5 Keys to Raising Capital for Your New Business Idea

Learning how to raise capital for your business idea is often difficult for many otherwise very capable would be entrepreneurs. Raising finance, be it from a bank, a venture capital firm or a business angel, has a lot to do with being able to sell your business idea, and less about how good that idea actually is. The best business idea can get nowhere if you cannot convince your prospective investors of its potential as an investment and your ability as a business owner of making it a success. You should keep the following key points in mind when trying to raise capital for your new business idea.

Prepare a business plan

Writing a business plan is often a lot of work and distracts you from doing what you want to do, which is running your business. But you won’t get any funding without a solid written business plan. Telling an investor or your bank contact that they should give you money because you had a great idea is just not going to cut it. A business plan will explain exactly what you plan on doing with that money, why you need it and real numbers proving your business idea potential. Among other things, you’ll need to be able to prove that you know your audience and the size of the market you plan on targeting, your marketing plans, your expected cashflow for the first few years and how will you deal with risks such as another competitor entering the market. If you are unsure about how to write a good business plan you can also hire a consultant to help you prepare it, but make sure you know exactly what’s in it, since the consultant won’t be with you when talking to the potential investors.

Practice your pitch

Looking for investment is like selling your business idea to somebody who knows a lot about what makes a good, profitable business. While a good business plan is the basis for your pitch, you will still need to deliver it the right way. It’s worth investigating your potential investors, and adapting your pitch to that information. For example, a bank is often conservative and would be more interested in you showcasing how your business idea is a safe bet and has a solid base, without extravagant expenses or high risk taking. However, an investor with an existing portfolio of cutting edge technological business may be more interested in listening to how your business is highly innovative and will use the money to create the next big thing online. Do not go into any meeting with your investors without researching all you can about them and their style, since they will have no doubt researched you to see if you, as a person and a businessman, are likely to succeed.

Plan for threats and weaknesses

Remember when at job interviews people asked you to name your weak points? Your investors are going to do exactly the same about your business idea. While it’s clear that you wouldn’t be asking for investment if you didn’t believe your business idea has a high potential for success, you should also be aware of what things could make it fail, and be able to plan for it. Do not say “Nothing can go wrong, I have everything covered” because at best you’ll get a reality check from the investors about the many things you had not considered, before politely being shown the door. Being secure of yourself is great, but realism is highly appreciated in business.

Know your USP

What makes your business idea unique, and so makes people choose you over anybody else to buy from? Your unique selling point, or USP, will be key to your marketing strategy since it’s the reason why people will buy from you. A generic business with no unique selling point is not likely to make venture investors interested, because if anybody can do it, it’s probably not going to be very profitable. Investors want a high return on investment, and that means that your business should grow and not just be good enough for you to make a living. On the other hand, a bank may be less demanding with your uniqueness, as long as you are using a proven business model on a niche that has room for new players, but a bank knows that they’ll get their payment through your loan interest so they are satisfied with you just breaking even and paying your loan.

Show that you the right person to lead your business

This is another challenging issue when trying to get finance, and a question that few investors will ask you directly so you need to show it by your actions and your sales pitch. Some people are great at having ideas, but are very bad at making those ideas into a real business and managing the day to day of said business. As a business owner, you’ll need many skills that aren’t directly related to your business core idea. Even if you are technically the best developer in the world, and the person who can best implement your idea, you may not be the right person to actually manage it and many investors will notice that unfavourably. Make sure you come across as a savvy businessperson, and not just a great inventor or a proficient salesman.

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How to Move on When Business Ideas Don’t Work: Some Business Solutions Don’t Seem Right

I discover myself coming up with something new all of the time. Most of my business solutions revolve around my center mission, but lately I followed somebody who I trusted into one of those business ideas that seemed “in line” with my mission at first, but as time passed, it just didn’t feel suitable. I wasn’t enjoying what I was doing and lost heart in it completely. This is a partnership that just didn’t work for me. Has anything like this happened to you before?

How invested are you in your own company solutions?

When you get into these circumstances, there is always some amount of investment. Not simply did I invest money, but I was emotionally invested at the same time. As usual with all of my hair-brained business ideas, I put my heart and soul into it. Does this scenario sound familiar? I couldn’t see the forest for the trees; it’s practically like being in love. You know, like when you can’t see anything wrong with the other person you’re in love with because you are “feeling the love”. This situation has happened to me a handful of times since being in business since 1995. So, I am now really able to hone in on the moment this starts happening. Even after all of these many years in business and dealing with this situation over and over, I continue to maintain an open mind to business ideas, but I have become better at figuring out the moment they aren’t going to perform.

This particular time around, it literally took 2 weeks until I started to become acutely conscious that the business solution was moving in a direction that I didn’t like. The older I get, the better I become at learning quickly the moment a business idea is just not likely to work out. It’s funny how being an entrepreneur involves “gut feelings”. I know entrepreneurs that pick up on this immediately while other people pick up on those feelings over time. I really feel it’s an issue of practical experience.

Listed below are a few things that I’ve learned that can help you move on from business solutions that don’t work.

Revisit or re-read your small business mission. Frequently you’ll find out that business ideas that seemed suitable to you at the time are genuinely not in line with your business model.

Remain open-minded even if you may be emotionally invested. You have to recognize difficulties as they arise as well as being conscious if it’s heading in the wrong direction.

Listen to that inner voice. I know that seems odd, but most entrepreneurs typically know when there’s a red flag in business. So, don’t ignore it. I’ve got a very dear friend that did ignore these voices and ended up losing everything to the point of bankruptcy.

Know when problems appear if they can be corrected in a way that makes your life better or not. Business ideas shouldn’t be so problematic that you can’t enjoy living. So, if you see that one of your business ideas which has one problem after the other, it’s likely not really worth the headache.

Some business ideas go against You, Inc.

I recall there was a time for me when all I thought about was the financial element of the new business ideas that I started. I only stepped out and refocused after a period of time when the money was not what I believed it could be and wasn’t really worth my time. As time progressed, I’ve learned that money is an important aspect to an entrepreneur. Ideally, that money is used for reinvesting into business ideas that do work. Having said that, realizing when the business ideas don’t make you satisfied may be the ideal way to determine when to move on. Money doesn’t particularly have anything to do with happiness to that degree. This is a widespread misconception about business entrepreneurs. It’s not simply all about the money.

My advice is to stay real to who you are as a person along with your core values. This will enable you to avoid business ideas that don’t work in the first place. Knowing your mission and values further helps with knowing when to move on and let go of business ideas that don’t work.

To your success,

Sharon Koenig

The Prosperous Lady

If you are wanting to start an online business, here are some tips on finding business ideas [http://www.theprosperitypeople.com/make-money-online/how-to-start-your-online-business-steps-to-start-an-online-business-create-your-niche-site/] to get you started. If you already have a business, I hope that this article has been helpful to you. It is often difficult to learn when it’s time for you to move on from a business idea, especially when you’re heavily invested in that particular idea. Whether your business is a traditional “brick and mortar” or an on-line business, get further business ideas as well as strategies for operating your business by visiting The Prosperity People Blog

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Tips On Assessing Business Ideas That You Have Generated For Your Online Home Business

Feasible business ideas are evaluated by analyzing the demand for the product or service, weighing the available resources and looking at the skills, talents and knowledge you have. The process of assessing your ideas involves reflecting on all the business ideas and income generating activities you have generated and zero down to three most promising ideas, looking critically at the advantages and disadvantages and basing on your experience and judgment.

To successfully assess the three business ideas that you have selected, you should use a table to tally your results for each business idea and categorize them into columns of skill and competences, available equipment, access to raw materials, financial resources and sufficient demand. Then use the following questions to guide you:

1. Which of these business ideas matches my strengths?

2. Which idea(s) can help me to achieve my personal goals?

3. Which resources do I need in order to realize the business idea?

4. Which gap am I feeling? Is it a need or a problem?

5. Are there people out there who will buy my product or pay for my service?

How to assess your business ideas basing on your skills, talents, knowledge and competencies

First of all, you have to assess the extent to which you possess the required skills (manual, personal, social, technical). If you do not have the required skills, you should think about other options like finding someone else with the skills to help you.

If you have to find someone else with the skills, then you should ask yourself further whether you will be able to afford to pay for this person contributing to your business. Remember that additional costs from employing someone might mean a reduction in your profit.

If you find out that the required skill can be performed by you without any problem, that idea should receive a high ranking. But if you discover that your skill level is low or nonexistent as, far as the skill required is concerned, then the idea should be rated low.

Secondly, you have to look at the future of the business idea by asking yourself which other secondary skills you have to acquire to fulfill your business goals. And how are you going to get them?

How to assess your business ideas in relation to the available resources

By resources, I mean mainly financial resources, human resources and other inputs like raw materials. You have to think about the start-up and working capital. The good thing online businesses do not require huge sums of money to start. You can start humbly and grow your business.

However, you should take note of the financial resources you need to invest in buying equipment (computer) and start-up expenses. You need to think about having cash that you will use to meet the day-to-day requirements of running your business. A positive rating only applies when you are able to have all the money required to start the business. And a very low rating implies that you cannot have anything to start the business.

Secondly, you have to focus on other related inputs like equipment and raw materials (e.g. software). When using certain equipment, you need to possess certain skills. Additionally, you need to look at the availability of the equipment, now and in future, and the challenges you may encounter when using it.

Raw materials are what you use to produce the product. A good business should have a steady inflow of raw materials and their availability is so important. If they are readily available, then give a high rating. But if there are problems or seasonal fluctuations in availability and price, then the rating is low.

Assessing your business ideas basing on the demand for the product or service

Here you should focus on your unique selling proposition, something special about the idea that can make it more attractive. The demand for a product or service means the extent to which customers want it. You have to take the level of competition in the marketplace. The demand of a product or service is also related to the ability of the targeted customers to buy. They may have the need for the product or service but when they have no money to pay for it and this means the actual demand is low.

Having gone through the whole process, you will then select one business idea that has received the highest number of scores and note down the points using the points below:

1. What’s the idea and what’s its status

2. What market does the business idea address? Are there any customer feedback or testimonials?

3. Why do you believe you have the advantage in the marketplace in relation to the market needs?

4. What’s the competition in the marketplace?

5. Who is the team that is going to make the business succeed?

6. What’s your long-term vision for your business and the projected returns on investment?

7. What’s the estimated total funding required executing the business plan?

8. What amount of financing are you seeking initially?

Finally, a proper write-up of the analysis of your business idea will be very important for you to further develop a business plan and to convey all the essential information in a more clear and concise manner. It enables you to communicate in a likeable, passionate and credible way to capture the attention of others, especially the people you want to support you as you start your business.

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Small Business Ideas and Changing the World

Great small businesses are started by great small business ideas. Look into any business anywhere and you will find somewhere in the development there was an idea by someone, who did something about it, started a business, built the business, and benefitted others by it.

I am an “idea” guy. Why? Because ideas are the genesis of all things, and surely all things pertaining to business. If the idea is good enough, and the individual acting on the idea is good enough, the combination of idea and action will shake the world.

Perhaps one of the most rewarding things for me to do is to read stories about people who achieved business success. Every successful business came from a person, man or woman, with an idea that they would grow into a concept, and that concept was developed into a product or service, and that product or service created a business.

There are countless inspiring stories of how businesses were started and developed. Most of them are fascinating reads because they help to nurture in my mind the power of small business ideas, and how those ideas can effect the world.

One of my favorites is the story of Madam C J Walker. She was born in 1867 in the deep South, a time and place of extreme discrimination and disadvantage for African Americans and women. Both her parents were slaves, and of her five siblings, she was the first born free.

But her difficulties in life did not end there. Both of her parents died, and when she was only twenty years of age her husband also died, leaving her with a two year old daughter. She moved to another state to be with her brothers, and there began to develop an idea that had been spawned in her years before…

Madam C J Walker had married again, this time well into her thirties, when she began experimenting with a product to deal with hair loss and scalp issues common to women of the time. Eventually, fueled by her own passion and ideas, she developed several products of her own design and began travelling with her husband to sell them throughout the United States. Within a few years she had built a college to train hair culturists and even her own manufacturing facility to produce her products.

Madam C J Walker became the first self made woman millionaire, and this with multiple and substantial disadvantages. Her story is a testament not only to overcoming tremendous odds to achievement, but the power of an idea. Her small business ideas, bolstered by her own personal strength and ingenuity, blossomed into a massive benefit for millions of women of her time and beyond.

Most people have great ideas. Perhaps there is nothing more common than great ideas. The problem is not lack of ideas; it’s excuses people offer not to act on them.

The entire soft drink empire came from a single idea, formed into a recipe, and scratched onto a piece of paper and tucked away in someone’s pocket. And that idea would have remained a mere “idea” forever, had not someone took the chance and acted on it to see what would happen. They did, and the world is different for it.

To create a successful business, there must be an idea, but not just any idea. It has to be a unique, never thought-of or acted-on idea, one that fills a need or a desire of many people, and can be developed and produced and sold.

So how to approach small business ideas to bring them to fruition? Here are few questions that should be considered:

1. Is the idea new? If it already has been done, or is commonly known, it probably isn’t a novel idea worth pursuing, unless the idea is a completely new twist on an existing one, that would dramatically improve it.

2. Is the idea reasonable? Here goes the logical standard: an idea is only as good as it is reasonable or possible. Yes, it would be great to have a product that, say, makes the front lawn never grow higher than the desired length, while remaining green and healthy. But is this possible, or even practical? There are zillions of ideas out there and plenty of them get developed to a point but never see the light of day because they are not reasonable: the cost or hassle to produce them is far greater than the benefit.

3. Is the idea in my field of interest or knowledge? Most people are good at something and have a specific area of interest. To develop small business ideas effectively it stands to reason the developer should understand the product or at least have serious interest in it. A small business stemming from a person’s passion is the fastest and surest way to success.

To build the enterprise or business or organization that will change the world always starts with an idea. Then ideas are added to ideas with passion and determination and intelligence. And what results can be life changing, not only for the entrepreneur, but for people everywhere.

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Ideation – Where Business Ideas Come From

Ideation is the creative process of generating, developing, and communicating new business ideas. When we plan to launch a new business, we either leverage an existing concept or we develop our own unique idea. The same applies to growing an existing business. I have always struggled with determining which is harder – finding the idea or executing on it.

Sometimes ideas are easy enough to conjure, and the hard part is deciding if it’s good enough as the basis for developing a profitable business. If you have what you believe is a “great idea”, the next challenge is to prove or test that it will translate into a successful venture.

Then there are times when a viable idea is the hardest thing to find. It may seem like all the good ideas are taken, and you are left on the sidelines with the resources and desire to start or grow a business but without a great idea. The ideation process can take a day or it can take years, and as with the creative process, it’s usually unproductive to rush it. Aside from the other typical barriers of resources (money and people), the lack of a “good idea” is often what keeps people from taking action on their dream of becoming their own boss.

Creating a new business starts with the idea. The process of developing that idea, and your business concept, may perhaps include some level of testing through prototyping and iteration. During these early phases your idea will undoubtedly evolve and may even morph into something entirely different. There are three basic categories for business ideas, and considering these categories can help with sparking that next great brainchild or validating your existing one:

New – a new invention or business idea. Examples may include the Segway, Virtual Reality and other product inventions. This is the most difficult category for new business ideas. There are very few truly and completely new ideas. By “new” I mean something that absolutely does not currently nor in the past exist in any way. It’s easy to confuse a new idea with what is really an improvement or disruption of an existing or traditional way of doing something. Truly new and unique ideas are hard to come by, so don’t get paralyzed by thinking this is the only source of viable new ideas.

Improvement – this is the proverbial better mouse trap. Examples include exterior-express car washes (where you stay in the car), Virgin Airlines, LED lighting, and Disney Land. Most small businesses probably fall into this category. You take an existing service or product and you make or deliver it in a better way, either directly or indirectly. You may make it of better quality raw materials, for example, or you may add value to the product or service by including additional services or add-ons.

Disruption – a new and revolutionary way of doing something. Examples include Uber, AirBnB, and Amazon. Our modern interconnected world – supported and made possible by the internet – now allows us to completely reinvent, transform and disrupt entire industries. The internet and other technologies are not the only way to execute on a disruptive business idea, but it has certainly accelerated our ability to do so.

Where do great ideas come from? Sources of ideas can include reading, podcasts, art, architecture, personal experiences, travel, conversations, hobbies, borrowing from others, crowd creativity, crowd sourcing, and attempting to solve existing problems in our world. For existing businesses, the best source of ideas is usually your customers. Yet it takes a bit more than just experiencing or reading something to spark your next great idea.

In the article “How to Generate Good Ideas” by Belle Cooper, Steve Jobs is quoted as sharing that creative people are able to “connect experiences they’ve had and synthesize new things.” In his observation, creative people consistently have “had more experiences or they have thought more about their experiences than other people.”

Consciously and objectively experiencing new things will definitely influence and feed your creative abilities, and it’s one of the most productive ways we can continue to develop our ability to generate great ideas.

Does this mean that you have to be creative to generate good business ideas? I believe creativity is certainly one of the main ingredients required for ideation, along with ingenuity and vision. The challenge for many people, however, is that they either have little confidence in their inherent creative abilities or don’t have the courage to express and tap into it. The idea generation process is much like the creative process in that we are putting forth something personal to be judged by others. You must have the courage and confidence to submit ideas that others might think are frivolous or ridiculous. It’s appropriate to remember what George Bernard Shaw wrote: “all great truths begin as blasphemies.”

The ideal process is to identify one or more business ideas, test them, and then continue with developing the idea that has the best possibility for success. Of course, always remember that the true test of an idea’s business viability ultimately rests entirely with the customer. Also remember that if your concept was easy, it would probably have already been done by someone else.

Some questions to ask yourself to help qualify your business idea:

What need does my product or service fill? What problem does it solve
What are the features and benefits of my offering?
What is my competitive advantage? What makes this idea truly unique in my market?
How do my skills and experience fit with my idea?
How will I be able to test and demonstrate it?
What resources will I need to build this idea into a viable business?
Does my idea solve a billion-person problem, or the problem of just a few?
Can I envision myself executing on this concept for the next 5 to 10 years?

Henry Lopez is Co-Founder of Levante Business Group, dedicated to helping aspiring entrepreneurs and small business owners start, run and grow their business.

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