By | Samantha Higgins
Starting your own business is an exciting proposition, but you need to develop an innovative idea. You also need to secure the necessary funding to make your dream a reality. Most startups fail to progress because they don’t have the proper financial backing, so it’s important to get this aspect of your business plan right from the beginning. Therefore, you need a solid foundation to fund your new business, including the following:
1. A Well-Written Business Plan To Secure Funding From Potential Investors
Your business plan should outline your company’s goals, strategies, and how you plan to achieve them. It should also include financial projections for the next three to five years.
2. Find the Right Funding Platform for Your Business
Several funding platforms are available to entrepreneurs, each with its benefits and drawbacks. It’s essential to research and choose the one that’s right for your business. Some of the most popular options include:
- Kickstarter: It’s one of the most popular crowdfunding platforms, ideal for businesses with a product or service shipped to backers.
- Indiegogo: The platform offers more flexibility than Kickstarter, including the ability to keep your funds even if you don’t reach your goal.
- AngelList: It’s an excellent place to start if you’re looking for venture capital. It connects startups with potential investors.
- SBA Small Business Loans: The Small Business Administration offers several loan programs for businesses, including 7(a) and 504 loans.
- Local banks: Don’t forget to explore funding options from your local bank or credit union. They may be more willing to work with you if you have a solid business plan and good personal credit.
3. Get Your Paperwork in Order
Before approaching potential investors, you’ll need to have your business’ paperwork in order, including everything from your business license and tax information to your articles of incorporation.
Having this documentation ready will make the funding process more manageable and show investors that you’re serious about your business and that you’re organized.
4. Create a Pitch Deck
Investors want to know what your business is all about, and a pitch deck is a perfect way to introduce them to your company. A pitch deck is a slideshow presentation that tells the story of your business, from its origins and mission to its current state and future goals.
Once you have a draft of your pitch deck, be sure to have someone else review it to ensure it’s clear, concise, and free of typos or other errors. You can contact an expert to create a pitch deck from the comfort of your own home.
5. Develop a Financial Model in Line With Modern Technology
You should create a detailed business plan that considers all the costs associated with starting and running your business, from product development to marketing to overhead. It should also include clearly understanding your target market and reaching them.
Working with a professional in investment technology will help you create a financial model that gives investors the confidence they need to invest in your new business. The experts will also be able to help you find the right funding platform to get your business off the ground.
6. Get Comfortable With Financial Regulation and Reporting
It’s essential to keep your business compliant and running smoothly. For this reason, you may want to consult an accountant or financial advisor to ensure you’re on the right track. Failure to comply with financial regulations can lead to hefty fines and, in some cases, a jail term.
7. Have a Plan for Managing Cash Flow
One of the most important things you can do when starting a new business is to have a plan for managing your cash flow. It means clearly understanding how much money you will need to keep your business running, how much you can realistically bring in each month, and where you’ll get extra funds. Having a rock-solid plan will help you avoid cash flow problems down the road.
Wrapping Up
The above guide is an excellent stepping-stone for new investors interested in funding a new business. However, as with any investment decision, it’s important to consult a financial advisor to ensure that the chosen strategy is suitable for your circumstances. Remember, the key is to remain diversified and always to have a backup plan. By following the above tips, you’ll be in good shape to make a sound investment decision and secure the funding your new business needs.
