When you first think of a business idea, something that makes sense, something that you would enjoy doing, something that could be quite lucrative it is easy to get ahead of yourself. You sit there, thinking about all of the possibilities and the adventures that this new business could lead to after all it can be thrilling to hit on an exciting and thrilling business opportunity. However, once you come back to reality, there are a lot of steps that you need to take in order to get from daydreaming about your fantastic idea and making it a reality.
Are Your Business Model and Your Business Plan Ready?
There are two things that you have to have in place before going out to find funding for your business, your business model, and your business plan. Your business plan will explain in detail how your business will be legally structured, and how your management team will be organised. It will break down how what kinds of equipment is necessary and how you plan on structuring your staffing.
Have Your Financial Plan in Place
It doesn’t matter if you are bank for a loan, setting up a go fund me page or making a pitch to a potential investor your potential financier will want to see how you plan on using the money that you are asking for. Sorry, but you can’t merely ask for money as an entrepreneur – you need to not only know exactly how much money is required to start up your business, but you also need to know how you would use it. After all, if you have poor financial planning or worse no financial planning, you will have an incredibly tricky time convincing potential investors to take you seriously.
Can You be Trusted?
Lenders will want to know that they can trust you to use the money that they give you in the most productive ways. This means being able to show them how you have made it as far as you have. How did you fund getting your beta app created? What was your cash flow like? How did you finance your prototype? What did it cost?
Remember that investors will not only be wondering about your business but also about you. They will want to know that they can trust you with their hard earned money.
If after reading this list you feel confident in your business and you are prepared to seek out financing, remember that the more details and answers you can provide the better. Also, if you do not receive funding from the first investor or bank that you meet with remember that part of owning a business is to be resilient and that just because one investor turned you down, there are plenty of others who might just say yes.