• 10Mar
    Happy African American businessman offering a handshake.

    When you are getting ready to start a business, you have to think about how you will obtain financing. In fact, this is one of the most important parts of your decision and it can be one of the most challenging. There are several ways to obtain financing for a new business or to obtain financing for an existing business. However, you have to think about these things in advance. There are various things to consider when you are thinking about business finance. What type of financing is appropriate for your particular business? Are you aware of crowdfunding? Are angel investors available to you? If so, what is going to be your approach? You have to be well prepared and armed with a good business plan to consider these options.

    The Options

    There are some financing options that require the business owner to relinquish a percentage of full ownership to the investor or funder. Some investors have strict guidelines and limitations before they will consider a loan or investment in someone’s business. There are also some financial investors that will require the borrower to adhere to certain rules and if broken, they will apply substantial consequences financially.

    The Wrong One

    If you have been searching for that business loan and it seems to be elusive to you, then you are not alone. Have you had a rejection when you tried to apply for a business loan? You are still not the only business that has ever been declined. It happens all of the time. Why? Many business owners are not prepared and sometimes, it is because they approach the wrong financial investor or lender. Most banks take a conservative approach to lending and these come with a wide range of requirements, which tend to be stringent and sometimes unnecessary to the normal person. If you are choosing to deal with a bank, you have to provide up to three years of financial statements, collateral, cosigner and the demonstration of business profitability.

    Not All Equal

    Not every business owner is able to meet the stringent requirements and this is especially true for most small businesses since they put so much of their savings into the business. Many of them have little or no collateral to put up. Under such conditions, how does a small business owner able to see financial growth? Let’s take a look at the most common financial issue.

    Outstanding Payment

    For most companies, a payment term has to be offered to the clients, but some clients do not honor those terms. This is one condition that indicates business owners have to wait for up to three months after delivering the product to be paid. This is a problem for many small business owners because there are little resources left to pay expenses while waiting for almost two months to get paid for an invoice. It is an easy thing to overextend yourself financially when you have clients not paying their invoice. In the same way that the client forfeits the agreement to pay, it is the same way that small business owners operate with vendors and suppliers – waiting longer to pay. This is the not the ideal business practice.

    The Bottom Line

    No matter what the issue, small business owners need money to survive the business. You have to be creative when it comes to funding. The first option is asking family members and friends to help financially. When that fails or is exhausted, turn to other means of financing.

  • 03Mar
    business finance (1)

    Most business owners don’t realize the importance of having a pitch and rehearsing it when they are seeking funding for the company. You don’t want to approach an investor and make it seem as if you don’t know what you are talking about. Once you have rehearsed that pitch, it will be like a breeze when delivering it to an investor. It won’t seem as if you are rambling on and catching for straws. You will be taken seriously.

    The Delivery

    It is frustrating for an investor to hear a business owner ask for ten minutes to deliver a pitch and only to find them going on and on for half an hour. You will lose the interest of any investor by doing so. You should have your business plan in hand, just in case the investor asks for it and more importantly, so that they can read it at their leisure once you have completed your pitch. You want to make sure that a powerful pitch is delivered and at the end, the investor should be asking for more information from you in the form of a business plan. In preparing your pitch for business funding, there are some essentials to consider. Let’s take a closer look.

    Your Story Told

    Your pitch should always tell a story and the story must be compelling. That means you will have to engage the investor as soon as you start speaking. Don’t wait until you are in the middle of your story to come to life. Be animated, passionate and excited about the prospect of having a business and receiving funding to make it more successful. With your story, you should be able to address some problems and the solution; altogether.

    The Solution

    You should know the unique value of your product and discuss the solution or solutions it will provide. This segment of your pitch should be brief, simple and concise so that the investor will be able to provide an explanation to others. Stay away from industry buzzwords. Use them only if you know that the investor has some familiarity with your industry.

    Your Credibility

    Build your credibility in the early stages of your presentation. Talk about your successes in business, not necessarily your immediate business venture. You now have the chance to toot your own horn. Try to give a good impression to the investors of your accomplishments so far. This could include strategic business moves, secured contracts, sales figures and various product launches, if any.

    Target Market

    Not all consumers will buy your product or service. You must be marketing to a specific audience. These are your target audience and they usually exist in a specific target market. You should know what that is. Give a realistic answer when asked about your target audience. A target audience should be taken from specific demographics, age group, buying tendencies and location.

    The Competition

    One significant aspect of your pitch is to know your competition. Who are they? What sets you apart from the competition? How is your product and service different? How much more experienced are you in that field or industry? Your pitch should answer all of those questions.