Everyday, many businesses have been formed to deal with various products such as clothing, Information Technology, computers, jewelry and others. These businesses are commonly referred to as Startups. One of the major problems of startup and why many people fail is the issue of funding. Where does one get funding? How will I use these funds? These are some of the questions that young and budding entrepreneurs face but in this article, we will show you how to get funding for your startup, factors to consider before sourcing for funds, and the steps to getting your startup fundable.This process is as easy as counting one, two, and three, and it is dedicated to all those who are looking for funding.
With so many businesses coming to birth,several factors must be considered in getting funding from various people like venture capitalists or banks that must be kept in mind.
1. What kind of business are you venturing into?
This usually looks like a question that one may answer right at the top of their minds, but it is one that should be really well thought of. Every idea that you are thinking has been thought by someone else. Is your business unique?In what way?How different will it be from companyXYZ?Andwhat new thing are you bringing to the market?
2. What are your potential clients?
“A satisfied customer is the best strategy of all.” -Michael LeBoeuf. Have you identified your potential customers and their needs? Is your product or service fulfilling a certain need, or solving a certain problem? Remember that your customers make your business.
Having answered these questions successfully, how will you get funding? These are the simple steps to make your business ideas become a profitable business.
1. Business Plan
It is very important before securing funding for a business to have a business plan. A business plan is a document that shows a guideline about your business, reason for business existence, goals, and how the business seeks to attain those goals.This is a very important document as it shows potential investors what you plan to do with the money that they intend to give you, and how they will benefit from it. A good business should have the following (not listed in order):
- Mission and Vision for your business
- Potential Clientele
- A well-written budget
- Shares (if any)
- Objective of the business
- Number of employees
2. Human Resource
Human resource is the most important thing for any business. This includes the people that will be working with you in order to achieve the goals. The team that one is working with should be very reliable and goal oriented.
Do you have a website? Are you on social media? These are avenues that show your business has started, and that it has a gone a notch higher to try and create a brand for your business.
If your business deals with software development and focus on mobile apps, it is important to have a prototype that they can use to show potential investors. This will give them a better idea of what your business seeks to do. If you are in the film industry and you seek to start making movies or a trailer of a pilot episode, this will go along with securing funds.
5. Customer Base
As much as it is starting up with a number of customers, a record of sales will play a big role in securing funds. This will show potential investors that despite the little funds that you have to start your business, you get some income, and boost your funds.
6. Personal Investment
Personal investment is all about the funds that one has put into the business and the time that they spend in that business. This is a very good sign for potential investors because they see and know that by risking your own money, they will not be at risk because they see the dedication that you have.
7. Letters of Intent
If your startup is bringing something unique to the market, and “big players” in the market have noticed your product, they may want large quantities from you. Presenting such a document to potential investors shows them that it has already been a recognized business, and as an entrepreneur, you have actually done the footwork and gone out to look for business.
Getting funding for your business is very simple. If one follows the above guidelines, it will be very easy for startups to grow, and it will soon be a very profitable business.