Start with a plan!
Running a business demands many skills---marketing, accounting, management, etc. The most difficult part is entering the industry, and the start-up stage involves persuading people and organizations to offer financing.
An entrepreneur needs a strong business plan to obtain financial support for the enterprise. The business plan must show that you have a clear vision for your business and that you are able to respond to the challenges you may meet. Show reasonable expectations of costs and revenue, an understanding of your industry and market, and a niche for your product.
Instructions
The Plan
1. Show that you have a deep understanding of the industry you are about to enter, its size and complexity, and identify potential competitors. Present a thorough portrait of the field, and identifying potential competitors is particularly important.
2. Clearly define the market fro the product. For a consumer product, the businessman must show the demographics and habits of his target population. For a business product, he needs to describe the target industry as well as his own.
3. Demonstrate that a new product will be able to claim a quality that differentiates it from competitors. Without this, the product won't be able to compete with established brands that the market is already familiar with.
Pricing is an element of the product---a good sold at a lower price than comparable goods is a new product. It may define the product's niche.
4. Your plan needs to be promoted to reach the market. It must be clear how the brand is defined, and advertising channels must suit the target audience.
The opening of a new business is a good opportunity for publicity, or free promotion. The business owner should be able to show in his business plan that he knows exploit the chance.
5. Create a budget for the first year, and a longer-term budget for the first five years. Financing should include your own investment, raised investment and debt.
Although the business plan needs to show that the owner anticipates negative events, the budget should also plan for positive outcomes.
The Audience
6. Approach banks for loans. Present a strong credit rating and a projected cash flow that will allow you to repay the debt.
7. Network to find individual investors. Anyone familiar with the industry should be approached with the business plan. The wise entrepreneur will ask for advice before he asks for backing.
8. Approach angel investors and venture capital firms on your second round of funding. They are generally interested in established businesses.
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