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The Art of Launching a Small Business and Getting It Funded
If you’ve been thinking about starting a business for a while now, you’re not alone. More and more people without previous entrepreneurial experience are deciding to open their own company.
Whether it’s because you want to do something different, have more freedom, make an impact, or make some more money, there’s never been a better time to take the plunge into entrepreneurship. Use these tips from Windmill Insight Solutions to make it happen!
To start your own small business successfully, you’ll need proper planning and research. You’ll want to do this before spending any money on moving forward with your business idea to make sure that you’re headed down the right path. If you have absolutely no prior business experience, you may even consider going back to school to earn a degree in a business field, like marketing or accounting, to help build your confidence for getting started.
The great news is that thanks to the availability of online courses, you can take classes on whatever schedule is convenient for you, so you can continue to work and bring in a paycheck to help pad your startup funds. Knowing how much it’s going to take to start up is important, as underestimating the amount can lead to future business interruptions and possibly even closure — the Office for National Statistics found that just 42.5 percent of UK businesses that opened in 2014 were still in operation five years later.
If you are considering moving to accommodate your home business, you’ll want to first research what you can afford in a new home. Determine how much equity you have in your current home, look into comparable home prices in the area you’re moving to, then use an online mortgage calculator to help assess your price range. Once you’ve narrowed your home search, check out virtual open houses and contact a real estate agent to get the ball rolling.
You’ll need to spend time researching the industry, target consumers, and potential competitors to see if there’s room for your business idea. You also need to establish if your plan is a good match for your skill sets, personality type, and desired lifestyle.
Once you’ve got information on the industry, the consumer groups or niche you’re targeting, and what your product can offer them that they don’t already have, you can start putting together a business plan. This is something that you can either do alone or turn to professional business advisors for help.
Your business plan doesn’t need to be complicated or super detailed. Still, it should include financial estimates (including costs for starting up, operating expenses, what money you will need to grow the company), information on how you’ll market your product or service, sales estimates, as well as a market analysis of the competition.
With a business plan in hand, you can now turn to think about what options you have for financing your business. The optimum type of financing will depend on your business model, available startup capital, how quickly do you expect your business to be profitable, and the fixed-cost investment you need, among others.
As well as the traditional financial institutions that provide small business loans, a form of financing that is becoming more and more popular is crowdfunding. Of course, crowdfunding won’t be suitable for all business ideas. But if you’re selling a product, have a working prototype, and put in the time and effort to build a big bang marketing campaign to get your launch out there, it might be the right choice for you.
Crowdfunding can be a great way to start a business without having a lot of capital or needing external investment. Essentially, your future consumers are funding your first round of production as long as they like the product and you generate enough excitement to get them to commit to buying it if you reach your funding targets.
The Balance Small Business points out that another popular form of financing today is looking for an angel investor. You essentially find someone who has spare cash available in exchange for part of the equity in your company. Angel investors can be friends or family but are often experienced investors themselves. This means that you can also benefit from their knowledge when launching if they act as a mentor. This, of course, means that you lose independence, since you’re giving up part of the ownership of your company in exchange for capital.
With all of the low-risk financing options available today, there’s never been a better time to start your business. Build your knowledge base, make a business plan, and secure your funding, and you could soon be the proud owner of a successful startup!
Thank you to Katie Conroy of AdviceMine for sharing her thoughts with us on this much discussed topic. If you found it useful, or have any suggestions for future posts, please leave a comment.