If you are the entrepreneur of a start-up and you realize you can no longer fund all the projects your company needs, you may seek for external funding for your business. This can come from many parts such as angel investors, banks, venture capitalists, private investors. Raising external funds can help you grow your company and avoid going out of business. But the procedure of raising capital is sometimes difficult and, if you are not an expert on doing it, you should ask for some external advice.
Click here to download your professional business plan template <==== Here are just a few tips about mistakes to avoid when running a start-up company:
- DonΓÇÖt ever work without a business plan. Even if it may seem boring and complicated, business plans help you stay organized and can help you plan in advance the needs of your company. It will be difficult, if not impossible, to make your company grow unless using a detailed business plan. By organizing and planning in advance, you will be able to see if your company will face financial problems and try to solve them before they become chronicle. Most small businesses dye because they do not estimate these needs before they occur. If you find yourself looking for external funds when your business is already in deep need of capital, you may find yourself confronted with loosing your business. Obtaining funds is not an easy thing to accomplish, it can take months and months, and you may need to apply to several types of investors before finding the person who is willing to invest in your company. So, donΓÇÖt wait till the pressure pushes on your company, but start applying for funds now if you know that your company will not be able to continue to live on its own. The way in which you can find out whether you are in such a situation is by writing your business plan.
- When submitting a proposal to an investor, make sure not to send him the entire business plan, but just the executive summary. Imagine that investors receive thousands of applications throughout the year. They will not have the nerves and the curiosity to read an entire business plan before getting to know you. After they show interest in the executive summary of your business plan, you will have the chance of going into the pitch and explaining your idea and your possibilities of making your idea come true and gain money. This shall be the moment for submitting an entire business plan.
- DonΓÇÖt act as if you did not know which the next step should be. This shows a lack of confidence and of perspective and will make investors drop your offer. Thus, make sure to request a meeting or a call for your next step when you submit the executive summary of your business plan.
- Make sure that investors will not be the ones to return your call. After letting several days go through from your submission of the executive summary, make sure to follow up on it and find out if you have been selected for a pitch or not. Most investors find that commitment and trust can be guaranteed by you following up.
Click here to download your professional business plan template <==== So, if you own a company and you are looking for funding, these are just a few details not to ignore when turning towards investors. Make sure to have a fine written business plan in order to be able to plan in advance the needs of your company and in order to be able to persuade investors of the necessity of investing in your company.