Every successful business you may find started just as an ideal. This may be one thing which you also have in mind; ‘an idea’ and just that. If you have an innovative idea about a new product or service, which you think will revolutionize the industry, it can surely be a great start. However, in order to bring that idea into life, you need to work on it further. Establishing a business and taking it to success requires a great vision in combination with proper planning, research, and a whole lot of funds.
Before getting on to the crucial aspect of funding, you have several steps to cover to ensure that your business idea is solid with good potential. It is a fact that not all startups make it to success, but those who plan and execute it well with a proper vision surely succeeds. If you have a great business idea, but struggling to find funding, here are some steps to gain a better insight in taking your idea on to the road of funding.
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It’s good to get a mentor
When you ask someone for money to fund for your business idea, people may always be skeptical about it and may want solid proof to ensure that your idea is viable. So, think whether you have gotten a critical opinion from someone who is an expert in this sector.
Approach a good mentor is a crucial step in your entrepreneurial journey as a beginner. An experienced and reliable mentor can give you a straightforward and honest opinion about your concept and critically evaluate your ideas to delineate what’s good and bad. Remember, you shouldn’t waste your time on some bad ideas or an immature plan. With proper mentoring, you can either fine tune it to perfection or may always find another right opportunity to pitch in.
To find good mentors, you may start attending the business networking events, which will help you to interact with people of your industry and get connected to the apt mentors. There are also innovation hubs and mentoring initiatives by business consortiums meant to support newbie entrepreneurs programs, which you can explore. Unlike one may think, many of the senior and seasoned entrepreneurs may be so happy to share their experience, knowledge, and inputs to your business if you just take an initiative to ask.
Do proper market research
With a business plan it minds, it is essential to identify your target market and scope, which is the most challenging step in actualizing your idea into the business. Market research needed to be done with the right objective to get answers to questions like:
Who is the target audience of your business?
What are the demographics of your ideal consumer persona in terms of age, gender, education, ethnicity, and other traits?
What makes people of your target group interested in your product or service?
It is noted that many fresh entrepreneurs tend to waste a lot of money and time on their great ideas, which ultimately no one wants to buy.
You can explore a wide variety of resources to understand the target market and the pitfalls in it. As Liberty Lending experts suggest, you may also try to conduct research to get some direct data too from the target audience to assess it. This can be done effectively by:
Conducting surveys among potential consumers.
Test the focus groups
Conducting interviews with the target audience.
Exploring social media polls, and also
Accessing data through Google Analytics or other online tools.
Some reliable sources for data collection include:
Similar industry firms.
Universities and research papers
A statistic from government surveys
Database of business and financial services
Research and PR agencies.
Business databases online etc.
Top way fresh entrepreneurs explore now to do market research as well as fund-raising to go hand-in-hand is crowdfunding.
Develop a proper business plan
Along the course of business research, you may get a more reliable and realistic idea about the scope of your business and the possible funding requirements. Even if you succeed in crowdfunding campaigns to actualize the startup plans, the cost of running and working capital may go far beyond the initial capital requirements.
So, before hunting for the fund, it is essential for you to have a solid business plan in hand in terms of how much money is actually need to start a business and take it to the break-even stage. There are many factors to consider while making a business plan like the inventory buildup for a peak season, experiential budget, projected sales and more. A good mentor may help you in this aspect of business planning also out of their experience.
Considering outside funding avenues
Once if you have done enough market research and have a proper business plan in hand, you have to next serious start to think of funding. Apart from the latest avenues like crowdfunding, there are a lot of conventional ways too to raise business funds. After carefully following the steps mentioned above, you may be ready to approach the outside investors to raise the needed capital through outside investors and grow the business. Apart from the previously discussed crowd-funding, some of the other methods to generate funds include, but not limited to:
Approaching a bank for a loan.
Exploring private business finance lenders
Approaching government agencies offering SME loans
Angel investors etc.
All these funding options have pros and cons. All these don’t come that easily, but it takes careful consideration and intensive groundwork to succeed. Investors want to get a reassurance that your company stands a fair chance to succeed and give them better returns on investment. No one will be interested in offering funds unless you can prove that your business plan and product can make a real impact in the market. From above, one should assume that generation of a business idea and raising enough funds for it everything doesn’t come that easily. Proper planning, clear insight, and persistent effort are the key to success in business funding.
Marina Thomas is a marketing and communication expert. She also serves as a content developer with many years of experience. She helps clients in long-term wealth plans. She has previously covered an extensive range of topics in her posts, including business debt consolidation and start-ups.