemingly bad location work out for you. By talking to local media outlets, such as radio stations and magazines, you can get some flattering press, which adds value to your brand.

People who hear about you through such channels are likely to want to have a look at your products. If you’re up for it, you can write pieces for local publications or give interviews. This step allows the community to know you better. By developing a closer bond with the people around you, the chances of them putting your first before any other brand become higher. These are just a few ways that you can overcome a bad business location. While you needn’t try all of them, it helps to test more methods.

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Developing A Business Startup Success Strategies That Works

Success

It can be easy to lose sight of the very reasons why you wanted to open your business startup. You can get wrapped up in the day-to-day operations, leaving little time to focus on what makes your business startup standout in the market. Having a strategies in place that allows you to keep you motivated can ensure your business stays on a path of success.

Fall In Love With Your Business

Any business that you invest your heart in soul in should be the great love of your life. You need to nurture it and watch it grow. Having a real passion for what you are doing and the products and services you sell can make your business startup a real labor of love. You should have a real hunger that drives you to do well. Making your business startup idea one that you can stand behind and love to eternity is the first step in achieving success.

If it seems that you are losing that connection with your company and not really feeling the love, take a step back and allow yourself to remember how it all started. This can spark your emotions for your business and allow you to fall back in love with what you are doing. Your passion for your business is often times enough to get you through the challenging times.

Surround Yourself With Good People

From your employees to your professional network, the people that you surround yourself with can have a strong influence on your business startup. These very people can give you new ideas and help educate you on your business’ operations.

Having positive people to lift you up can be a strong motivator and allow you to have someone to bounce thoughts off of when you feel uncertain about a decision. Use your network to gain valuable information and learn from your peers on what mistakes to avoid. They can prove to be a big part of helping you run your business and ensuring it is successful in its endeavors.

Don’t forget your employees; they can be a big part of keeping your focused on your business startup on a daily basis. Good employees will drive your customer service and in turn your revenue. When your employees believe in your business and the vision you have set for it, it makes it that much more important that you deliver now and into the future.

Create A Marketing Strategy

Having a marketing strategy in place to promote your business is necessary to help achieve strong revenues. You should have prepped and planned a strategy that you want to adhere to market your business startup to your customers. It doesn’t have to be a large portion of your budget, but it should include some effort on your part.

Think about where your customers go for their information. Be visible to them and make sure you use every opportunity that is available to you to market your business with both new and existing customers. Try social media, check into local advertising, hold and an event, and use what is available to you to reach your customers and introduce your business’ products and services to the masses.

If you stay aggressive with your marketing plan, you are sure to garner the attention of your current customer base as well as a new group of potential clients. This can bring in more revenue and keep your business startup on a path of success.

Get To Know Your Customers

It is your responsibility as a business startup owner to know everything there is to know about your customers. You should have a strong idea of who they are, what their likes are, and where they are located. When you truly understand your customers, the more effectively you can serve them with your products and services.

While your attention may be turned toward gaining new customers, don’t lose sight of your current clients. They are the bread and butter of your business, and you want to make sure you are not replacing existing customers with new customers at a losing pace. Show your loyal customers how much you appreciate their business. Without them, your business will only see marginal success, and you want to make sure to grow your business startup rather than be stagnate in its approach.

Take Time For You

It may be difficult to imagine, but you need time away from your business startup. You may think that you can’t take time away or that your momentum will crumple without you, but taking a vacation every now and then is one of the best things you can do for your company. When you step away for a moment, you allow yourself the opportunity to recharge and refresh. You’ll be able to see your business in a new light and be surging with motivation when you return.

You’ll be surprised at how much a vacation from your business startup can do for you. You’ll be filled with new ideas and solutions to problems that you previously thought unsolvable. Being able to see your business from a new angle can be just what you need to take it in a new direction, move it forward, or reach to new heights. Your business startup will appreciate the time you took, and you will be ready to take on new challenges with a fury as your drive will be restored and you will feel anew.

Plus, you have good people surrounding you that you can trust to steer the ship when you are away. Rely on your employees and allow them to do what you hired them to do. You’ll be pleasantly pleased with how quick they are to pick up the slack when you are away and the positive results you’ll see upon your return.

Having a strategy in place can ensure your business stays on track and experiences great success now and into the future. It is important to stay focused, think about your customers, and take a break when you need it. By embracing your business startup and trusting in yourself, your business will reach the success that you deserve and have always envisioned.

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3 Ways to Gain Investors for Business Startups

gain

There are a lot of things that business owners have to think about to gain and establishing a startup. However, nothing is more important and challenging than finding investors who are willing to listen to a pitch and possibly provide funding for business startups.

Unfortunately for entrepreneurs, finding an investor is not an easy task. Sometimes, one has to talk to at least fifty persons just to find someone who is willing to provide capital for the business startup. The number is even higher in case of startups that focus on special fields such as medicine, among others.

Despite this challenge, there are a number of resources that could help a potential million-dollar business reach the top. Here are some things that could help a business startup owner attract and gain investors:

Establish Social Media Presence

There are a number of social media sites on the Internet that could help and gain an entrepreneur find an interested investor. Having a profile in such sites makes it easier for investors to understand your business and gain their possible trust for a partnership. Browsing through other profiles can also help business owners establish connection to a number of investors who are based in other areas.

Create a List of Possible Investors

The problem with neophyte business owners is that they usually think that all investors are interested in what they have to say. This is not true. In fact, the possibility of getting an investor on board is highly dependent on their interests.

So as not to waste time pitching to someone who is not interested, a business owner must create a strategic list of people who are known to be interested in the kind of business that they are planning to start. Entrepreneurs must keep in mind that some investors only put money on specific fields such as medicine or information technology. Knowing the interests of the investors will surely remove some of the time that has to be spent looking for financial support.

Maximize Networks

Securing an investment requires a lot of trust on the part of both the investor and the business owner. This is usually a problem for owners because some investors would refuse their proposals out right because they don’t know them

In order to avoid this frustrating situation, business owners are advised to use their connections to get acquainted with a potential investor. Having someone introduce you to a possible partner is a good way to get his or her approval. This is clearly much better than having to introduce a business without the support of a network.

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What Makes up a Perfect Business Plan

Doing business plan

Whether you have a small business or a large one, you have to have a business plan in order to set a path for it. A business plan is more like a manual or guide that lists your goals in an order, and how and when you will achieve them. It is even better to have a plan B if things do not work out the way you expect them to. But an important question you should ask yourself is “what makes up a perfect business plan?” What are the important factors that you have to take into consideration to create the perfect business plan?

Of course, you can’t make a plan randomly because business matters are a game of numbers—you have to be precise and accurate.

Describing Business and Writing a Summary

The first and foremost part of any business plan is the executive summary. It is a summary of what’s included in your business plan. You have to keep in mind the word “summary” i.e. you are supposed to summarize everything. You will face two challenges when you do that. First, you will have to find the most selling and appealing parts of your reports to grab the attention of the readers of your business plan instantly. Secondly, you have to find a way to shorten all the descriptions. Bear in mind that the details are in the plan itself, so you have to efficiently summarize all the points.

Furthermore, you have to explain the industry and your business. At this point, you want to talk about what industry your business serves, what the industry looks like and how much potential of growth your business (and the industry) has in the future.

Market and Competitor Analysis

At this point, you will have to put in some work to gather the details that will fill this section of your business plan. You have to know the market that you are about to target. For this, you will have to analyze the market and the sub-markets within it. By doing this, you are trying to paint a clear picture of your target audience. Without this type of analysis, you could end up selling the right product to the wrong people, which means your business will not survive. As you are describing your target audience and how you will approach them in the most effective way possible, you will have to do some analysis of your competitors.

It is just another level of market analysis. You want to get a good idea of what your competitors are doing to run their similar businesses and how much they are succeeding with their strategies. You should also pinpoint their weaknesses and why certain strategies are not working. When you have a business with many competitors, your investors will always ask you several questions about your competitors. They do this not only to know how knowledgeable you are about your target market but also to figure out if what you are about to do is going to work at all.

Development and Design

This is the section where you will define not only the design of the product but how the development takes place. Are you creating the product in your garage or do you have manufacturing plant working for you? How do you get the materials for creating the product? Are you producing your product within the country or outsourcing the production? In case of either of the options, you will have to explain why you have chosen that path. Investors will also ask you how much it costs you to design your product and make it available on the shelf.

What they don’t want you to do is pay more for the production and design of your product than you should. If there are other options available but you are sticking to the expensive ones, it will show them either the stubborn side of your personality or the less knowledgeable.

Costs of Operation and Management Planning

The ongoing processes of the business are the most important ones to pay attention to. How have you planned to take care of the daily matters? How have you assigned the roles and why have you assigned them to certain individuals? At this stage, you also have to talk about the costs of operations. You have to keep your costs realistic and justify that what you intend to spend is not an excessive by any means. In the costs of operations, you will also have to have an estimate of how much you will be spending in salaries. You can include this particular piece of information under the financial planning section as well.

Financial Planning

In this section you have to describe how you intend to finance the business. Are you using your own money to start the business or have you borrowed it from a family member? What kind of debts are there on your business. Debt is deadly for a business, so you want to have a very strong plan on how you will handle the initial debt when starting the business. You also have to show your management of the financial resources and knowledge to prove that any loans that you are taking for the business will be paid off in time and with ease.

If you have given a detail of various loans that you intend to use for your business, you will also have to state how you will use the money. Your usage of the money should be precise. At no point should the investors get a hint that you are going to use the money for something personal or something that will not benefit your business in any way.

Conclusion

Last but not least, make projections a part of your business plan as well. You will need to ready balance sheets and income statements for the coming years. It is imperative to know here that business plans are just assumptions, not facts. You should always expect things to go a bit away from how you planned them. However, such minor setbacks should not stop you from going forward and turning your small business into a large one.

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Here Is What Small Business Owners Should Know about Angel Investors

Investors

When you have a small business, and you are serious about its growth and expansion, you have to use every option available to you to get the funds you need. In some cases, venture capitalists are not really a good fit for funding the startup or small businesses. They focus a lot on the returns they get from their investments, and somewhere in that attempt, they forget to pay enough attention to the needs and limitations of small businesses. One of the best solutions for small businesses to get the required funds is angel investors.

What Is an Angel Investor?

The name angel investor should give away why the industry calls them that. Other names for angel investors include angel funders, informal investors, business angels, etc. An angel investor is mostly one person, but may also be a very small group of investors. They invest in startups and small businesses that most venture capitalists would consider too risky for investment. They try to be extra helpful for startup and small business owners by providing the required funding and also helping with advice on matters.

In many cases, the angel investor will put his/her own money on the line to help your business. The reason for their investment in the risky business is that they are independent in their decisions. They might find your product interesting even when others don’t see any scope in it. You would not expect them to invest huge funds compared to those from venture capitalists but with their popularity increasing with time on the internet, angel investors can also invest huge amounts now.

A Detailed View of Angel Investors for Small Business Owners

Types of Investments

The first thing to know about angel investors is the type of investments they are leaning towards usually. The interest and motivational factors are different for angel investors compared to those of venture capitalists.

An angel investor is willing to invest in startups. It is easier to convince an angel investor to invest in a startup than it is to convince a VC. However, even a VC will show interest in a small business in its early stages if they are 100% sure of its potential and future success.

One of the most important things to point out here is that angel investors are highly interested in local businesses. If you run a business in New York, you would want to find investors in New York. Angel investors like to support their local communities and economy. Furthermore, local businesses are easy for them to test for their validity. As for the market type, angels prefer to invest in businesses that are playing against small competitors. If your business is about to become a part of a contemporary market with several giants already monopolizing it, the angel might not show interest.

Their Favorite Places

When looking for investment for your business, you must know where you can possibly find angel investor. There is no specific place that you can say has the best angel investors. However, you can try fundraising advisors to help you find the investors that would be interested in investing in your business. You can search for angel investment groups in your area or on the internet. The good thing about such a group is that you have a higher chance of persuading someone to invest in your idea.

You will be glad to know that angel investors love to be a part of events where they get to see various business owners from around the country pitching their ideas. Their events are more common than VC events. In fact, it is much easy to attend their events because the entry is not expensive and you can find them even in small cities. You can also find angel investors online. There are websites that specifically put small business owners in touch with angel investors. All you have to do is create a compelling pitch, so investors can see how serious you are with your investment needs.

The Way to Compel and Persuade Them

It would be wrong to say that angel investors are interested in ideas alone. In fact, that’s where the angel investors differ entirely from venture capitalists. They don’t focus solely on the business idea and its scope in future. An important part of their decision-making process is to know the entrepreneur and his/her team. It does not matter how unique your business idea is because if you and your team are not convincing enough, they will not invest in you. They love people who like to get to the point, and that comes off as your strength.

For example, you would want your presentation to be not more than five or six slides. Don’t waste too much time trying to convince them that your idea is different. Get to the point, tell them what you want and how you are going to achieve the targets you have set, and that should be enough. When you sit down with angel investors, be sure to value your company reasonably and offer them a sensible share. A crucial thing to remember is that it takes you much more time to find the right angel investors than it takes to convince them. Miss one opportunity and you could end up spending months and years looking for another investor to listen to you. Don’t blow your opportunities away once you get them.

From the information above, it might sound angel investors are much more flexible than VCs, and that’s true to some extent. However, this should not give you the impression that angel investors are non-professional. They expect due diligence from you before finalizing a deal.

Make sure you have protected your unique ideas with patents and proper technology before you present them with your idea. Secondly, have the right permissions, certificates and other documentation on hand to show that you have everything in place. In the end, be on top of your security game, i.e., you must know how new security-related regulations around the world are going to affect your business and how you will tackle them.

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What Normally Causes Banks to Reject Small Business Loans?

Whether you are a small or a large one, you will need a loan at the start to finance your marketing efforts and operations. It is not that difficult for large businesses to get loans from banks because most lending institutions are more than willing to invest in large corporations due to their dominant position in their market and industry. On the other hand, small businesses do not occupy a key position in the industry, and that’s why banks and other lending entities aren’t intrinsically interested in financing them. However, there can be several different reasons why banks rejecting small business loans. Here are the most common ones.

Reasons for Banks to Refuse Loans to Small Businesses

Short History of Operations

The period a business has been in operation is the number one factor banks consider when deciding on approving a loan or not. Small business owners have to finance their ventures right from the beginning. They might not have even completed six months before they start looking for loan options.

Bank want to see how well or poorly a business has been performing, and it can judge the performance based on the tax filing record for your business or maybe even the record of your sales. What if the loan amount you are asking for is much larger than what the bank deems is easily repayable for you?

The lenders will look at your cash flow reports and decide how much your business is capable of returning based on the amount you have asked for. The bank would often refuse to approve a loan after realizing that your demand is much bigger than your strength to repay the loan.

Loan Size

The bank is a business, and it has to find ways to maximize its profits. Bankers make most of their money from loans they approve for large corporations. Small businesses, on the other hand, are at a disadvantage in this area. They don’t require huge loans, and thus they are not the best prospects for a bank.

The underwriting process is quite costly for a bank, and it only makes sense for them to approve loans from which they can cover that cost. Most small business loans do not go above the $500,000 mark, and that amount is not what the banks will call “big.”

Personal Credit Score

Several online sources will tell you that your credit score will not have any impact when you ask a bank for a business loan. It makes sense from one perspective that the bank should not look into a person’s personal life while giving them a business loan. However, your credit score can affect your business loan application negatively. Yes, it is true that not all lenders will give the same weight to your credit score, but there are many that will.

For lenders that look into your credit score, they are doing this to know how good you are when it comes to managing money. If you can’t manage your finances, the chances of you mismanaging your business finances will be pretty high too.

Missing Collateral

Again, you have to remember that banks are businesses—giving money to people and getting it back with a profit is their business. Banks require collateral to motivate (or compel) a business owner to return the loan amount. In most cases, collateral is not a problem for large businesses.

The collateral serves as a security for the bank and a way to ensure that they get the loan amount back should the business owner default. On the other hand, small businesses don’t have enough assets to put down as collateral to secure a loan from a bank. The missing collateral is often the reason why banks reject loan applications for small businesses.

Reason for the Loan

The bank won’t approve your loan just because you need it. Lending institutions want you to give them solid reasons for why you need the loan. You would want to show them that your loan amount is going to be an investment in your business and not just an expense.

If you are going to buy new furniture for your office with the loan amount, the chances are that the bank will refuse to give you the loan. However, if you have a strong business plan and a pre-planned marketing campaign that you want to support the loan, a bank will be more than willing to help you out.

But Banks Aren’t the Only Option

The detail that’s crucial for small business owners here is that banks are not the only institutions that can lend to small businesses. You have other lending entities from which you can seek help. For instance, there are online platforms where small business and startup owners can get in touch with investors to get the investment they need.

Small business owners can use such a platform to showcase their idea, business plan, the marketing strategies and the team behind the project to get the attention of the investors. They can get the type of loan that best suits their needs.

If an investor likes your idea and is passionate about it, they might even forward the loan at extremely flexible terms. Keep in mind that such a network gives you access to angel investors—the type of investors that can help a startup turn into an established business without demanding too much equity share in the company. However, you have to be sure that you create a powerful business plan, have a strong team and a compelling pitch to win their trust.

Yes, there can be a variety of reasons why banks reject loan applications from small businesses, but that should not mean the end of everything. With online platforms helping business owners connect with investors, obtaining the right loan is not such a challenging task after all. If your business is in its starting phase, be sure to make obtaining the right loan a priority. Last but not least, it is how you manage your funds that decide the fate of your business, not just the loan itself.

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