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5 Powerful Tips For Starting A Business

Thousands of people dream about starting a business every day, yet only a very small percentage will ever turn their dream into a reality.

If you follow these 5 important tips then your business idea can get off the ground. Not only that, it can also succeed and become a sustainable venture for many years to come.

1. Get your head out of the clouds.

The first important lesson when considering a new business venture is to be realistic. Whether you are wanting to open a shop or an online venture you must be realistic. Without a realistic approach you are likely to fail. Far too many businesses fail in their first 3 years simply due to unwarranted expectations. Business owners expect their business to flourish quickly instead of having the patience to gradully build their brand and company.

You need to ask some serious questions before you start your business. Will it work? How much money do I need to get it started? What are the business risks? How much do i need to earn to survive? You must consider these questions carefully. If the responses are positive, go for it!

2. Market research.

You must carry out lots of market research before you start your first business. You do not have to pay a company to do it for you, you can do it yourself. Find out who your target customers are and ask them if they would be interested in your product or service. Avoid asking friends or family relatives as they are likely to tell you what you want to hear, as opposed to some truthful and honest feedback.

3. Don’t borrow money from a bank.

Unless you are absolutely 100% certain you have the next big thing, avoid the banks. Try instead borrowing from friends and family but make sure you limit the risks and the amount you borrow.

4. Avoid flash cars and fancy offices.

When I started my first business I spent the first 3 years operating from my cellar. This was great as it allowed me to operate with very low overheads. Far too many business start-ups get flash cars and nice offices when they really do not need them. If you do buy a flash car, pay cash for it!

5. Be patient.

Don’t rush your business. It must be an enjoyable experience. When I first started my business I wanted it to be huge as soon as possible; this as a mistake. I have now been going for 7 years and it is a successful venture and very profitable. I put the success to eventually realising that all good things come to those who wait. Be patient, be meticulous and be very careful who you work with!

By following the above 5 tips your business will be certain to become a sustainable venture.

Angel Investors and Small Business Capital

Many people that have issues with obtaining capital from traditional funding sources often seek the assistance of an angel investor or other outside funding source. One of the best benefits of working with this type of capital source is that you have very little online if your business does not go as planned. This primarily due to the fact that angel investors, private equity groups, and angel investors do not require that you provide a personal guarantee as it relates to the investment that they make into your small business. However, in exchange for not having to place you personal assets on the line, you will be required to give up a significant portion of your business to a third party. These third parties, in many instances, may be able to take control of your business at any time if you do not perform to the standards set forth in the investment contract.

As it relates to your agreement with a private investor, you are going to need to have well defined milestones in place that allow you and your private funding source to understand what is expected as it relates to profitability, a positive cash flow, and the sale of the business at a determined time. We recommend that when you are presenting your business to a third party private investor that you have a defined and reasonable strategy as to how your business will grow as it relates to your business operations. You and your appropriate counsel can develop this methodology directly within your business plan. Additionally, it should be noted that your milestone documentation can be provided as a separate document that will go into both your business plan as well as the investment contract that you intend to have with a private investor.

In closing, angel investors are a great way to finance a small business especially if it does not meet the requirements set forth by a bank or the Small Business Administration. However, it is important to note that there a substantial number of issues that come when you work with an outside or private funding source. As mentioned above, you are going to need to provide both equity and control to these investors. As such, you should make sure that you are appropriately seeking this capital because you have a business concept or existing business that is in need of capital for expansion purposes. Your ability to obtain this capital will ultimately be based on the economic viability of your business.