Business Plan Starts with a Mission to Succeed
Business plans are intended to be flexible plans for succeeding, not just surviving, as a company. Yet, according to a famous Harvard professor John Kotter, 70 percent of business initiatives intended to bring organizational change will fail. That is a remarkable figure because it means efforts to adapt to a changing marketplace is failing. There is a barrier between the business plan founded on a mission and the real world.
The setbacks are sometimes one of losing sight of the company mission and weakening to plan. The purpose of the mission statement clearly states what your organization seeks to accomplish: It has a philosophy underlying it that does not change. The mission statement is a reflection of the nature of products or services sold, potential for growth, pricing strategy, customer service, and role in the community, competition and others.
The business plan needs to be developed so that each and every segment drives the business towards fulfilment of the mission. A change of proposal is merely a strategy for keeping the business on track to fulfil the mission. Leading change requires first turning to the mission statement and the business plan. A business that needs to change must be able to write a sense of urgency all through the organization because staying true to the mission statement is needed to succeed. If a change idea is needed, it means the business has gotten off course from its mission and its vision.
The business plan goals and strategies may need to be revised, but that should always be a step in the change process. In fact, business plans can serve as the direction for change as each section, from the Executive Summary to the Financial Statements, are reviewed in light of the need for change. Leadership will identify specific strategies for incorporating change and then communicate the revisions on an organization-wide basis. The change process must be empowering and encompassing, meaning employees at all levels should be embraced as change agents.
Business plans begin with a mission statement and then serve as a living breathing document. Leading organizational change is not always easy, but it can be impossible unless there is buy-in to the mission and the business plan. The strategies used to get that buy-in can vary, but staying on message cannot.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
The secret of successful angel investors: Diligence
Having a lot of money is not the only thing that is needed by someone who wants to be a successful angel investor. While this is definitely a plus, as it allows one to invest in a lot of startups with potential, there is also one other characteristic that all effective angel investors have in common – diligence.
Diligence is one of the traits that are often overlooked, especially those who are new in the field of entrepreneurship. Most people are focused on looking for money as fast as they could. However, as business owners and investors start to gain more experience in their respective professions, they become aware of the importance of things that they used to they do not pay much attention when they are new to the field, such as the importance of diligence.
Diligence is defined as the person’s carefulness and persistence in his chosen career. It came from the Latin word diligere, which means “take delight in” or “to value highly.” Presently, the term is often used to describe the characteristic of working hard for one’s chosen profession.
Diligence plays a huge role in the success of the investor. As already stated, having a lot of money would not guarantee an angel investor’s success but diligence would.
This particular trait is most important for angel investors when selecting a particular business that they would like to invest in. According to experts, the most successful angel investors are those that take time in selecting the businesses that they would invest in.
Angel investors who are new to the business must keep in mind that money is not the only key to success. It should be coupled with the right amount of other traits that will help entrepreneurs in transforming their vision into realities.
The reality is that there is no real recipe that would enable someone to become more diligent in one night. It comes over time but experts advise angel investors not to rush into signing a deal without looking at all aspects of the business plan. This will soon develop into the fitting diligence that all successful angel investors have.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Funding Business Expansion through ‘Private Equity Financing’
Expansions are believed to be the best indicator that businesses are doing good. Unfortunately, while every entrepreneur seems to be of the opinion that bigger businesses are always better, the act of expanding a company is easier said than done.
It is easy to determine if a business is ready for expansion. In fact, there is only one major indicator: there is a bigger demand for the product or the service that the company offers. However, having a bigger demand does not necessarily mean that the business owner can easily whip out a plan on how he will expand his or her business – there is a bit of a problem called money.
A business owner would be lucky if he or she has some savings that can be tapped for a business expansion. This is not generally the case. And while there are a lot of options when it comes to financing a business expansion – angel investors, bank loans and support from venture capitalists – there is one option that has started to get attention of business owners over the years: public equity financing.
As the name implies, private equity financing means that an investor would be invited to put his or her money in a business in exchange for a partial ownership of the company.
This in itself would make a lot of entrepreneurs turn around and look for other ways to finance their business. A lot, of course, would not want to hand over the reins of the company that they built to another person in exchange of financing a business expansion.
But looking at it clearly, public equity financing is not as bad as it sounds. For one, agreements between the parties will still have to be forged – meaning one does not necessarily have to hand over the control of the business to the investor as the original owner have an option to retain the majority of the company, thereby putting him or her in direct control of the operations.
One has to keep in mind that investors, at least most of them, are merely concerned with the profits of their investments and would not want to be bothered by the rigors of administrating a business. Moreover, by being technically a part-owner of the company, the original owner will have an assurance that the investor is putting a great deal of interest in the business that also carries his or her name.
This is why public equity financing works both ways in expansions: investors get their bigger profits, while original owner gets to expand his or her business.
Looking for partners
The challenge in public equity financing, like in other forms of investor-related concerns, is for the business owner to find and convince one to be an equity partner in his company.
Finding will not really be a problem, as there are always those who have some extra funds that they intend to invest in a business eyeing expansion. The major concern is to be able to convince them.
In convincing potential equity partners, business owners must keep in mind that they have to convince the former that they will earn profits from their investments. This can be achieved by presenting relevant information as to the operations of the business.
This may include, among others: discussions on the competencies of the current management to handle the expansion, the risk exposure of the equity partners, the business plan and objectives, the financial history and performance of the business.
The entrepreneur should also be ready in negotiating with the terms of the deal, including, as stated earlier, the level of control – or the lack of it – that the equity partner would have once the agreement is in place.
Finally, entrepreneurs must be able to list down his or her reasons for the decision to expand and, more importantly, to utilize public equity financing as a means for the business expansion.
Like what had been repeatedly said, capital for business startups and expansions will never run out – one just has to know what he or she is looking for and, more importantly, where to look for it.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
Top 5 Most Profitable Industries
The capability of entrepreneurs to effectively and efficiently manage their own businesses is among the requirements to succeed in this field. However, there are other factors that contribute to the actual results of a venture.
One of these, apparently, is the general performance of the sector in which the entrepreneurs establish their businesses. According to a new report, healthcare and the real estate sectors remain the most profitable sectors, comprising almost half of the list.
Despite this, what topped the list is something that is not surprising as deals with money – accounting and other related services. These are some of the most profitable sectors are as follows:
Accounting and related services
There is no denying that proving accounting and related services, such as bookkeeping and payroll services, top the list of most profitable industries at the moment. According to latest reports, the sector has a net profit margin of 19.8 percent – primarily due to high demand and low equipment overhead and equipment costs.
Legal service
Next to accounting, which is also not a surprise, is legal services. With the rise of legal issues arising both between individuals and companies, there is nothing new with reports that among the sectors that reap a big margin is the field legal service. The only surprise, perhaps, is that it did not top the list this year contrary to the last.
Oil extraction; Machinery rental
Tied on the third place are sectors concerned with oil extraction and the leasing/rental of industrial and commercial machinery equipment.
The high ranking of these two is primarily on the current policy that focuses on increased production of crude oil and the rising number of constructions and industrial development in the country in recent years.
Dental services
The fifth on the list, dental services, is quite a surprise. Who would have thought that a specialized sector would be able to compete with, for instance, industries dealing with oil extraction? On another thought, however, the number of people requiring tooth extraction – not to mention other related dental services – will remain a demand so long as the humanity survives.
Real estate leasing; Brokers; Medical service
Tied on the sixth to eighth places are the real estate leasing, real estate brokerage, and the medical profession.
According to latest reports, the improvement of the economy has resulted in the better performance of the housing market, thus the good profit margin of real estate brokers. Moreover, however, this has also pushed the profits of those engaged in rental services, the prices of which have shot up in recent months.
Meanwhile, doctors, as expected, are in the list – primarily due to the increasing population, and partly due to the issues on health and lifestyle that is affecting the new generation.
Other health practitioners; Management companies
Tied for the ninth and tenth spots are other health practitioners and management companies.
Dentists and doctors are not the only ones reaping the increase in profit margin in the past months. Expected to join them are other health practitioners, who are very much needed just like the doctors and dentists in this part of the world.
With the growing trend of businesses outsourcing management strategies to experts, those who have management backgrounds have jumped at the bandwagon and established their own companies that provide the current demand – for a profit, of course.
These ten industries are just some of the most profitable sectors that those who consider establishing businesses – or even just applying for a job – should think about. Runner-up include outpatient care services, schools, real-estate related activities, death care services, and mining support.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
Basic Principle of Financing
Poor management is often referred to as the main factor of why businesses fail. Lacking or poorly timed financing is a nearby second. Whether you are a starting up business or expanding your business, adequate capital is important. Yet it is insufficient to essentially have enough financing; understanding and planning are necessary to control it well. These qualities will ensure business owners to avoid mistake like having a wrong type of financing, or underestimating the cost of borrowing money.
Ask yourself this question before inquiring about financing:
- Do you need more capital or can you work on with your existing cash flow?
- How do you characterize your need? Do you need the money because you want to expand? Or as a cushion against risk?
- How vital is your need? You can get the best terms when you foresee your needs rather than looking for money under pressure.
- How big is your risk? All businesses suffer from risks and danger, and the level of danger will influence expense and accessible financing plan B.
- How strong is your management team? Management is the most important element surveyed by money sources.
Possibly most importantly, how does your need for financing mesh with your business plan? If you don't have a business plan, make writing one your first priority. All capital sources will want to see your plan for the start-up and growth of your business.
Don’t assume all money is similar
There are two types of financing: equity and debt financing. If you are looking for money you should consider your business debt to equity ratio – the difference relatively concerning dollars you've borrowed along with dollars you've invested in your organization. The harder money masters include invested in the organization, the more it really is for you to entice loan.
If your company has an excessive percentage of equity to debt, you may want to seek debt financing but if your company has a high percentage of debt to equity, experts say you should increase your ownership capital for added funds. In this way you will not be over-leverage to the point of ruining your company’s welfare.
Equity Financing and Venture Capital
Most small scale businesses use limited equity financing but with debt financing, additional equity mostly come from non-professional investors like friends, relatives, employees or customers. However, the most common source of professional equity funding comes from venture capitals. These are institutional risk takers and may be groups of wealthy individuals, government-assisted sources, or major financial institutions. Most specialize in one or a few closely related industries.
Venture capitals are sometimes seen as deep-pocketed financial gurus looking for start-ups in which to invest their money, but they most often prefer three-to-five-year old companies with the potential to become major regional or national concerns and return higher-than-average profits to their shareholders. Venture Capitals earn money by owning equity in the companies it invests in. They generally prefer to influence a business passively, but will react when a business does not perform as expected and may insist on changes in management or strategy. Changing some of the decision-making and some of the potential for profits are the main disadvantages of equity financing.
Debt Financing
Banks, savings and loans, commercial finance companies, and the SBA are some of the sources for debt financing. State and the local government have come up with programs in the recent years to give encouragement to the growth of small business to help increase the economy. Family members, friends, and former associates are all potential sources, especially when capital requirements are smaller.
Banks traditionally have been the major source of small business funding. Their main role has been as a short-term lender offering demand loans, seasonal lines of credit, or single-purpose loans. Banks generally have been unwilling to offer long-term loans to small firms. The SBA guaranteed lending program encourages banks and non-bank lenders to make long-term loans to small firms by decreasing their risk and leveraging the funds they have available. The SBA's programs have been an integral part of the success stories of thousands of firms nationally.
In addition to equity considerations, investors or lenders mostly require the borrower's personal guarantees in case of default. This will assure that the borrower has a sufficient personal interest at stake to give attention to the business. For most borrowers this is a burden, but also an obligation.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
Writing a Sure-Win Business Plan
Entrepreneurs often look into their business plans as the heart of the startup. This is, according to most of them, the most important document that would ensure that the business is running towards achieving its ultimate objective.
Some business owners, however, fail to see beyond this point. The reality is that business plans are not just important in the day-to-day operations of the company. It is also important in terms of securing the most important element of a business – the funding.
A lot of entrepreneurs think that business plans do not contribute to the decision of a potential investor in funding the business. Some think that investors rely only on the pitch documents that were given to them.
Unfortunately, this is far from the reality. Most investors rely on the business plans when deciding whether or not they should fund the business. The reason is that they would not want to base their decision on documents that they know were tailor-made to impress them. These are intelligent people, and they often look for signs that the person whom they intend to partner with are also intelligent enough to make the business profitable.
This is where the need for a sure-win business plan comes into place. Instead of just writing a bland plan on how the business is expected to operate, the document should also include portions that would pique the interest of a potential investor. These include ideas on how the company will implement crucial projects, as well as handle potential problems that it would face in the future.
The bottom line is this: The business plan should not show the weakness of the company. This does not mean that the document should avoid mention of negative aspects. It should. But instead of leaving it like that, the document should also feature a “plan” on how the management would and should address it.
Instead of featuring the pessimism of the owner, the business plan should showcase the ability of the people behind the business that they are capable of handling every single problem that the start-up may face in the future.
This approach to writing a competitive business plan is an effective way of luring potential investors. It shows potential, and highlights the capability of the owners in thinking through with their plans.
Business plans are not just internal documents that are written for the sake of the employees and the main players of the company. Rather, it is a document that provides an overview of the business to external groups, most importantly the potential investors.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
Equity crowdfunding and venture capitalism: Why it matters?
The United States government has approved a landmark law for entrepreneurs, especially those involved in the small and medium enterprises sector, in 2012. Known as the Jumpstart Our Business Startup – or JOBS – Act of 2012, the legislation enables startups to raise as much as one million dollars through various websites that will be established following the implementation of the law.
There are a number of people, both supporters and critics of JOBS Act, who argue that the law will affect the more traditional venture capitalists. They say that by providing support to crowd funding – or raising funds that come from different people to finance a business – the government essentially removed venture capitalists from the picture.
A number of people are happy with this possibility, but a whole lot more are shaking their heads. After all, venture capitalists, over a period of time, have made it possible for a lot of major businesses to flourish.
The reality, however, is that JOBS Act does not diminish the relevance of venture capitalism in the field of entrepreneurship. In fact, it can be argued that the law will strengthen the system and would enable more businesses to enter the arena. Here’s why:
Crowd funding and venture capitalism may end up having different clients
According to the law, the legislation will enable businesses to raise as much as one million dollars in capital through crowd funding that will be assisted by dedicated online portals. This in itself shows a major difference between the two funding sources.
Based on latest studies, the median of venture capitalist investments in the country in the past three months is at four million. This means that the clients of crowd funding and venture capitalism will come from different backgrounds as they will need different amounts of money.
Instead of “killing” venture capitalists, the law may have just given them the opportunity to find better deals as businesses that need smaller funding will have another platform for them to look for investments.
Crowd funding and venture capitalism are made for each other
These two are in fact a perfect match. With the existence of an established system of funding (i.e. crowd funding for smaller businesses and venture capitalism for slightly bigger ones), entrepreneurs will have an assurance that there will be support as their business grows.
Moreover, the existence of crowd funding system should not threaten or drive away venture capitalists as there are always businesses looking for investments. In fact, they can even use the portals to take part in crowd funding initiatives or scout possible partners that are looking for investments.
The nature of the legislation is to provide entrepreneurs – especially business startup owners – with an equal opportunity to look for people who may help them in establishing their businesses. While it is true that the law will create ripples and affect the already established system of funding in the United States, it is imperative for everyone to understand its objectives and see to it that it achieves its goals.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
Dealing with investors: What to do before and after close?
Private equity investors are considered as one of the most important people for those who want start or expand their respective businesses. After all, the amount capital that they provide and the way these are handled are among the factors that make or break a startup.
Unfortunately, a number of entrepreneurs think that dealing with private equity investors are limited to the period when the company or business is raising funds. Some believe that once the funding round has closed, the money will fall any time regardless of how they transact with the partners that signed a deal with them.
The reality is far from this misconception. Instead of forgetting about the investors who pledged to provide funds for the business once the money had been transferred, entrepreneurs must keep in mind the significance of giving importance to these people. After all, entrepreneurs would not want the investors pulling out the money in a middle of a crucial project.
Here are some tips on how entrepreneurs should deal with investors before and after the close of the funding round:
Before the close:
Once of the most crucial things that the entrepreneur must do during the funding round is to find the appropriate investor for the company. This would depend on the type of business that he or she is into. There are investors who prefer medical-related companies, while others want information technology startups, among others.
Regardless of the type of business, entrepreneurs must find a private equity investor, or those who understand the risks of investing in the nature of the business. This would mean that the investor is willing to let go of his or her money for seven years, and put it in a rather risky and illiquid asset.
To counter the risks, the entrepreneur must explain to the potential investor the positive side of the investment – for instance the high rate of return for the successful ones.
Perhaps the most important advice for the entrepreneur is to find an investor who shares the vision of the company. This is highly relevant as it would help in the growth of the business.
After the close
Once the agreement between the entrepreneur and the investor has been signed, the former must continue to look after the latter. This is necessary as it increases the possibility of future contributions from the said investor.
“Taking care” of the private equity investor does not take much. The business owner just has to provide regular updates – whether monthly or quarterly – to keep the investor on the loop. Likewise, requests must be kept reasonable and thoroughly explained. This will surely get the business owner on the good books of the investors.
Dealing with partners, especially private equity investors, is not an easy task. However, doing this the right way will ensure the continuous flow of support for the business.
Secret to Finding Angels Investors: Great Business Plan
One of the most daunting tasks for business startup owners is finding an angel investor who would be willing to finance the bulk of the company’s expenses. And while there are a lot of possible investors out there, the number of people competing for these opportunities is also huge.
In fact, some information regarding investments showed that less than 10 percent of business startups in the United States get the nod of the most sought after angel investors in the land. This figure, however, should not discourage business owners who are competing for some financial support from investors. After all, one in every ten applicants gets the nod of an angel investor.
The question, therefore, is how will a business owners ensure that they will be the one who will get the coveted nod of an angel investor? The answer is simple – a good business plan!
While angel investors take into consideration a number of things, one of the most important criteria that they look at is the business plan. Thus, having a well polished plan is something that business startups need to have, especially if they want to secure the support of an angel investor.
There are a number ways to come up with an investor-ready business plan. But one of the first things that the entrepreneur must look at is the actual idea for the business.
Ideas should not be the one-paragraph description of what the entrepreneur wants the business to be. Rather, it should be as detailed as possible so that it covers items such as the target market, marketing strategy, capital allocation, and return of investment for possible business partners.
Having a detailed business idea is a good start into coming up with a business plan. This will assure possible investors that you are serious with the business and are not just toying around with the idea.
Ideas are one thing, but detailed understanding of the things that would have to be done to make the idea a real thing is another. Angel investors prefer the latter.
Once, would-be business owners have a detailed idea regarding the comings and goings of the proposed business, then this is the good to time come up with a good business plan.
Business plans are actual documents that detail a number of things that angel investors want to see. In addition to description of the proposed business, the plan should also include a step-by-step process on how the objectives and vision of the company will achieve.
It is necessary for the business plan to be detailed, but not long enough to bore the angel investors to death. Moreover, it should be written in a way that the investors will understand its contents.
Having a good business plan is a good way to attract angel investors. Therefore, business owners must thrive to come up with something that will entice possible partners to enter into an agreement with the company.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright 2014 Funded.com LLC
The Secret of Successful Angel Investors
Having a lot of money to support potential start-ups is not the only thing an angel investor needs to be successful. While entrepreneurs often think that the only thing an angel investor invests in his or her ventures is the money, the reality is that there are more than just meets the eye.
There is no denying that money is an important element in the job of an angel investor. However, this is not the only one – he or she needs due diligence in selecting a potential business partners.
Diligence is defined as a person’s carefulness and persistence in his or her job or work. It came from the Latin term diligere, which literally means “to value highly” or “take delight in.” But in English, it usually means working hard or doing everything for the job in hopes for a successful career.
This kind of characteristic and personality is important for angel investors. Generally, would-be entrepreneurs simply think of angels as those who have a lot of money which they can use to fund start-ups, the truth is that they are perhaps the most terrifying people for business startups owners. Angels succeed because of their diligence – or more descriptively, being able to train hard eyes to entrepreneurs and make them sweat while doing their pitches or presentations.
More importantly, successful angel investors simply do not stop after scrutinizing the presentations of potential partners. He or she should not stop until the business is actually well established. Angel investors must be able to point out weaknesses on the business plan, as well as put out suggestions for the good of the business.
Unfortunately, not every angel investor has this kind of diligence. There are some who are really good in selecting potential business startups, but fail to assist its owner from achieving success. This situation is not good, both for the entrepreneur and investor themselves.
Some experts said that a number of angel investors simply think that having a lot of money will make a successful business. It is not, as angel investors are expected to help the business owners in transforming their vision and putting everything written in paper into tangent realities.
The truth is that there is no recipe for the “due diligence” needed by angel investors. The idea is very broad, and its execution will have to depend on the situation and relationship between the angel investor and the entrepreneur.
In the end, what angel investors must remember is that money will not be able to buy them success. Diligence does. Having this kind of trait is the secret of successful angel investors, and everyone who invests in business startups with potentials need to have this to ensure a good future.
This is true for business startup owners, who often think that money is everything. It is not. Entrepreneurs must find diligent angel investors who would be able to help them turn their dreams of having a successful business into a reality.
More detailed information and useful advice can be found at http://www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.http://www.funded.com
Copyright2014 Funded.com LLC
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