January 16, 2012
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Joshua Hagg
When I started my own business I had essentially no capital. I had left a decent-paying job because I was fed up with the lack of appreciation and advancement at the company.
I knew that one of the best ways to meet my personal financial goals was to strike out on my own. I was going to take the world by storm and become the best payroll-service provider in the region. Did I mention I was broke?
This theme plays out in the United States every day. With a great idea, enthusiasm, the ability to create revenue and a solid strategy, your fledgling business will be the toast of the industry. But not without the proper capitalization, it won’t.
Marrying an idea with money is the age-old problem that plagues startups. In today’s economy, startup capital is even harder to come by. You can defy the odds and move your idea onto the fast track for funding.
When I was 23, I did not know much about how business operates. I met my business partner and financier the old-fashioned way. I found him in the street. (No, not literally.) I sold him payroll services while cold-calling for my previous employer. We got along well, he appeared to be well-heeled, and he had a thriving business.
When I struck out on my own, I presented him with my business plan. We made an agreement: He would lend the company the money we needed and we would be partners. I didn't ask anyone else.
I landed my investor right out of the gate, but that's not common for people trying to capitalize a new business. Most people scrape together what they can, begging and borrowing from relatives and friends. They search high and low for the investment dollars to make their vision a reality.
Whether it's $10,000 or $10,000,000, raising money is hard. It’s even harder when your business is new and untested. It’s not surprising when you think of the risk an investor takes in a new enterprise.
So, how do you improve your odds to get the cash you need? Here are a few tips that will help the process along.
Have a solid business plan
Make sure that your plan describes your product, your customers and the need in your market. Address the structure of your company and any members of your team. Research your competitors, and make sure the plan lays out why your product is better positioned to sell than others.
Financial projections help you demonstrate that you understand the business model and your revenue stream. But keep it simple and focus on the big picture.
Make your pitch matter
Remember, a strong first impression is unbelievably important. Go over all the details. Know your business plan in and out, and practice in front of friends. Most often the decision maker or venture capitalist is there with colleagues. They are looking for personality, enthusiasm, confidence, intelligence and more. Be ready to wow your audience.
Know your customer demographic
Do your research well in advance. Who will buy your product? How big is this market? Do your customers have the purchasing power for your product? Once the company takes off, who will want to buy your company? Don’t lose sight of the big picture and go in prepared.
Have due-diligence materials ready
Make sure that you’ve got a file handy with projections, operational stats and any legal documents that you may need. Impress your potential investors with the level of understanding and preparation. It will grab their attention and keep it.
Remember, it won't be easy to find the necessary startup capital, but you can help yourself by making sure that you are 100 percent prepared. Make sure you research every possible avenue for funding.
Check out Kickstarter, where entrepreneurs can submit their ideas and funding requirements. Interested investors and sponsors can then connect with ideas that they want to support. This site may or may not be a good fit for you, but the point is be creative when looking for funding. You never know where you’ll find an open door.
Check your balance, review recent transactions and pay your bill on the go.
Joshua Hagg 2 months ago
I had a friend that was looking for funding for his business, and it was a "Start Up", so I guess After a few weeks later I called just to see how it went… With sound of Excitement, and Relief He said; I Got Approved, and Funded!!! lol I was Happy for him, but shocked, because you do not here that as often as you once did. Now I can't say your going to have the same outcome, but here is the link to the company website; http://www.businessfinancestore.com/newfunding/index.php?id=1805 that my Good Friend used to get funded for his "Start Up business"If it's anything I learned during these hard economic times is that, "In Business You Start Over Until You Don't Have To". Please Reply back and, let me know how it goes, Good Luck :)