You have an idea that excites you…
You’ve talked to friends and family, and you’re even thinking about the possibility of quitting your job to become an entrepreneur. You are about to establish your company, but you need to achieve success with capital. You cannot invest all the money yourself.
Your natural inclination is to go out and seek funding as quickly as possible to take advantage of the momentum of your business. That level of passion and enthusiasm is admirable, but if you start looking for financing before you are ready, you could waste time and become disappointed.
Before seeking financing, either by an angel investor, venture capital, or platform crowdfunding, you should make sure you meet the following requirements.
Have a complete business plan
This is the first item on the list because it is by far the most important. Without a business plan, you cannot have a business. It is the foundation on which your company must be based. You can have multiple points that will list below, but the important thing is to present a summary of what your business and how you plan to make money with it.
This is the verifiable information that demonstrates the validity of your idea. Without it, your concept can only be good in theory. You may have to pay for this information or do research yourself, but you need a real number based to meet your growth potential.
This should be a natural part of your business plan, so you should not underestimate the level of detail that some investors require in this section. You need spreadsheets with projected costs, acquisitions, profit margins, growth rates, and payback time. This is proof that your business actually can make money.
Plans for one, three and five years
Do not focus exclusively on how to start a business. You need to project what growth in the early years. Most investors seek long-term solutions.
Market research must prove that there is a theoretical customer base for your idea, but potential consumers move you toward financing. Investors are more interested in your product or service if you can gather several testimonies from prototype customers.
You also need to make sure you can personally handle the early growth of your business. It’s okay if you have industry experience, but if you’re new, you should be sure to receive the necessary training. Study and prepare.
Potential investors like when you yourself have invested your business. Gather some money from your savings and recruit your family and friends to show investors that you already have some financial support.
Typically, your brand must market your business before financing. However, a strong brand can sell the potential and character of your business. It is a demonstration of identity that can help present your idea.
Before leaving to seek financing, you need to know exactly how much money you need and why. There is a big difference between saying, “I need money for my idea,” and, “I need £4,000 for equipment, £1,000 for marketing and £2,000 for the first batch of products.” The second idea shows a plan that you know exactly where the money will go.
Last but not least, you must have a clear idea of when participants could expect a return on their investment. For platform crowdfunding, it can mean examples of products or rewards for different levels of investment.
No matter if you need a point or two on the list, make sure you have most of these requirements before leaving to seek financing. If your idea resonates with people, you will have no problem getting the capital you need.
10 Strong Businesses in Economic Crises
I do not want to be alarmist, but even a stable economy may face times of lean. The world is surfing great uncertainties in this area today.
The truth is that real entrepreneurs do not fear changing economic situations. However, they should be more careful when choosing their type of businesses. Constant consumption usually better withstands financial shock during a recession.
Here’s a list of industries and businesses that you can consider.
Most companies built around beer and wine can avoid moments of crisis. The most expensive drinks tend to suffer, but the average price of spirits remains.
This is due to a basic principle: people do not leave a real habit only because the outlook has darkened. If they really like, they will continue watching football with a cold beer. Consider a convenience store or a distributor.
It is much easier to enter the beauty industry than to sell alcohol. When the going gets tough, makeup may encourage many people. No matter what the reason, cosmetics support recessions well. There are many ways to get into the business, from distribution catalogues like Mary Kay or selling products online.
Movie tickets tend to thrive in hard times. It is difficult to compete with large chains, as they have the rights to the most important premieres, but why not consider a room specialising in independent films that combines them with dinner? This can be successful in a small town.
Healthcare is an industry that is very difficult to get into. However, it is also true that the Baby Boomers are nearing retirement and may be a growing market. Look for fresh ideas, but remember to stick to health laws in your country.
Specialised food stores
Today there are many food trends and specialty food stores can become very popular in certain markets. For example, you can create a line of vegan products and sell them online with home delivery.
Sweets and desserts
In the same way that people do not stop drinking because there is an economic crisis, they do not abandon things they like to eat. A few years ago, when the UK was in a sharp economic downturn, cupcakes became popular. You can combine this idea with the former or try sugar-free, vegan, or gluten-free desserts.
When the economy is in lean, people do not buy microwave ovens, refrigerators, or new cars; they repair what they already have. Check items in your local market that are not covered.
Charity Shops and Flea Markets
In the same way that no new things are purchased during recessions, many people visit charity shops or flea markets looking for deals. Look for offers or specialise in retro items.
Funeral services are sought even in the worst financial times. Even in the worst economic crises, there are two certainties: death and taxes.
Good accountants know their way in difficult circumstances. In these times, people seek to preserve every pound they can, while the Treasury seeks to maintain order in taxes. This creates ideal conditions for tax advisory services.