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20 Reasons Why You Need a Business Plan

20 Reasons Why You Need a Business Plan | business plan template | Scoop.it

20 Reasons Why You Need a Business Plan

Written by Pete Kennedy on Wednesday, April 9, 2008

1. To prove that you’re serious about your business. A formal business plan is necessary to show all interested parties -- employees, investors, partners and yourself -- that you are committed to building the business.

2. To establish business milestones. The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you'd certainly share the news that you launched your new website or reached $1M in annual revenues.

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3. To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company's competitive advantages.

4. To better understand your customer. Why do they buy when they buy? Why don’t they when they don't? An in-depth customer analysis is essential to an effective business plan and to a successful business.

5. To enunciate previously unstated assumptions.
The process of actually writing the business plan helps to bring previously "hidden" assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity.

6. To assess the feasibility of your venture. How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture.


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7. To document your revenue model. How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model.

8. To determine your financial needs. Does your business need to raise capital? How much? The business plan creation process helps you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital.

9. To attract investors. A formal business plan is the basis for financing proposals. The business plan answers investors' questions such as: Is there a need for this product/service? What are the financial projections? What is the company's exit strategy?

10. To reduce the risk of pursuing the wrong opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.

11. To force you to research and really know your market. What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace.


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12. To attract employees and a management team. To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals.

13. To plot your course and focus your efforts. The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones.

14. To attract partners. Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To position your brand. Creating the business plan helps to define your company's role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners.

16. To judge the success of your business. A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To reposition your business to deal with changing conditions. For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To document your marketing plan. How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business.

19. To understand and forecast your company’s staffing needs. After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion.

20. To uncover new opportunities. Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business.

 

 

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About Growthink

Since 1999, Growthink's business plan experts have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $2 billion in growth financing.

Need help with your business plan? 

  • Speak with a professional business plan writer today.

  • Or, if you're creating your own PPM, you can save time and money with Growthink's new private placement memorandum template.

 

Dj Baker says

I find this a very simple, yet effective, breakdown of the reasons why a business plan is absolutely essential. From personal experience these 20 reasons our very much the truth. It is also very reassuring to know that there are trustworthy sites out there who do contain valuable information. Much appreciated, Dj
Posted at 5:24 pm
dan says

thanks for the news letter, we are in the air cooling business. using air conditioners. we supply LG units. our major challanges has for the last 6 months been reliable suppliers of LG products at a competitives price. we do not have enough money to qualify as dealers hence we depend on thers, when i read the 20 reasons , i reflected to find out why our clients buy from us , and why others do not. thank you.
Posted at 5:19 am
Sindi says

Thanks for this article. It is indeed a great eye opener for me. Didn't realise there's so much a business plan can reveal about any enterprise.
Posted at 1:49 pm
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Posted at 1:53 am
Suzanne Muusers says

Just found this post. What a great list of reasons to write a business plan. I particularly like: 13. To plot your course and focus your efforts. All too often I meet entrepreneurs who have been running their business for years without a business plan, and their business shows it. Writing a business plan creates the INTENTIONS and structure for success. Thank you, Suzanne
Posted at 11:41 am
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Check this "Review of Growthink's Business Plan Template":

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From A to Z: 200 Essential Resources for Entrepreneurs Building a Business

From A to Z: 200 Essential Resources for Entrepreneurs Building a Business | business plan template | Scoop.it
It is a very long journey from great idea to functioning business but, happily, there is help available every step of the way.

Being an entrepreneur can be difficult. Being an entrepreneur attempting to launch a startup is even more challenging. The good news? You don’t have to go it alone. There are a lot of tools and resources at your fingertips online to help you successfully plan, launch and run your business. And, here are 200 of those essential tools and resources. Read more: click image or title.




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Great resources for entrepreneur. Not much about funding, only crowdfunding. Take a look on my site: www.business-funding-insider.com


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Find A Business Mentor Near You for Free With a Virgin Startup Loan

Find A Business Mentor Near You for Free With a Virgin Startup Loan | business plan template | Scoop.it
With a Virgin Startup loan, you gain access to our network of experienced mentors. If you're interested in finding out who you could be working with, look here!

So, you’ve worked with your business advisor to help develop your idea and business plan until it’s a fundable proposition and you’ve gone through the application process. Now you’ve been approved for your loan. This is when we will hand-pick you a suitable Virgin StartUp Mentor. It’s our job to find a business mentor to match you and your new business.

Our mentors have been there and done it, they’re inspirational, impressive and highly qualified. They’re giving their time away for free to guide you through the difficult start-up phase of the business lifecycle and they are doing so because they genuinely want to support entrepreneurship.

Our business mentors are also carefully selected and better matched with their mentees than any other mentors, meaning that their advice and guidance is directed at the businesses in which it will deliver the biggest impact, the most impressive return on their invested time.

Take a look at just some of the hundreds of Virgin StartUp Mentors that are ready and waiting to support your journey. To see the rest of this article and a list of mentors click on the title or image.




Need funding?

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Marc Kneepkens's insight:

Another great idea from Branson: once we give you money we'll set you up with a mentor. It cuts down the risk for them, plus they have a close look at what you're doing. You will get experienced advice and expert help.

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The 6 Key Components of Writing a Business Plan

The 6 Key Components of Writing a Business Plan | business plan template | Scoop.it
Having prepared a good business plan before starting your venture can often be the difference between startup success and failure.  I am not saying you need a 50 page detailed report, as investors don't typically have the time to read them anymore.

 But, it is more about taking the time to think through the below 6 key components of a preparing a business plan, to make sure you know what you are up against in your industry and have reasonable foresight into where the business is heading in terms of go-to-market strategies and financial returns for the company and its investors. Click on title or image to read the full article.


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Growthink really understands how to create compelling business plans and raise capital, and Growthink's Capital Raising Products succeed in infusing this knowledge.
-John Morris
Managing Director, GKM Ventures,
Board of Governors, Tech Coast Angels



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A business plan is your focus and compass when setting up a successful business. Investors or banks will require it, but even your team and yourself will benefit from having one.

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6 Tough and Timeless Startup Lessons

6 Tough and Timeless Startup Lessons | business plan template | Scoop.it

http://snip.ly/3Zk0

Success requires the confidence to begin and the humilty to listen when trustworthy people tell you what isn't working.

No one is born equipped with the skills to start and run a business. It takes hundreds of misses and trials in order to get to somewhere close to the initial idea that you have envisioned. Understanding the “why” of your idea is necessary and the “how” to go about it is penultimate. Keeping that in mind, here is a little cheat-sheet on five things that you should absolutely consider while you start a company.

1. Write a business plan.

Your business plan is a formal document that lays the foundation of who, what and why your company is. It is a step-by-step guide that will include your company goals, business model, product cycle and the marketing strategies you will use to achieve traction. It is also a window through which your business is shown to investors and financial institutions to raise funds.

However, an overlooked benefit of developing a business plan is that it gives ‘you’: clarity of thought and vision, more than anyone. Before convincing others, you have to convince yourself about the validity of your company and its raison d'être. Only then can you hope to encourage people to help you, work with you and fund you.

Once you have a well thought out business plan it is time to… Read more: http://snip.ly/3Zk0


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"The team at Growthink delivered exceptional quality service in every aspect of their client services. Their staff of professionals were extremely instrumental in fine tuning my creative vision into a well developed business plan."
  James E. Spence, Jr, Founder & CEO
At Bread Boutique

Marc Kneepkens's insight:

The essential business plan, you'll be asked for it when looking for funding.

Good article with several more good points.

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5 Reasons to Write a Business Plan

5 Reasons to Write a Business Plan | business plan template | Scoop.it
There are any number of reasons why you need to create a business plan, including starting a business, seeking funding and more.

In their book Write Your Business Plan, the staff of Entrepreneur Media offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors offer five reasons why someone would want to write a business plan and what they'll use it for.

Anybody beginning or extending a venture that will consume significant resources of money, energy or time and that's expected to return a profit should take the time to draft some kind of business plan.

But there are many reasons to write a business plan, including the following five:

1. You want to start a business.

The classic business plan writer is an entrepreneur seeking funds to help start a new venture. Many great companies had their starts in the form of a plan that was used to convince investors to put up the capital necessary to get them under way.

2. You own an established firm and are seeking help.

Many business plans are written by and for companies that are long past the startup stage but also well short of large-corporation status. These middle-stage enterprises may draft plans to help them find funding for growth. They may feel the need for a written plan to help manage an already rapidly growing business and to convey the mission and prospects of the business to customers, suppliers or other interested parties. A business plan can address the next stage in the life process of a business.

3. You need to determine your objectives.

There are so many options when it comes to starting a business, including the size, location, and, of course, the reason for existence. You'll be able to determine all of these and so many more aspects of business with the help of your business plan. It forces you to think through all of the areas that form the main concept to the smallest details. This way, you don’t find yourself remembering at the last minute that your website still isn't developed or that you still have most of your inventory in a warehouse and no way to ship it.

4. You're trying to predict the future.

It may seem dishonest to say that a business plan can’t predict the future. What are all those projections and forecasts for if they're not attempts to predict the future? The fact is, however, no projection or forecast is really a hard-and-fast prediction of the future. The best you can do is have a plan in which you logically and systematically attempt to show what will happen if a particular scenario occurs. You'll use your research, sales forecasts, market trends and competitive analysis to make well thought-out predictions of how you see your business developing if you're able to follow a specified course. To some extent, you can create your future rather than simply trying to predict it by the decisions you make. For example, you may not have a multimillion-dollar business in ten years if you're trying to start and run a small family business. Your decision on growth would therefore factor into your predictions and the outcome.

5. You want to use it to raise all the money you’ll need.

A business plan can't guarantee that you'll raise all the money you need at any given time, especially during the startup phase. Even if you're successful in finding an investor, odds are good you won’t get quite what you asked for. There may be a big difference in what you have to give up, such as majority ownership or control, to get the funds. Or you may be able to make minor adjustments if you cannot snare as large a chunk of cash as you want.

In a sense, a business plan used for seeking funding is part of a negotiation taking place between you and your prospective financial backers. The part of the plan where you describe your financial needs can be considered your opening bid in this negotiation. In a way, a business plan is an excellent opening bid -- it’s definite, comprehensive and clear.

But you know what happens to bids in negotiations: They get whittled away, the terms get changed, and, sometimes, the whole negotiation breaks down under the force of an ultimatum from one of the parties involved. Does this mean you should ask for a good deal more money than you actually need in your plan? Actually, that may not be the best strategy either. Investors who see a lot of plans are going to notice if you’re asking for way too much money. Such a move stands a good chance of alienating those who might otherwise be enthusiastic backers of your plan. It’s probably a better idea to ask for a little more than you think you can live with, plus slightly better terms than you really expect.  


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Marc Kneepkens's insight:

Some great viewpoints in the business plan debate. I would say, write one, and clarify your business for yourself first.

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4 Things Entrepreneurs Should Think About That May Not Be in Their Business Plan

4 Things Entrepreneurs Should Think About That May Not Be in Their Business Plan | business plan template | Scoop.it
Two young women recount the lessons they learned from starting their social media-marketing agency.

Walking away from the comfy confines of the corporate world to start our own business was not only scary but we also encountered considerable skepticism from family and friends. What about job security, room for advancement, a 401(k) and insurance, they asked. Some wrote us off as simply two naive, young women. Others thought we were crazy to walk away from everything our burgeoning corporate careers appeared to offer for a situation in which success was far from guaranteed. 

We weren’t just making this decision on a wing and a prayer, though. We had identified a tremendous potential opportunity. Having recently helped several entrepreneurial friends market their new businesses, we recognized the positive impact that social media offered for brand awareness, reputation management and lead generation. We learned how to successfully target large numbers of business prospects in a cost-effective way. Once we were able to begin quantifying results and demonstrating a return on investment, we launched our own social-media-marketing agency.


We carefully constructed a comprehensive plan of our strategy for capitalizing on this opportunity. We had a mission statement and planned how much money we personally needed to invest to get the company running and cash to set aside for lean times. 

We projected how many clients we needed to sign and what to charge. We identified our target industries and our competitive advantage  over other agencies. 

With dollar signs and dreams of autonomy dancing through our heads, we ceremoniously offered our resignations the same day.  

Yet we quickly learned how much we hadn’t accounted for.  

There was way more to worry about and address than we had ever envisioned. Panic quickly began to set in. Perhaps the naysayers were right and we were in over our heads. Maybe we were, in fact, just two naive young women who had foolishly given up their corporate careers. Was it too late to call American Express and beg for our jobs back? 

We are happy to share that we never did make those calls. As bleak as things seemed, we somehow found ways to weather the storm and our company survived. Four years and seven additional employees later, the company continues to grow. 

Ye it took more hard work, sweat and tears than we ever imagined. This is where our pain becomes your gain: We want to help those about to dive into the entrepreneurial pool by sharing four items that are critically important to consider.


1. Find a good lawyer.

Shortly after launching, we received a cease and desist letter concerning the use of our company's  name. We were unsure about the ramifications and what would be needed to rectify it. If not for a competent business attorney with experience representing companies similar to ours, we could have lost more than just time and money.

Partnering with a trustworthy attorney who is knowledgeable and savvy in helping entrepreneurs is pivotal. Establishing the right relationship is key, as the right or wrong advice can make or break your firm. Take your time, perform due diligence and don’t simply go with the cheapest option. 


2. Work with a knowledgeable accountant.

Being so new to running a business, we did not know how much we actually did not know. Very early on we were introduced to an accountant who seemed smart, professional and pleasant. A big draw for us was that his rates were also very affordable. Everything was running smoothly. But as tax season hit, disaster struck. He did not sufficiently prepare us for how much money we were responsible for in taxes. Since we had a small cash-strapped business, the tax bill had the potential to cripple our firm.

Upset and seeking a second opinion, we were put in touch with a veteran certified public accountant who specializes in helping startups. Not only did he help us lay out a plan (which allowed us to meet year-end tax obligations), he pointed out several other items on our return where we had been missing out on an opportunity to save.

He also demonstrated how closely he works with clients throughout the year to help them manage and improve cash flow, all while setting realistic expectations and preparing them for the tax season. While it was a humbling experience, we learned the value of having a strong CPA. The right one isn’t just your accountant: He or she can be a partner to and an extension of your business. So do your homework.


3. Hire people better than you.

Early on, we were challenged in trying to attract great talent to build out our team. In addition to having a brand new agency with no proven track record and a tiny roster of clients, we were unable to offer salaries competitive enough to procure experienced individuals from other firms.  

We felt that if we were lucky enough to find someone pleasant, professional and competent who was willing to take a chance with our firm, we should hire that person.  

Once we got some people on board, we quickly learned how some individuals were not as experienced or hungry as they had advertised. Their work was OK but it was simply the bare minimum of what was required. We needed a certain level of quality to help differentiate our firm and attract other businesses to work with us.

We were now stuck with these staffers until we could find better support. This illustrates the importance of thoroughly scrutinizing and vetting candidates. This became our first lesson in the importance of being patient during the hiring process, regardless of the need for help.

Hiring the right person can take your business to new heights. Conversely, hiring the wrong person can quickly drag down a business. You can never be too careful when analyzing a potential hire. If you aim to hire people whom you perceive to be as talented and driven as you (or even more so), it will pay off.


4. Prepare to always be networking.

The biggest culture shock during our transition from corporate employees to business owners was the demands on our time. There were so many logistical and operational challenges peripheral to our brand’s mission that took our attention. But if we were busy dealing with lawyers and accountants, while interviewing, hiring and training support staff, how could we generate awareness of our brand and uncover new clients?

This is when we discovered the power of professional networking. As we accepted the reality that our professional lives no longer took place just between 9 and 5, we learned there were opportunities to attack all at once several areas involved in running a small business.

We were delighted to discover the wealth of events, trade shows and networking groups designed to connect us with professionals who could help our business from top to bottom. Most important, they put us in direct contact with the types of organizations we hoped to target. The connections we made at these events were invaluable. It also demonstrated to us that the work we did during the day was only half the battle.

If we weren’t personally out there spreading awareness of our brand and making strategic business connections, then no one else would do so for us. We were hunters now and would be able to eat only what we could kill. Therefore, we needed to always be prepared to network and connect with anyone and everyone we met.

Remember, your next client, deal or referral partner can come from striking up a simple conversation while waiting in line at a store or standing on the subway. Be prepared to introduce yourself, talk about your business and share your elevator pitch.

In addition, be sure to identify all events and opportunities that will allow you to connect with the right audiences. Fill your calendar. You are your brand’s best publicist.


Get your Free Business Plan Template here: http://bit.ly/1aKy7km



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Marc Kneepkens's curator insight, September 23, 2014 4:39 PM

Yes, a business plan is necessary, but there are a few more requirements that you will need in your business.

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Why Business Plans Don't Get Funded - Common Startup Mistakes

Why Business Plans Don't Get Funded - Common Startup Mistakes | business plan template | Scoop.it
Your business plan is very often the first impression potential investors get about your venture. Avoid these mistakes and make it to the next step.

Your business plan is very often the first impression potential investors get about your venture. But even if you have a great product, team, and customers, it could also be the last impression the investor gets if you make any of these avoidable mistakes.


Investors see thousands of business plans each year, even in this down market. Apart from a referral from a trusted source, the business plan is the only basis they have for deciding whether or not to invite an entrepreneur to their offices for an initial meeting.

With so many opportunities, most investors simply focus on finding reasons to say no. They reason that entrepreneurs who know what they are doing will not make fundamental mistakes. Every mistake counts against you.

This article shows you how to avoid the most common errors found in business plans.


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Content MistakesFailing to relate to a true pain

Pain comes in many flavors: my computer network keeps crashing; my accounts receivable cycle is too long; existing treatments for a medical condition are ineffective; my tax returns are too hard to prepare. Businesses and consumers pay good money to make pain go away.

You are in business to get paid for making pain go away.

Pain, in this setting, is synonymous with market opportunity. The greater the pain, the more widespread the pain, and the better your product is at alleviating the pain, the greater your market potential.

A well written business plan places the solution firmly in the context of the problem being solved.

Value inflation

Phrases like "unparalleled in the industry;" "unique and limited opportunity;" or "superb returns with limited capital investment" - taken from actual documents - are nothing but assertions and hype.

Investors will judge these factors for themselves. Lay out the facts - the problem, your solution, the market size, how you will sell it, and how you will stay ahead of competitors - and lay off the hype.

Trying to be all things to all people

Many early-stage companies believe that more is better. They explain how their product can be applied to multiple, very different markets, or they devise a complex suite of products to bring to a market.

Most investors prefer to see a more focused strategy, especially for very early stage companies: a single, superior product that solves a troublesome problem in a single, large market that will be sold through a single, proven distribution strategy.

That is not to say that additional products, applications, markets, and distribution channels should be discarded - instead, they should be used to enrich and support the highly focused core strategy.

You need to hold the story together with a strong, compelling core thread. Identify that, and let the rest be supporting characters.

No go-to-market strategy

Business plans that fail to explain the sales, marketing, and distribution strategy are doomed.

The key questions that must be answered are: who will buy it, why, and most importantly, how will you get it to them?

You must explain how you have already generated customer interest, obtained pre-orders, or better yet, made actual sales - and describe how you will leverage this experience through a cost-effective go-to-market strategy.

"We have no competition"

No matter what you may think, you have competitors. Maybe not a direct competitor - in the sense of a company offering an identical solution - but at least a substitute. Fingers are a substitute for a spoon. First class mail is a substitute for e-mail. A coronary bypass is a substitute for an angioplasty.

Competitors, simply stated, consist of everybody pursuing the same customer dollars.

To say that you have no competition is one of the fastest ways you can get your plan tossed - investors will conclude that you do not have a full understanding of your market.

The "Competition" section of your business plan is your opportunity to showcase your relative strengths against direct competitors, indirect competitors, and substitutes.

Besides, having competitors is a good thing. It shows investors that a real market exists.

Too long

Investors are very busy, and do not have the time to read long business plans. They also favor entrepreneurs who demonstrate the ability to convey the most important elements of a complex idea with an economy of words.

An ideal executive summary is no more than 1-3 pages. An ideal business plan is 20-30 pages (and most investors prefer the lower end of this range).

Remember, the primary purpose of a fund-raising business plan is to motivate the investor to pick up the phone and invite you to an in-person meeting. It is not intended to describe every last detail.

Document the details elsewhere: in your operating plan, R&D plan, marketing plan, white papers, etc.

Too technical

Business plans - especially those authored by people with scientific backgrounds - are often packed with too many technical details and scientific jargon.

Initially, investors are interested in your technology only in terms of how it:

  • Solves a really big problem that people will pay for;
  • Is significantly better than competing solutions;
  • Can be protected through patents or other means; and
  • Can be implemented on a reasonable budget.

All of these questions can be answered without a highly technical discussion of how your product works. The details will be reviewed by experts during the due diligence process.

Keep the business plan simple. Document the technical details in separate white papers.


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No risk analysis

Investors are in the business of balancing risks versus rewards. Some of the first things they want to know are what are the risks inherent in your business, and what has been done to mitigate these risks.

The key risks of entrepreneurial ventures include:

  • Market risks: Will people actually buy what you have to sell? Will you need to create a major change in consumer behavior?
  • Technology risks: Can you actually deliver what you say you can? On budget and on time?
  • Operational risks: What can go wrong in the day-to-day operations of the company? What can go wrong with manufacturing and customer support?
  • Management risks: Can you attract and retain the right team? Can your team actually pull this off? Are you prepared to step aside and let somebody else take over if necessary?
  • Legal risks: Is your intellectual property truly protected? Are you infringing on another company's patents? If your solution does not work, can you limit your liability?

This is, of course, just a partial list of risks.

Even though you may feel that the risks are negligible, potential investors will feel otherwise unless you demonstrate that you have given a lot of thought to what can go wrong and have taken prudent steps to mitigate these risks.

Poorly organized

Your plan should flow in a nice, organized fashion. Each section should build logically on the previous section, without requiring the reader to know something that is presented later in the plan.

Although there is no single "correct" business plan structure, one successful structure is as follows:

  • Executive Summary: This is a brief, 1 to 3 page summary of everything that follows in the plan. It should be a stand-alone document, as many readers will make their initial decision based on the executive summary alone.
  • Background: If you are in a highly specialized field, you should provide some background in layman terms since most investors will not have advanced degrees in your field.
  • Market Opportunity: Describe how businesses and consumers are suffering, and how much they are willing to pay for a solution.
  • Products or Services: Describe what you do, and how your solution fits into the market opportunity.
  • Market Traction: Describe how you have succeeded in attracting customers, marketing and distribution partnerships, and other alliances that demonstrate that experts in your market are betting on your solution.
  • Competitive Analysis: Identify your direct and indirect competitors, and describe how your solution is better.
  • Distribution and Marketing Strategy: Describe how you will go to market, how you will price your products, etc.
  • Risk Analysis: Identify major sources of risks, and describe how you are mitigating them.
  • Milestones: Showcase a strong past track record, and describe key checkpoints for the future.
  • Company and Management: Provide the basic facts about your company - where and when you incorporated, where you are located, and brief biographies of your core team.
  • Financials: Provide summaries of your P&L and cash flows, and the assumptions used to come up with these. Also describe your funding needs, how you will use the proceeds, and possible exit strategies for investors.

As stated earlier, there is no "right" structure - you will need to experiment to find the one that best suits your business.

Financial Model MistakesForgetting Cash

Revenues are not cash. Gross margins are not cash. Profits are not cash. Only cash is cash.

For example, suppose you sell something this month for $100, and it cost you $60 to make it. But you have to pay your suppliers within 30 days, while the buyer probably won't pay you for at least 60 days.

In this case, your revenue for the month was $100, your profit for the month was $40, and your cash flow for the month was zero. Your cash flow for the transaction will be negative $60 next month when you pay your suppliers.

Although this example may seem trivial, very slight changes in the timing difference between cash receipt and disbursement - just a couple of weeks - can bankrupt your business.

When you build your financial model, make sure that your assumptions are realistic so that you raise sufficient capital.

Lack of Detail

Your financials should be constructed from the bottom-up, and then validated from the top-down.

A bottom-up model starts with details such as when you expect to make certain sales, or when you expect to hire specific employees.

Top-down validation means that you examine your overall market potential and compare that to the bottom-up revenue projections.

Round numbers - like one million in R&D expenses in Year 2, and two million in Year 3 - are a sure sign that you do not have a bottom-up model.

Unrealistic financials

Only a very small handful of companies achieve $100 million or more in sales only five years after founding.

Projecting much more than that will not be credible, and will get your business plan canned faster than almost anything else.

On the other hand, a business with only $25 million in revenues after five years will be too small to interest serious investors.

Financial forecasts are a litmus test of your understanding of how venture capitalists think.

If you have a realistic basis for projecting $50-100 million in Year 5, you are probably a good candidate for venture financing. Otherwise, you should probably look elsewhere.


Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Insufficient financial projections

Basic financial projections consist of three fundamental elements: Income Statements, Balance Sheets, and Cash Flow Statements. All of these must conform to Generally Accepted Accounting Principles, or GAAP.

Investors generally expect to see five years of projections. Of course, nobody can see five years into the future. Investors primarily want to see the thought process you employ to create long-term projections.

A good financial model will also include sensitivity analyses, showing how your projected results will change if your assumptions turn out to be incorrect. This allows both you and the investor to identify the assumptions that can have a material effect on your future performance, so that you can focus your energies on validating those assumptions.

They should also include benchmark comparisons to other companies in your industry - things like revenues per employee, gross margin per employee, gross margin as a percentage of revenues, and various expense ratios (general and administrative, sales and marketing, research and development, and operations as a percentage of total operating expenses).

Conservative assumptions

Nobody ever believes that assumptions are conservative, even if they truly are.

Develop realistic assumptions that you can support, refrain from using the words "conservative" or "aggressive" in your plan, and leave it at that.

Offering a valuation

Many business plans err by stating that their company is worth a certain amount. How do you know? The value of a company is determined by the market - by what others are willing to pay - and unless you are in the business of buying, selling, or investing in companies, you probably don't have an acute sense of what the market will bear.

If you name a price, one of two things can happen: (a) your price is too high, and investors will toss your plan; or (b) your price is too low, and investors will take advantage of you. Both are bad.

The purpose of the business plan is to tell your story in the most compelling manner possible so that investors will want to go to the next step. You can always negotiate the price later.

Stylistic MistakesPoor spelling and grammar

If you make silly mistakes in your business plan, what does that say about how you run your business?

Use your spelling and grammar checkers, get other people to edit the plan, do whatever it takes to purge embarrassing errors.

Too repetitive

All too often, a plan covers the same points over and over. A well-written plan should cover key points only twice: once, briefly, in the executive summary, and again, in greater detail, in the body of the plan.

Appearance matters

At any point in time, an investor has dozens if not hundreds of plans waiting to be read. Get to the top of the pile by making sure that the cover is attractive, the binding is professional, the pages are well laid out, and the fonts are large enough to be easily read.

On the other hand, don't go too far - you don't want to give the impression that you are all style and no substance.


Get your Free Business Plan Template here: http://bit.ly/1aKy7km


Execution MistakesWaiting until too late

The capital formation process takes a long time. In general, count on 6 months to a year from the time you start writing the plan until the time the money is in the bank.

Don't put it off. Your management team should be prepared to invest about 500 hours into the plan. If you are too busy building your product, company, or customers (which is arguably a better use of your time), consider outsourcing the development of the business plan.

Failing to seek outside review

Make sure that you have at least a few people review your plan before you send it out - preferably people who understand your market, sales and distribution strategies, the VC market, etc.

Your plan may look perfect to you and your team, but that's probably because you've been staring at it for months.

Good, objective reviews from outsiders with a fresh perspective can save you from myopia.

Overtweaking

You could spend countless hours tweaking your plan in the pursuit of perfection.

A lot of this time would be better spent working on your product, company, and customers.

At some point, you need to pull the trigger and get the plan out in front of a few investors.

If the reaction is positive, and they want to move forward, great.

If the reaction is negative (assuming that the investor was a good fit to begin with), then you may have been heading down the wrong path. Get feedback from a couple of investors, and if a general consensus emerges, go back and refine your plan.

Conclusion

It's a tough investment climate, but good ideas backed by good teams and good business plans are still getting funded.

Give yourself the best possible chance by avoiding these simple mistakes.



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Building a Business Plan: 5 Things Every Startup Needs to Succeed

Your business plan is going to be the first thing that potential investors look at when you solicit them for money or if they are looking for another business to add to their portfolio. Therefore, your business plan is going to be one of your biggest keys to success as a startup. There are going to be a few key things that investors look for in a business plan and you must address them in order to have a winning plan; the following are five things that you definitely need to include on your business plan in order to make it a winning one.

Market Opportunity

How large is your market? Is it growing? Is your market filled with repeat customers? Are there emerging opportunities within that market? Is that market under threat from anything? By addressing these questions in your business plan, you will not only give yourself and investors an idea of what you are looking at for future sustainability and growth, things that will be key in your business's success.


Size Up Your Competition

Instead of ignoring your competition in your business plan, address them. Include the things that your competitors have to their advantage in your business plan, and state how you are different or how you have an edge over these already-established businesses. This will show your investors that you have a realistic head on your shoulders and are able to look at the big picture; both good signs of success for a business.

Include Projections

At the end of the day, people are investing in your business in order to make money. Having three year minimum projections will show your investors how much your business stands to make versus how much it stands to lose, and will put your investors' minds at ease about the risk that they are taking in investing in you. These projections will look especially tantalizing if you include market analytics that are well founded and come from good sources.

Cash Flow Statements

Even if you are just starting your business, if you are already gaining cash flow, you should state it on the business plan that you are offering to investors, and tie them into your projections of cash flow. Any sort of positive cash flow is going to be attractive to your investors and will draw them in more than almost anything else on your business plan since these statements have already happened and are not based on abstract statistics of years past or years to come.

Give An Executive Summary Of Your Business

Even though this should go at the forefront of your business plan, it was left for last on this list to make sure that all of the other elements of a good business plan went into your executive summary. These are synonymous with abstracts in a scientific study; they are to give your investors an idea of who you are and what you aim to do, with results included. This should be short, sweet, and to the point, but should be polished and include enough detail to tantalize them enough to read further.

By: Murray Newlands is a startup adviser, investor, and entrepreneur. He's written for many major publications, such as VentureBeat and Entrepreneur.



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How to Fix What's Wrong With Your Business Plan

How to Fix What's Wrong With Your Business Plan | business plan template | Scoop.it
Wondering why your business isn't growing? It all goes back to that foundation you first created for your company, or didn’t create. Fix your business plan.

Without a strong and clear strategic plan, your business may flounder, and you may make a lot of costly mistakes along the way.

The following are some of the most common problems business owners have with regards to their business plan.

1. It’s Nonexistent

Maybe you never slowed down enough to actually write a business plan for the strategic growth of your company in its early days. Perhaps that’s because you didn’t think you needed one, were overwhelmed at the idea of writing one, or didn’t know where to begin.

How to Fix It: Better late than never. Start today with a fresh business plan or strategic plan on where your company is and where you want to take it. Start with free software such as Enloop.

2. It’s Ginormous (and Therefore Useless)

Back in business school, you were taught that business plans had to be thick tomes, 40 pages plus. They needed to be all-inclusive and leave no stone unturned.

Fortunately, that rarely applies to small businesses (unless perhaps you are seeking funding from investors), and what you’ve got is overkill. It’s so overwhelming, you never actually take it out to review it.

So what’s the point of having it if you don’t use it?

How to Fix It: Try a simpler plan. You may be the only person who ever reads your strategic plan, and that’s okay. But you want it to be readable and comprehensible, and that starts with simplicity. Stick to the basics, and don’t strive for length. Just get to the point.

3. You Never Look at It

Maybe you developed a fantastic business plan…5 years ago. Likely a few things have changed since then.

A plan should be a living, working document that you regularly review (try for 2-4 times a year) and modify as needed.

How to Fix It: Blow the dust off that thing and take a look at what you’ve got. The structure can probably stay the same, but if you’ve pivoted in your product offerings or otherwise changed company goals, those need to be reflected in the business plan.

4. It’s Not Actionable

Maybe you stuffed your plan with $10 words and filled it with fluff. You read it and don’t have a clue about what to do next.

How to Fix It: Amend that plan with action items. If you established a goal of becoming a $1 million company, set up steps for how you can make that a reality. These need to be achievable and measurable steps so that the next time you review your strategic plan, you can actually see how far (or not) you’ve come toward achieving those goals.

Having a manageable, updated strategic business plan is what keeps your business on track toward achieving those goals you’ve set for yourself. So keep it simple, keep it updated, and keep it nearby so you can refer to it regularly.



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7 Simple Steps to Build Your Own Business

7 Simple Steps to Build Your Own Business | business plan template | Scoop.it
If you dream of owning a business but don't know where to start, we break it down into seven easy steps.


While some people are happy to be worker bees, others dream of being able to run the show.

If being a business owner is on your bucket list, you’re in luck. The process isn’t nearly as difficult as you might think.

Of course, there are many ways to start and run a business, and this article isn’t intended as legal advice or a guarantee of your success. However, if you want to run a business that is a step above selling Tupperware on the side, here are seven steps to help you hit the ground running.

Step 1: Start with the right idea

Your successful business starts with the right idea. How do you know if you have the right idea? Let’s answer that question by asking some more questions.

  • Are you passionate about it? Or at least mildly interested?
  • Do you have expertise in the area?
  • Does your idea fill a need?
  • Can it be profitable?
  • What’s the competition like?
  • Do you have access to any needed resources or supplies?

The best ideas often seem to be the simple ones. If you have to go to great lengths to explain why someone might want to buy your service or product, it may be time to head back to the drawing board.

Maybe take a look at other areas with similar demographics and see what businesses are thriving there but aren’t available in your local community. Talk to family and friends or head online to check out what other businesses are doing and how you could possibly do it better. Perhaps you have a hobby that could be turned into a business.

Step 2: Create a plan

Once you have a fairly good idea of your business focus, it’s time to start making some plans – not plans in your head but plans on paper.

Now, some people get stuck on Step One because they fear making a mistake in their business selection. The real mistake is letting the idea phase paralyze you.

At this point, your idea doesn’t need to be golden. You’re not spending any money on it yet. You can change it, or even pitch it, if it ends up not working out.

Creating a formal plan is one way to decide whether your business will be a winner or loser. And by formal plan, I’m not talking about a shiny dossier or professional business plan. I’m talking about you and a notebook sitting down and writing out what needs to happen to transform your “makes-me-giddy” idea into an actual moneymaking business.

My favorite business planning method is to reverse engineer the process. In other words, start with what you envision your established business looking like. Then, look backward and determine what needs to happen to reach that ending point. Make sure you are writing down firm dates for each step in the process.

Don’t worry if you’re not sure whether your timeline is realistic. That’s what Step Three is for.

Step 3: Bring on the experts

As a new business owner, you need a little outside perspective. Fortunately, there are numerous places to get free and unbiased advice.

You can read more about your options in this article regarding the three resources every new business owner needs to know.

I will add that when you get this unbiased advice, please take it to heart. As an unfortunate example, a few years back a couple in my community poured their life savings and retirement money into a business despite being advised by a counselor from SCORE that it wasn’t a good idea. They disregarded that advice and the business failed, along with their marriage.

Step 4: Take care of the legalese

I won’t belabor this point, partly because I don’t want to bore you and partly because it varies so widely from state to state and municipality to municipality.

However, you do need to take care of the legal and financial details before launching your business. That may include selecting the right business structure (the Small Business Administration has a good rundown of the various types or you could read our very own Stacy Johnson’s advice), opening separate bank accounts, applying for tax identification numbers, and receiving any necessary permits or licenses required in your jurisdiction.

Advisers from the SBA and other resources may be able to help you navigate the necessary paperwork and provide basic guidance. If you’re planning to spend a lot of money on your venture, you may want to pay an attorney to make sure everything is on the up and up before your business launches.

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Step 5: Find some cash

No, there are no government grants for small businesses.

Some small-business owners open their own wallets or fire up a credit card for startup capital. If your pockets aren’t that deep, you could try crowdfunding or, for service-based businesses, use the Internet to minimize startup costs. There’s also microlending, friends and family members, or bank loans to consider.

From our Solutions Center: Find a better credit card in seconds

For more information on your options, including government small-business loan programs, go to this article about how to find money to start a business.

Step 6: Market, market, market

You have a plan. You have the paperwork. You have the cash.

It’s time to launch!

A successful business is as much about having a good marketing plan as it is about having a good idea. You need to let others know about your fabulous new product or service, and asking your Facebook friends to share a status update simply isn’t going to cut it.

Since your business is new, you probably don’t have a lot of money to spend, but that’s OK. Constant Contact has put together this rather solid list of 10 ways you can market on a shoestring.

Step 7: Grow smart, not fast

Finally, don’t make the mistake of getting too big too fast. Hiring on employees right away can stretch your budget thin. Expanding your product line or clientele rapidly could mean quality suffers and customers are lost.

Slow and steady wins the race, and the same can be said for business success. Make sure you have the capital and the market data to back up any expansion. Go back to your original plans and build upon those rather than haphazardly jumping on opportunities as they arise.

Starting a small business doesn’t have to be difficult or complex. These simple steps will get you pointed in the right direction and your business off on the right foot.


Read more at http://www.moneytalksnews.com/2014/08/15/7-simple-steps-to-build-your-own-business/#wPv5tKVRuoe8JAWQ.99



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7 Steps for Impressing Venture Capitalists

7 Steps for Impressing Venture Capitalists | business plan template | Scoop.it
Don't miss your opportunity to impress your next VC. Here are 7 simple ways to stand out from other startups.


I'm not trying to burst your bubble here, but you're not the only entrepreneur out there trying to secure funding. I get pitched by different entrepreneur three to five times a day. It gets old. Since there are plenty of venture capitalists out there that are in the same boat as I, you really have to stand out or we're going to pass you right over.

So how can you make yourself heard through all the noise? Here are seven things you need to have to impress me.

1. Have a Real Business in Place

Sounds obvious, right? But just because you have a so-called "million-dollar idea" doesn't mean that there's an actual business in there. A VC is going to be more interested in funding a company that actually has a functioning business in motion--and not something that's going to get acquired or flipped for a quick buck.

The best place to start is by creating a solid business plan that lays out what your business does, what the market's like, how the business is organized, and how much funding is required. Even if you don't use the same business plan when you go into your meeting, planning all of this out early allows you to fix any problems.

2. Start Networking

You've got your business plan in hand. Now what? Before you start cold-calling or emailing VCs, start networking and get an introduction prior to asking for money.

Start by identifying the VCs that you want to do business with. Once you've identified them, start getting in good with their contacts. If you could make a great impression on someone who influences them, then you're already in. Even if that doesn't happen, that start connecting with them on Twitter or LinkedIn. Also consider pulling resources like college professors, CEOs, or finance attorneys to get that all-important introduction.

Honestly, if someone comes to me without a connection to me... I'm not going to invest in them, period. You need to network like crazy.

3. Follow the 10/20/30 Rule of PowerPoint

This isn't exactly new--Guy Kawasaki wrote about this back in 2005, but it's still a useful tactic when trying to impress a VC. Basically, this rule states that your presentation should only be 10 slides, last no more than 20 minutes and use a font that is at least 30 points. The slides should cover the following:

  • Problem
  • Your solution
  • Business model
  • Underlying magic/technology
  • Marketing and sales
  • Competition
  • Team
  • Projections and milestones
  • Status and timeline
  • Summary and call to action

4. Be Compelling

There's no shame in being afraid of public speaking. We've all experienced that dread at some point, but don't let the fear and anxiety overtake you during your presentation. If you're passionate, sincere, and honest, VCs will see that. They'll notice that you're an individual who truly believes in what what you're selling. And that makes you compelling.

You don't have to do cartwheels or put on a song and dance. Be prepared. Practice. Smile. Look at your audience. And let the VC know how much this business means to you.

5. Prove That You've Done Your Homework

Pull out facts and figures that illustrate that there's an actual market for your idea. Mention the competition and what makes you different. Tell a great traction story to prove that your business can generate revenue. According to investor Brendan Baker, only 5 percent of pitches tell a great traction story. If you really want to stand out, be a part of that small minority.

6. Be Realistic

At the same time, be realistic. Don't try to be sneaky and trick investors with made-up or inflated numbers. Investors will see right through it. Provide and present accurate information in a plan that includes the most important drivers for revenue (amount of customers, selling price) and costs (sales and marketing expenses, costs of goods sold).

7. Don't Get Fooled

Investors aren't out to get you. When they ask you a trick question, they are intending to see how knowledgeable and motivated you are. One such trick question would be asking if they could hire a CEO at some point, or whether you see yourself as the long-term CEO. Don't get offended or beat around the bush. A response like "I want to build a great company and am willing to step aside" should impress them.



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Marc Kneepkens's insight:

First point: have a real business in place and come up with a business plan. Find more information on www.Business-Funding-Insider.com

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Marc Kneepkens's curator insight, August 11, 2014 8:14 AM

This sums it all up. Get your business plan together and learn how to present it right. And don't come up with just an idea. Your plan must be more solid than that.


Flexcel Network's curator insight, August 14, 2014 3:56 PM

Sound advice for entrepreneurs - have a good business plan, know your market, present your case well and more.

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SmallBiz | 5 Steps to Writing a Business Plan

SmallBiz | 5 Steps to Writing a Business Plan | business plan template | Scoop.it

When starting a business, writing a business plan should be your first priority.

One of the critical milestones in starting a business is writing the business plan. It should be your first priority, given its standing as the road map for how your business idea becomes a reality. JW Ellsworth, counselor and mentor at Score Hawaii, suggests the following five steps to formulating your business plan.

  1. Perspective
    Research and use resources available online to find samples of plans and formats to begin your plan, but be the author and take ownership of the content. By focusing on brevity versus quantity, a clear picture will emerge for founders and employees to embrace and follow.
  2. Business 101
    Define and describe the business, but be precise and succinct. For example, if you are providing weekly Waikiki entertainment tours for military personnel, you will have to set the stage for addressing next steps such as transportation logistics, marketing focus and employee requirements.  
  3. Competition Illuminated
    Identify your competitors by name and/or genre. Describe how you will challenge your competitors, such as by pricing, service and location.
  4. Loyal Customers
    Identify your target customers and form the basis of how you’re going to pursue them and keep them coming back.
  5. Financial Projections
    The reality check for any business plan comes with projecting revenues and expenses for the startup. Establish conservative and middle-of-the-road estimates for the first one to three years of operation. Unless your conservative projection shows steady growth during the first year and you are making money, you may need to revisit your assumptions and how you allot your capital resources.



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Some basic rules for writing a good business plan.

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A Business Plan Can Be Your Guide to Growth - Henssler Financial Blog

Whether you're a current business owner or a budding entrepreneur burning with the next great idea, one of the most important steps you can take on your road to success is creating a business plan. Why? A well-thought-out and well-written business plan captures your vision, illustrates it for others (including potential lenders and investors), and creates the roadmap you and your management team need to guide you through the growth of your business. Consider the following points:

If you're a current business owner, you probably feel like you're always working to close the next big deal, juggling financials, or responding to the latest crisis. Remember, however, that it's important to periodically climb out of the trees and take a good, hard look at the forest. A business plan can help you do just that: take stock of where you've been and lay the groundwork for where you're headed.

If you're a budding entrepreneur, a business plan can help you raise money. It will help prove to potential investors and lenders that your idea is worth funding.

For both current and potential business owners, the process of creating a business plan can prove beneficial by revealing potential risks and uncovering opportunities that may not otherwise be apparent.

To read the full article, click on the title or image.



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A business plan gives direction, understanding, access to funding and necessary planning information.

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11 Killer Free Tools to Launch and Build Your Startup

11 Killer Free Tools to Launch and Build Your Startup | business plan template | Scoop.it
Use all of the resources you can find to your advantage.

Yeah, we’ve all heard of the $100 startup, but free is way better, right?

Building startups can be hard. They’re worth it, but definitely not easy, although starting can be simpler than people make it.

There has never been a better time to start a company. Mobile proliferation has led to a world that is always connected. Moore’s Law is in full effect with computing faster and cheaper than ever before. There are endless free and useful products online that can help you launch and build your startup.

This is a very short list, as there are thousands of products and tools out there for startups, but here are some I’ve found to be useful.

Read more: click on title or image.

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Business Plan Template Review

Business Plan Template Review | business plan template | Scoop.it

Review of the Ultimate Business Plan Template by professional business plan reviewers.

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Check out our newly overhauled site. And it's also optimized for mobile.

Let me know if there are any glitches.

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To Investors, Startups Without Business Plans Are Expensive Hobbies - Entrepreneur.com

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By Martin Zwilling.

If you sold your last startup for $800 million, you probably already know how to build a business, and even conservative investors won’t worry about the quality of your next business plan. But for the rest of us, don’t believe the Silicon Valley myth that all you have to do is sketch your million-dollar idea on the back of a napkin and investors will line up to give you money.

Based on my experience as an investor and mentor to aspiring entrepreneurs in Silicon Valley and elsewhere, one of the quickest ways to kill your credibility and your startup is to offer a poorly written business plan, or none at all. There really is no excuse these days, with samples on the Internet, business-plan books in every bookstore and dozens of apps to automate the process.

A great business plan doesn’t have to be a book in length, with extensive financial statements. Most good ones I see are in the range of 25 pages, which is more than enough to describe concisely all the business what, when, where and how. The plan must simply answer every relevant business question that you could imagine from your team, partners and investors.

In fact, the process of organizing and documenting these elements is the best way to make sure you understand the answers yourself. Would you be comfortable buying a house from a builder, or building one yourself, with no plan on timeframes, costs and features? I hope not. Most investors tend to think of startups without a plan as expensive hobbies.

There is no magic formula for a formal business plan format or sequence, but I would recommend the following 10 sections, in this sequence, with relevant content:

  1. Executive summary
  2. Problem and solution
  3. Company description
  4. Market opportunity
  5. Business model
  6. Competition analysis
  7. Marketing and sales strategy
  8. Management team
  9. Financial projections
  10. Exit strategy


A business plan that skips one or more of these topics is not complete, so don’t jeopardize your one chance to make a great first impression by offering a partial plan. It only takes a little extra work to make it a professional document, with a cover page, table of contents, headings and page numbers. Don’t try to impress constituents with technical terms, jargon and acronyms.

If you don’t have the time to write things down, or your writing skills leave something to be desired, don’t be afraid to get some help. No executive I know writes all his own contracts, but every smart one owns every one that is written for him, and understands every element. An entrepreneur who can’t manage a plan probably won’t be able to manage the new business.

Of course, if you don’t yet understand all the elements, it’s time to learn. My advice here is to check your ego at the door, and find a mentor or a partner who has business experience and domain knowledge to help you plan a viable business. Your idea may be technically right, but without a business plan, it could be dead right, which is not the result anyone is looking for.

There are no guarantees, but various studies have found that entrepreneurs who create a good plan generally double their chances of securing funding and building a successful business. In any context, and especially in the high-risk world of startups where more than 50 percent fail, you need every advantage that you can get.



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Growthink helped me with two business plans. I liked working with Anna Vitale because she was a professional yet personable and that gave me a sense of trust. Keep up the good work.”


Phil Marcu


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7 Ways to Make “Write a Business Plan Month” Work for You

7 Ways to Make “Write a Business Plan Month” Work for You | business plan template | Scoop.it

December is National Write a Business Plan Month! Every business owner needs a plan — whether you’re in startup mode, seeking financing or preparing for another year at the helm of a growing business.

Of course, there’s no better time to draw attention to business planning than on the cusp of a new year. We’re all guilty of putting off tasks such as planning, but knuckling down in December can really give your business an advantage over your competitors by putting you in a stronger position to get the financing you need or launch a big marketing campaign come January 1.

If you’re like most, planning is a burden and a chore that’s hard to prioritize. Here are seven tips to kick-start the process:


Focus on What You Do Best

One of the easiest ways to get started with the planning process and make it work for you is to think about what you do best. What differentiates your business from the competition? What do you enjoy doing? What would you like to do more of? Are there other markets you could go after? Then think about what are you not doing enough of.

In other words, put together a SWOT analysis. This exercise can help you focus your ideas and inform your plans.

Do a Sales Forecast

Nothing kick-starts a small business owner into planning mode better than doing a sales forecast.

Whether it’s a healthy forecast or not, the process of thinking about your pipeline, prices, costs, revenue per unit/sale, is a natural segue into thinking about what has to happen to help you achieve your goals.

As the year progresses, review your forecast against actuals, and adjust your plans accordingly to help you stay on track.


Talk to Your Customers

Customers are a great source of planning inspiration. It doesn’t matter whether you run a landscaping business or software company, your customers’ needs and challenges can help inform your service or product strategy. Ask to hear about the negatives, too — your plans should also include a focus on performance improvement.

Launching a New Product?

If you plan on bringing a new product or service to market, be sure to validate your new idea before starting on a plan. The purpose of this exercise is to better qualify your idea, confirm market need and test.

  • Identify the need your product or service will address.
  • Do your market research. Talk to customers and prospects. Do they have a need for your idea? Are there certain features that they like or want more than others? Is the market large enough?
  • Just as they do on Shark Tank, help customers or investors get a feel for your product by putting together a prototype or a trial run of your service. This will help gauge whether the feature/functionality really does have appeal.


Tackle Your Plans in Manageable Chunks

Business planning isn’t the chore many think it is. Plans don’t have to be encyclopedic. While you may have grand ideas for your business, the devil is in the details, so it makes sense to approach business planning in bite-size portions. For example, if your goal is to grow sales by 20 percent, think about what it will take to get you there.

You’ll need a marketing plan, but you’ll also need a plan for ramping up operations and a hiring plan to staff your expanding business. What about your IT infrastructure? Will you need to purchase new equipment? Then you’ll need an IT plan and budget.

As your business grows, consider your business structure and insurance needs. Should you incorporate your business and/or adjust your insurance policy to mitigate the increased risk and liability that expansion can bring?

By tackling each of these areas directly, with the big picture in mind, planning gets a lot easier.


Set Goals

Once you’ve looked at all areas of your business, set goals and deadlines around your plans.

For example, if you’re looking to move out of your home office, plan your timeline and the key steps along the way to achieving your goal. What needs to happen by when? Think about the assumptions and variables that come into play — whether it’s the cash flow to pay for rent on a leased space or getting new daycare arrangements for your kids and pets. Consider how these factors will impact your timeline and budget.


Tax Planning

As you’re planning, don’t forget your taxes. The small business tax landscape changes each year, so put time aside now for a consultation with your tax advisor. This is also the time to make sure you’re taking or have taken full advantage of tax deductions.

In addition, rewind and use this time to learn lessons from your earlier filings. Did you struggle to keep up with estimated payments? Do you need to find ways to better maximize cash flow so this doesn’t happen again? Would a review of your business structure help your tax position going forward?


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20 Reasons Why You Need a Business Plan

20 Reasons Why You Need a Business Plan | business plan template | Scoop.it

20 Reasons Why You Need a Business Plan

Written by Pete Kennedy on Wednesday, April 9, 2008

1. To prove that you’re serious about your business. A formal business plan is necessary to show all interested parties -- employees, investors, partners and yourself -- that you are committed to building the business.

2. To establish business milestones. The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you'd certainly share the news that you launched your new website or reached $1M in annual revenues.

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3. To better understand your competition. Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company's competitive advantages.

4. To better understand your customer. Why do they buy when they buy? Why don’t they when they don't? An in-depth customer analysis is essential to an effective business plan and to a successful business.

5. To enunciate previously unstated assumptions.
The process of actually writing the business plan helps to bring previously "hidden" assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity.

6. To assess the feasibility of your venture. How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture.


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7. To document your revenue model. How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model.

8. To determine your financial needs. Does your business need to raise capital? How much? The business plan creation process helps you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital.

9. To attract investors. A formal business plan is the basis for financing proposals. The business plan answers investors' questions such as: Is there a need for this product/service? What are the financial projections? What is the company's exit strategy?

10. To reduce the risk of pursuing the wrong opportunity. The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities.

11. To force you to research and really know your market. What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target market for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace.


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12. To attract employees and a management team. To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that the idea is sound and that the business is poised to achieve its strategic goals.

13. To plot your course and focus your efforts. The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones.

14. To attract partners. Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed explanation of your company.

15. To position your brand. Creating the business plan helps to define your company's role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners.

16. To judge the success of your business. A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To reposition your business to deal with changing conditions. For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new ideas and strategies.

18. To document your marketing plan. How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business.

19. To understand and forecast your company’s staffing needs. After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion.

20. To uncover new opportunities. Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business.

 

 

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About Growthink

Since 1999, Growthink's business plan experts have assisted more than 1,500 clients in launching and growing their businesses, and raising more than $2 billion in growth financing.

Need help with your business plan? 

  • Speak with a professional business plan writer today.

  • Or, if you're creating your own PPM, you can save time and money with Growthink's new private placement memorandum template.

 

Dj Baker says

I find this a very simple, yet effective, breakdown of the reasons why a business plan is absolutely essential. From personal experience these 20 reasons our very much the truth. It is also very reassuring to know that there are trustworthy sites out there who do contain valuable information. Much appreciated, Dj
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5 benefits of having a business plan

5 benefits of having a business plan | business plan template | Scoop.it

When done properly, a business plan is more than a document that tells you and your staff what the future might hold for your company. A well-executed business plan maps out the precise future of your business in detail.

It is a strategy that takes into account the resources and goals you have now, and explains what needs to be done to get your company or organization to a position of greater profitability and heightened competence as the future unfolds.

Here are five things a business plan can do for your business:

1. Helps you find funding. You might be a fresh entrepreneur looking for capital investment or an established market leader who is looking to grow. In any case, your business plan is the place where you and your consultant put on paper all the reasons why investors should support you with their capital.

2. Manages your growth. As your business evolves, many things can change including your yearly budget, number of employees and your financial and client targets. If you do not keep on top of the effects of these changes, who will? Your business plan can help you assess and monitor how your company is currently evolving and how it will continue to grow into the future.

3. Determines and monitors your objectives. Perhaps above any other benefit of business planning, the setting and following through of goals is integral to the success of your business. At the most basic level, your business plan lets you decide and keep track of where you are now and where you endeavor to be in 'x' number of months or years. At a more advanced level, a cycle of business planning keeps you on target through regular meetings and updates.

4. Delivers your marketing approach. Who is your target audience? What are the unique selling points (USPs) that allow you to stand out next to the competition? By what tactics will you best reach potential clients? A marketing strategy is an important task unto itself, but you'll have it neatly packaged within your business plan.

5. Manages organizational and employee requirements. This element of your business plan lets you figure out who within your organization is filling which roles, whether you could benefit from more or less staff and how you will go about recruiting new employees.

A business plan is a valuable part of how you start and conduct your business. In assessing your present and forecasting your future, you'll be well on your way to a clearer vision and a higher chance of success. Good luck!


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Quality is the best business plan, period. — John Lasseter

Everything I do and everything Pixar does is based on a simple rule: Quality is the best business plan, period. — John Lasseter, PIXAR Founder



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7 Steps to a Finance-Centered Business Plan

7 Steps to a Finance-Centered Business Plan | business plan template | Scoop.it
If your startup calls for financing to get off the ground, follow this list to impress potential investors and lenders.

While many entrepreneurs can easily get started with a one-page business plan, the simple approach isn’t necessarily the right approach for every startup. If you’re going to need financing or investors, you’ll need to build a finance-centered business plan to address all your potential investors' or lending institution’s concerns.


Here are seven simple steps outlining what you’ll need for a finance-centered business plan.

1. Executive summary. You’re going to need to provide an executive summary of your business plan for investors or lenders to read. Think of this like the “cliff notes” of the whole plan. If you have already created your one-page business plan, the bulk of that document now becomes your executive summary. It should cover the highlights and key summary of all the other areas of the plan you’re about to cover.

Make sure that it’s brief enough so they can get through it quickly, but also contains enough information that they’ll want to keep reading and get the sense that you and your business are a good investment.

2. Business overview. At this stage in your plan you’ll want to outline what it is that your business is going to offer and what methods you plan to employ to make sure that it sells. It’s a high-level overview of the business’s make up that should include the type of business you’re in, how and where you plan to sell your product or service (Online? Retail location?) as well as the legal entity type you’ll be organizing as.

It can be easy in the executive summary to stray from the high-level overview so make sure you stay on point and keep this very broad. You’ll get into the nitty-gritty details later in your plan.

3. Management. If someone is going to invest in your business or lend money to you, they want to know who the leadership team is. Is it just you? What are your personal and professional qualifications for the job? What’s the rest of the advisory board or executive team like and how are they qualified?

Spell out the management so investors know your business is in skilled, capable hands.

4. The market. This is a crucial step that so many well-intentioned entrepreneurs skip. They get so excited about their passion for the business they want to create or the product they envision that they forget to sink ample time and resources into doing the market research.

No matter how much you’re in love with your idea, if there isn’t a market for it, it’s not going to sell -- which in turn means your business isn’t going to succeed. Find the need for your niche and amply describe your research for the market in this section so your potential investors know the market demand. Be prepared and don’t skip this critical step.

5. Sales and marketing strategy. This is the stage of your plan in which you will get to expand on step two’s business overview. Now you get to really detail how you plan to sell your product or service, what the marketing strategy is and how you’re going to create your specific success plan. Knowing your business and knowing the market thanks to your great market research will inform your decisions to set strategy here.

6. Financials. This step is often the one that presents the greatest challenge for some entrepreneurs. If you’ve managed to get this far in your business plan you are going to need to see it through and do the financials. The finance-centered business plan comes down in a big way to this step as those about to lend you money or invest in your business are going to want to know that their investment is projected to succeed.

Often, entrepreneurs don’t have the skills and background necessary to map out financial projections, so do yourself a favor and partner with a qualified, skilled CPA or business consultant who can help. Not only will that lend extra credibility to your business plan, but it will help you set out the financial future to anticipate your business’s success.

7. Complete your SWOT analysis. What’s SWOT? It stands for strengths, weaknesses, opportunities and threats. This step is your chance to do your market research for the business and its competitors. It's your opportunity to show that you’ve put time and analysis into the success of your business idea.

What will be the strength of your product and your management team? What are the weaknesses of your business and areas of vulnerability in your plan? What opportunities in the market are you planning to capitalize on and what threats already exist or might materialize from the competition?

Don’t underestimate the threats and weaknesses section of this analysis. You’ll want to show you thought of every angle and are prepared with ideas and answers.



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How to Start Your Own Company: 50 tips (infographic)

How to Start Your Own Company: 50 tips (infographic) | business plan template | Scoop.it


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What’s the Difference Between a Business Plan & Strategic Plan?

What’s the Difference Between a Business Plan & Strategic Plan? | business plan template | Scoop.it

What’s the Difference Between a Business Plan & Strategic Plan?


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Your business is never too mature to update its business plan and if it’s growing must update its strategic plan every quarter.

William E Rothschild once said, “What do you want to achieve or avoid? The answers to this question are objectives. How will you go about achieving your desired results? The answer to this, you can call strategy.” These words provide a nearly exact description of the differences between the business plan and the strategic plan.

 

The Business Plan

 

The business plan provides a written tour of your business’ operations.

This comprehensive plan includes the owners vision, purpose, values, standards, culture and ethics as well as the business’ model, its mission and objectives.

It then prescribes the staffing, location, infrastructure and software, marketing and financing requirements needed to meet those objectives.

The business plan examines and articulates

  1. the business’ potential for success,
  2. the competition, and
  3. identifies the business’ critical success factors that comprise it’s competitive advantages.
 In a detailed and organized manner, it reviews and explains every area of the business.

 

 

The Strategic Plan

 

The strategic plan describes the how.  It identifies the

  1. capabilities required to implement the business plan,
  2. steps, or strategies, that the business will use to meet, if not exceed, its objectives. The strategic plan can focus on the entire business or specific areas of the business, such as consumer marketing, customer retention and product introduction. As a result, businesses can have many strategic plans to address various areas of business.

.                 The who.   Each step, strategy or capability must be tied to one person in the business who will be accountable for the implementation and success of that strategy.

‘How’ is affected by the external environment.  A business that fails to adjust its ‘how’ will become a dinosaur.

Do I need both?

 

Some people explain that business plans are used for new companies and strategic plans are used for experienced and established companies. This is untrue. Business plans can be used by companies of all ages. Mature businesses often review their business plans annually to benchmark progress and verify that the business is on course to success. Business plans are used, at every business-maturity level, to obtain loans, secure partnerships and attract the interest of corporate executives. Similarly, strategic plans can be used by young businesses to develop competitive advantages, solidify operations and secure customer satisfaction. These plans are also beneficial in securing investors because they clearly define the steps and procedures that will be taken to achieve the defined results.

 

What comes first?

The business plan determines what you want to achieve and determines the boundaries of the strategic plan. The missions and objectives within the business plan not only define the desired results, but the time frame in which the results should be achieved. It tells the amount of resources, staff and finances that are available. The strategies in the strategic plan are developed around those criteria while introducing new areas and information that is needed to attain the desired results.  The strategies define how staff money and other resources must be allocated.

 

How often do I need to do this work?

 

It is important that you review and update your business plan (objectives) at least once each year. Regular review of your business plan will help you to judge your business success, identify necessary changes and resolve issues before they develop into disasters. A regular business plan review will also help you to develop strong business forecasts for your business, especially when the information is updated monthly.

Your strategic plan on the other hand must be adjusted more frequently.  This is more and more important as the external environment in which a business operates changes increasingly rapidly.  While a complete overhaul of strategies may be unnecessary, it is essential to frequently monitor and adjust ‘how’ you are working to achieve the objectives.

The faster you are growing the frequently your business and strategic plans should be revisited.

 

Factors that make up a business’ External Environment

 

The external environment of a business are those factors outside it that affect it’s ability to function. Some external elements can be manipulated by marketing, while others require the business to make adjustments. Monitor the basic components of your business's external environment, and keep a close watch at all times. The external environment is changing more rapidly now than ever before so vigilance is needed to ensure your competition doesn’t see the opportunities before you do.

 

Customers

Your customers are among the external elements you can attempt to influence, via marketing and strategic release of corporate information. But ultimately, your relationship with your clients is based on finding ways to influence them to purchase your products. Market research is used to determine the effectiveness of your marketing messages, and to decide what changes can be made to future marketing programs to improve sales.

 

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Government

Government regulations in product development, qualifications of professionals, packaging and shipping play a significant role in the cost of doing business and your ability to expand into new markets. If the government places new regulations on how you must package your product for shipment that can increase your unit costs and affect your profit margins. International laws create processes that your business must follow to get your product into overseas markets.

 

Economy

As with the majority of the elements of your business's external environment, your business must be efficient at monitoring the economy and learning how to work with it, rather than trying to manipulate it or blaming it for your results. Economic factors affect how you market products, how much money you can spend on business growth, and the kind of target markets you will pursue.

 

Competition

Your competition has a significant effect on how you do business and how you address your target market. You can choose to find markets that the competition is not active in, or you can decide to take on the competition directly in the same target market. The success and failure of your various competitors also determines a portion of your marketing planning, as well. For example, if a long-time competitor in a particular market suddenly decides to drop out due to financial losses, then you will need to adjust your planning to take advantage of the situation.

 

Public Opinion

Any kind of business scandal can be damaging to your business’s image. The public perception of your business can hurt sales if it's negative, or it can boost sales with positive news. Your business can influence public opinion by using public relations professionals to release strategic information, but it is also important to monitor public opinion to try and defuse potential issues before they begin to spread.

 

Technology

Technology used to be lumped in with government……. Those days are long gone.  The use of technologies (software, tools, for manufacture, delivery, customer experience etc) is a major differentiator between businesses.  And plays a significant role in either the success or failure of business.  It must be a central consideration in the creation and design of your business model.     A change (minor or major) in delivery mechanism for a service can mean a major competitive advantage.

- See more at: http://creatingwhatmatters.co.nz/articles/whats-the-difference-between-a-business-plan-strategic-plan/#sthash.czkhmXeL.dpuf


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3 Startups Offer New 'Microloan' Options for Entrepreneurs With Big Ambitions

3 Startups Offer New 'Microloan' Options for Entrepreneurs With Big Ambitions | business plan template | Scoop.it
Big banks aren't so good with small loans. There are new options available for getting financing with minimal hassle on friendly terms.

In the United States, a whopping 543,000 new businesses are launched each month. Sadly, half of all start-ups aren’t able to keep their doors open for more than five years. The failure of many small businesses is due, in large part, to lack of funding.

In the last several years, however, there has been a surge of microfinance institutions popping up across the United States, offering a solution to this problem by issuing microloans.

A microloan is defined as a very small, short-term loan with a low interest rate, usually extended to a start-up company or self-employed person. Typically, these loans do not exceed $35,000.


Microloans started as a solution for impoverished borrowers in underdeveloped countries. These borrowers typically lacked collateral, steady employment and a verifiable credit history, making them a difficult candidate for traditional financing options. Microloans have been successful in helping to support entrepreneurship and encourage economic growth in these developing nations. 

In more recent years, microlenders have been establishing themselves all across the United States. According to the 2009 Microfinance Information Exchange study, almost 1,100 microfinance institutions were identified and shown to collectively serve more than 74 million borrowers with $38 billion in loans. Some microlenders are finding creative ways to improve and streamline this already simple process by offering unique microlending services. 

1. TrustLeaf.com: Daniel Lieser, co-founder and development manager for TrustLeaf.com, extends microloans through crowdsourcing. What makes TrustLeaf.com unique is that business owners only borrow from friends and family. Their campaigns are not publicly available. This protects the borrower’s privacy.

Borrowers simply set up a campaign on Trustleaf’s site, providing all the necessary information about their business. They then select loan terms. Potential borrowers are able to pick from a few lending options with different interest rates, minimum amount due,and various repayment terms. The borrower and the lender come to an agreement about which loan terms make the most sense for both parties.


Once the borrower has set up their campaign, they can invite friends and family to view the campaign. “Friends and family don’t like to haggle because it makes them uncomfortable,” said Lieser. “Having this system in place prevents those awkward conversations of attempting to collect money when it’s due because it’s all laid out on our platform. Funding comes straight from the lender, a peer-to-peer system.”


2. PayPal Working Capital. PayPal currently has more than 148 million active accounts, processing more than nine million payments on any given day. Last year, they launched PayPal Working Capital, offering microloans to a select number of businesses. Loans offered through this program range from $1,000 to $20,000.

Paypal Working Capital is unique because loan repayments are based on a fixed percentage of total monthly business sales, creating flexibility for a borrower whose sales patterns are difficult to predict. In addition, the deciding factor in extending a line of credit to a business is their sales history within PayPal, so no credit check is performed.


3. Bitcoin Brands. Peter Klampka, CEO of Bitcoin Brands Inc, is a forward thinker. He foresees Bitcoins being utilized as a means for extending microloans. Bitcoins are digital currency you can send through the Internet. They are universal, have the lowest transfer fees, almost zero time restrictions and have the fastest transfer rate compared to traditional currency loans and transactions.

Bitcoins can also be sent from one mobile phone to another. “With a micro-transaction, I can text you that money and you have it in minutes,” said Klampka. “It’s fast, cheap and can be universally accepted from anyone at any time.”

Bitcoins are quickly gaining public acceptance. Overstock, Expedia and thousands of small vendors currently accept Bitcoin payments. Even forward-thinking universities are getting involved. Every student who enrolls at MIT this fall will receive $100 worth of Bitcoins.

It is clear that microloans present a competitive alternative to traditional banking institutions and are transforming lending practices. This new source of credit is creating a lifeline of capital for small businesses and helping them continue to grow, even in the most competitive of markets.



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Via OFFICIAL ANDREASCY
Marc Kneepkens's insight:

Creativity and innovation in the financing sector is booming.

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OFFICIAL ANDREASCY's curator insight, August 6, 2014 6:33 AM

A microloan is defined as a very small, short-term loan with a low interest rate, usually extended to a start-up company or self-employed person.

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Don't Forget to Write a Business Plan

Don't Forget to Write a Business Plan | business plan template | Scoop.it

Some entrepreneurship advocates have suggested that would-be entrepreneurs abandon the writing of business plans. In the fast-paced world of entrepreneurship, business plans are obsolete, they say. To these observers, entrepreneurs are better off just acting, pivoting when they get something wrong, rather than taking the time to write plans.

But, before you give up on the idea of writing a business plan, you should consider the multitude of benefits that business plans provide. Careful academic research shows that writing a business plan helps entrepreneurs to turn their business ideas into reality, more than doubling the odds that those beginning the start-up process will progress to becoming owners of up-and-running companies...

Writing a business plan offers four benefits.

To read the full article, click on the title or image





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Marc Kneepkens's insight:

Excellent article. It gives four reasons for writing a business plan, bringing the odds of succeeding with your business in your favor.

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