5 Keys to Raising Capital for Your New Business Idea

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

Prepare a business plan

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

Practice your pitch

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

Plan for threats and weaknesses

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

Know your USP

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

Show that you the right person to lead your business

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

Ideation – Where Business Ideas Come From

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

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

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

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

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

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

Disruption – a new and revolutionary way of doing something. Examples include Uber, AirBnB, and Amazon. Our modern interconnected world – supported and made possible by the internet – now allows us to completely reinvent, transform and disrupt entire industries. The internet and other technologies are not the only way to execute on a disruptive business idea, but it has certainly accelerated our ability to do so.
Where do great ideas come from? Sources of ideas can include reading, podcasts, art, architecture, personal experiences, travel, conversations, hobbies, borrowing from others, crowd creativity, crowd sourcing, and attempting to solve existing problems in our world. For existing businesses, the best source of ideas is usually your customers. Yet it takes a bit more than just experiencing or reading something to spark your next great idea.

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

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

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

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

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

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

Gold Business Ideas For Entrepreneurs

Brilliant Business for Entrepreneurs

Starting a business takes a lot of thinking and planning. Finding an excellent business idea can be a daunting task – what with the different options of business ideas you can choose from. In this article, we will explore the process of finding the right business idea to start on as well as offer some of the hottest and most popular business ideas. A successful business does take a great idea to begin with. However, this is not necessarily the case all the time. An original business idea can either go up or down. Since it is unproven and untested yet, such an idea doesn’t usually come with an established market.

Starting

The first step to starting your own business is to find a brilliant biz idea that will make money. To find it, you should think creatively, even out of the box, so to speak. You can start by asking yourself what interests you. You must be enthusiastic and passionate about your business idea. That’s why as much as possible, your business endeavor must really be in your field of interest. You can find business ideas by from your friends and family members. You can also do some research in the internet to find the hottest niches today. Another great way to think up a new business idea is to observe the latest trends.

Which business idea should you pursue?

There are virtually no limits as to the choices of business ideas for entrepreneurs. There are literally thousands of options. From pizza parlors to freelance writing, from services to products, you can definitely find a business idea perfect for an entrepreneur like you. However, which among these thousands of options are you going to stick with? As mentioned above, you should be enthusiastic and passionate about. There is an adage in entrepreneurship that goes like this: “Do what you love the money will follow.” However, this formula does not guarantee instant success. Many entrepreneurs have pursued ideas that are in line with their interests with varying degrees of success and failure.

Some Inexpensive advices for a new Entrepreneur

Let’s assume that you are just about to start your own business – a new entrepreneur so to speak. Whether you are a homemaker looking for ways to earn extra income or an unemployed trying to start a business from scratch, there are several opportunities and ideas you can tap to start a business without spending too much capital. The following business ideas will not guarantee instant riches within months but they have the possibility to grow into full-time businesses in due time.

Be a web entrepreneur – the internet offers vast potentials for earning money. From freelance work to AdSense, there is simply an abundance of business ideas you can choose from. You can start by setting up your own website, no need to have technical know-how about web design, just make sure that the site looks good and it provides excellent content. Then, sign up for an affiliate program – this is where you will earn. Then, learn as much as you can about search engine marketing and promote your website. Regularly update your site with new content and just wait for the revenues to come in. It may not be much at first but over time, affiliate programs can help you earn a decent income – and you didn’t spend too much except your time and your knowledge.

Be an eBay Businessman – This is the online version of the garage sale, if you have some things you don’t really need, you can actually earn some money by putting those up for auction at eBay. Just make sure you stick to products that you know about. You can also start making your own products such as candles, art jewelry, and many more. You can sell these on eBay or any other internet mall site.

Try Multi-Level Marketing – Do you have the ability to persuade people to avail of products and services you offer? Do you have a wide network of friends and contacts? Do you have enough time on your hands to move around talking to people? Then you probably have a future in the world of multi-level marketing or MLM. This is one of the fastest growing businesses today and you can have it based right in the comfort of your own home.

Start your own scrap gold refining small biz – Now it is possible. There are outside a lot of sources to refine gold and sell it online. This business is ideal for you if you are planning to do some profitable investment but it requires your attention and commitment if you want to be successful. The best about this small biz is that you can complement it with all the above strategies commented.

These are just a few of the huge array of business opportunities you can choose from. Widen your horizons and look for more possible businesses ideas. Dig up magazines, journals, and other publications that might provide additional business ideas for entrepreneurs. Do your research on what the latest trends are. Who knows, you may find the right business idea for a new entrepreneur and strike gold.