How Do You Know Your Business Idea is Good?

Investors want to fund good business ideas. That’s a broad statement because what seems like a good idea to me may be different from what seems like a good idea to you. So many ideas never seem to go anywhere. Some are just so uninspiring that they can’t seem to get the attention of anyone, much less investors. You can even write a whole business plan around a bad idea, leading to great disappointment when investors spot the fact it’s bad.

A good business idea is much more than just an idea. You can sit there all day and come up with ideas, but that doesn’t make them good. Good business ideas have certain qualities that differentiate them from other ideas. For one thing, a good business idea fulfills an unmet customer need, and it is often a need the consumer doesn’t even recognize yet. That may sound odd, but great ideas are often not great until someone invents a product or service.

Determining if a business idea is a good one requires more than just knowing the market will appreciate products or services. The idea must be feasible and realistic in terms of production costs, the time from funding to sales, profitability and safety. A good business idea is also one that can be brought to fruition because the entrepreneurs have the knowledge and skills needed.

There are more qualities associated with good business ideas, but one of the most important is related to innovation. Good business ideas offer a new twist on products or represent creative and innovative new products. The new twist or innovation should represent something that matters to people which means it brings some kind of satisfaction.

There are no hard and fast rules or magic formula to define a good business idea. Instead, investors will consider all of the qualities of the idea coupled with the marketing, competitive and financial factors.

Mistakes That Entrepreneurs Must Avoid When Pitching to Investors

Posted by admin in Business Startups, investor on 09/17/2013

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Very few entrepreneurs are given a chance to pitch their businesses to investors. Unfortunately, not everyone who gets a chance to talk with potential source of financial support receives positive response. The reason: they often commit mistakes when pitching their business startups.

Here are some of the most common mistakes that business owners do when pitching their companies to potential investors.

Long elevator pitches

Elevator pitches are called as such because they are expected to be short – around a minute, which is the average length of a person’s ride in an elevator. And despite being called the “elevator pitch,” there are other instances when business owners are required to be brief when introducing their companies to possible investors. These include chance meetings in cocktail parties, meetings, or even introductions between common friends.

Such cases, which often happen in informal settings, are not boardroom meetings. And while investors may be interested in the pitch, talking about it for more than a minute or two is not appropriate. Doing so may put a bad impression on the part of the investor, therefore losing a possible deal.

Business owners must keep in mind that they should save the talk during an actual pitch.

Long presentations

During the actual presentation of the business, PowerPoint presentations are often considered as God-send tools. It provides the people around the room some visual information that could pique their interest on the topic being presented.

However, business owners must keep in mind that PowerPoint presentations are used as support and are not meant to be the star of the show. Therefore, entrepreneurs must be able to limit the length of the PowerPoint presentation so as not to bore potential investors.

These people want business owners to talk about their business startups and not just read from a prepared presentation.

Made-up proposals

Business owners want to impress potential investors. However, putting wrong information on the investment proposal, for instance blowing up the exit figures to impossible proportions, often raise eyebrows of investors.

Entrepreneurs must remember that investors value business owners who present them with the reality more than those who make-up information just to impress them.

Early discussion on valuation

Investors often turn their backs on business owners who start they pitches with valuation. Before doing so, business owners are expected to introduce first the business and its operations. Investors are there to provide money, but they would rather hear about the business first before getting information on the valuation which is, technically, their expertise. There is no need to walk them through on this process.

These are just some of the things that business owners must avoid when pitching their businesses to their potential investors. Following this would make them one step closer to getting some financial 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

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Guidelines For Successful Postings

Guidelines For Successful Postings

Rules and Guidelines For Successful Postings

Posting your Funding request is essential part of raising capital as creating your Business Plan. In order for you to get the funding you should be able to catch the eyes of the investors. Here are some tips you can follow to attract Investors and funding providers.

Title. Make your title attractive this is the first section our investors will see. Include the title of your business or invention. Make it enticing and give them something they want to hear and continue reading to your letter.

Posting. Write a short summary of your Business idea or Invention that will catch investor’s attention. Make it 2 to 3 paragraph short and make it concise and simple. Avoid too much information and do not copy and paste your Executive Summary. Your posting is not to be confused with a chat or blog. You are selling you and your business to investors and funding providers to raise capital and any posting that is not about your business is not allowed. Remember, concise and to-the-point.

Attach your Business Plan or Executive Summary. If you are looking for an Angel Investor or Venture Capital make sure you attach your Business Plan don’t wait for the investors to ask your Business Plan. Remember your Business Plan is the eye view of your business/invention.  If you don’t have a Business Plan yet at least upload an executive summary.  (You can use the Free Executive Summary template available upon creating your membership). This will give the investor the immediate reaction that you are serious in getting funds.

Private or Public posting. We have two ways of posting your request either public or private post. If you publically post be aware that everyone who not a member of funded.com will see your postings. While private posting only our registered investors and funding providers can see your funding request.

Avoid Personal Information. Even though we pre-screen funding providers, it is an ever increasingly large group and it is ultimately up to you to protect yourself from anyone saying who they are not and promptly reporting any concerns to us. Therefore we suggest not putting your email or telephone number on a public post. Private postings may not have the traffic like a public posting but is limited to our investor network that is viewing your funding request. Keep in mind that if there are investors that are interested in knowing your business venture they can always email you via funded.com and you will receive an email notification on your personal email if they replied on your posting.

Be patient for responses give some time to our investors to see your request. If you are not getting any responses try to re-write or revised your posting. You may also call us and we can look at your posting and give you tips for success.  Try to be more creative and remember you want to create interest in your business or idea and sometime it takes time for investors and funding providers to notice you, especially the right one that will fund you.

 

 

 

Five Common Mistakes When Pitching to a Potential Investor

Five Common Mistakes When Pitching to a Potential Investor It’s not often that business owners get the chance to pitch their startups to potential investors. Unfortunately, rare as the chances were, many owners fail to grab the opportunity that was given to them by committing serious mistakes that drive the investors away.

Here are the five common flaws committed by owners when pitching to potential investor:

Answering the wrong questions

Most of the time, the bulk of the discussion between the entrepreneur and the potential investor are centered on the description of the business and its operations. Unfortunately, most investors are not primarily interested with the “what” and the “how” of the business. Rather, they are more interested in hearing the answer to questions such as, “What will they get once they invest in your business?”

Failing to know more about the investor

Business owners who are desperate for financial support tend to grab every opportunity that they see. This is a very wrong thing to do. Sometimes,

Educate Your Investors: Effective Ways to Secure Business Funding

Educate Your Investors Effective Ways to Secure Business FundingSecuring the nod of potential investors such as angel investors or venture capitalists is not an easy job. Most of the time, they have the money but they are not familiar with the industry that your working for. Prior to pitching your startup, it is important that you have some idea on how you will respond to the queries of your potential investors.

Be ready to answer questions such as: What is the scope of your industry? Why should I invest in your company? How much will I get when I fund your business? What is your edge over other companies?

Being prepared to answer such questions will greatly improve your chances of securing business funding. The key is simply to make the investors understand your industry and where you are coming from. If you do that, there is no doubt that you will be able to get the venture capital that you really need.

Aside from being able to respond to the questions thrown at you, you should also try to observe the following tips on how to effectively educate your potential investors about your industry:

1. Explain your industry in a familiar manner – It is important that your potential investor understands your industry. And you can only do that by explaining it to him or her using a familiar context. For instance, if your industry is something that concerns e-commerce, then you might want to explain it by using a relatively known concept such as trade or marketing.

2. Avoid jargons – When talking about a concept that we are knowledgeable of,

National vs. Community Banks: Where to Apply for a Small Business Loan?

Posted by admin in investor, Small Business on 08/20/2012

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For small business owners, getting a loan from traditional lending institutions such as banks is very difficult, if not close to impossible. This assertion, however, is contrary to the claims of bankers who insist that the number of loans granted to small businesses have already increased. So who’s telling the truth?

Initial survey of the situation shows that a lot of national banks have decreased the number of loans granted to small companies and startups. Moreover, some small business credit cards also decided to close its customer accounts.

However, on the other side of the spectrum, a survey of lending conducted by the Federal Reserve revealed that the condition in most cases has already loosened. In addition to that, Small Business Administration also showed an increase in the volume of loans granted to small business. Community banks added that they are ready to accept applications from those who were shunned by the larger banks operating nationwide.

So on one side we have information saying there is a decrease in the number of loans granted to small business, while on the other we have contradictory figures that show an upward trend. The question is fairly obvious, how is that possible?

Observing the data provided might be the key to this phenomenon. Indeed, large national banks are turning away a lot of loan applications in an apparent bid to preserve their capital. On the other hand, however, smaller banks that have traditionally made a living on small business loans still approve a lot of application. In a nutshell, it appears that it is still business as usual for the community banks.

This claim is proven by a survey conducted by Barlow Research Associates which showed that small companies that are applying for loans have higher chances of getting credit in smaller community banks than in larger national banks. This information is essential for small businesses out there

According to several bankers, the lack public knowledge about this issue led to a number of complaints from small business owners who insist that there were no loans available. Surveys even revealed that many have insisted on this assumption even if they have not applied for credit in the past year. A bank official said that the idea that there were no available loans may have been seeded by those who were turned down because of the usual banking reasons.

Whether there is a credit crisis or not, small business owners should know the usual business measures implemented by lending institutions such as debt-to-equity ratio and net margins. Moreover, they should be able to provide satisfactory information with regard to how they plan to use the money in case their application is approved.

Moreover, bankers and potential borrowers alike note how the human element in the agreement is as essential as the technical aspects of the lending market. After all, establishing a good relationship with the banker would help small business owners in their bid to get their loan applications approved.

Nevertheless, despite the looser lending system in community banks, small business owners should keep in mind that their applications will still be scrutinized, especially by the banks that have started to adopt the formula used by the national banks.

 

 

More detailed information and useful advice can be found at 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.

Don’t Be Nervous When Pitching Your Business Plan to an Investor

Posted by admin in angel investors, investor on 06/20/2012

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Selling a business plan to an investor can seem like an intimidating proposition. Many entrepreneurs are skilled at product or service design and development but shy about presenting the concepts in order to land funding. Let’s face it – designing and selling are two very different activities. One takes know-how and specialized training while the other requires high quality communication and presentational skills. Blending engineering genius with selling savvy is not always easy.

Making a business plan presentation to investors is not difficult, but it does require preparation and rehearsal. It’s probably safe to say that most small business startups are not comfortable making a pitch to experienced investors. There’s always a fear of saying the wrong thing, not adequately conveying the passion for the business, or of looking foolish.

Feeling nervous is natural unless you are a professional speaker. Overcoming the nervousness is important though because investors expect the business owner to be comfortable enough to present the business plan. If the thought of making a business plan presentation puts fear in your heart because of the importance of the meeting, there are several things to keep in mind.

First, you need to prepare the presentation well in advance and practice, practice and practice some more. Even if you are highly confident about your ability to make a presentation, you still need to practice because this is too important to leave to chance. Second, the presentation needs to be streamlined for the investors. The business plan has the details of the business documented. The presentation should be reduced to a two page summary and no more than 15 slides.

That goes back to point one. Capturing a business plan on 15 pages without resorting to stuffing as much information as possible on each page is more difficult than it may sound. That’s why you need to prepare the presentation long before meeting with investors and then practice, practice and practice some more.

It’s true what they say – practice really does make perfect.

Browse www.funded.com for more advice about getting your business funded.

Turning a Good Idea into a Prototype Can Attract Investors

Posted by admin in angel investors, investor on 06/18/2012

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When you are looking for investors to fund the manufacturing of a new product, it’s a good idea to have a prototype ready. A prototype by definition is a preliminary model or early sample of a product. It can be used to test a particular concept to make sure it can be turned into reality or can serve as the first sample of something that will be copied once funding is obtained.

Investors like prototypes because it brings a concept to life and proves that the concept is doable. It serves as proof that the business idea can be turned into a practical product that can be sold to customers. A prototype also proves that the entrepreneur or business has fully developed a concept and that the investors are not being asked to fund a pie-in-the-sky

A prototype should be market tested to prove that the product fulfills a customer need. That is like gold to a business and a business plan. Presenting a product that has been tried and accepted by potential customers greatly reduces the level of risk associated with a startup operation. However, small startups should not make the mistake of only testing the product on family and friends and need to introduce the prototype to the real target market. The business plan can include a report on the market testing to accompany the prototype itself. By validating a prototype, the business has tangible proof that the product can be manufactured, the materials are available, and the product design is workable.

Given the competition for investors, developing a prototype can give a business a competitive edge. Prototypes don’t just apply to manufactured products either. Startup software companies and websites develop prototypes to attract investors too. The key is to develop the product to the stage where the investors can easily see its potential success in the marketplace.

More detailed information and useful advice can be found at 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.

What Investors Want to Find in a Business Plan

Posted by admin in angel investors, investor on 06/15/2012

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Entrepreneurs listen to professionals working with investors tell them over and over again that they need to develop a business plan. Instead of getting help, some managers finally develop one on their own, but it doesn’t take long to figure out that it lacks real effort. Investors are savvy and have read hundreds of business plans so recognize when a plan has been assembled in a haphazard manner.

In other words, you can’t fool the experts. A business plan lacking quality reflects a lack of concern about the business brand and on the business owners and management. A poorly designed business plan also sends a message that the business owners have not taken long range planning seriously and so casts doubt on the ability of the enterprise to succeed over the long term. It will be almost impossible to attract investors with this kind of business plan. Investors need confidence that their funding will be used in a successful business model that will earn the return expected.

What constitutes a poor quality business plan? First, they typically leave out important sections like the market analysis. Secondly, a plan that is poorly organized and difficult to read makes it nearly impossible to find information, and that discourages investors. Third, a business plan filled with typos and grammatical errors indicates that no one read the plan more than once or that it was written quickly with little thought. Fourth, a plan with inadequate research and lacking data and facts that can be verified will also turn investors away.

If you want to ensure investors pay attention to your business plan, then you need to pay attention to it too. To get the attention of investors, entrepreneurs need to develop a solid plan that reflects thoughtfulness, research and long range planning.  A high quality business plan is a blueprint for success, and that’s exactly what investors are looking for – success potential. If you are not comfortable writing a business plan then the first step to take is getting experienced help with the preparation. There is just too much riding on the business plan to do otherwise.

Browse www.funded.com for more advice about getting your business funded.

Ready to Compete Globally? Time to Find Investors!

Posted by admin in angel investors, investor on 06/13/2012

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More and more businesses are looking for investors to fund a global expansion. More and more investors are looking for businesses ready to go global. The business landscape is changing rapidly, and small businesses are expanding internationally right along with the big corporations. The internet can probably be named as the primary motivator for this trend because it made it so easy to communicate with people around the world. Orders can be placed with a click of the mouse. Governments recognized the opportunities this created and have created laws and regulations that promote global business.

Naturally, investors want a piece of the action. They are looking for companies that can successfully expand through globalization because the opportunities are unlimited. Of course, participating in international trade can be expensive so it’s not a decision made lightly. Yet there are so many advantages to expanding internationally that it makes sense.

What are those advantages? For one thing, a business can increase sales and thus profits which makes the company more attractive to investors. Other reasons include gaining greater market share, spreading risk by expanding market access, stabilizing seasonal sales cycles and establishing a foundation for unlimited growth. All of these reasons are exactly what can make a business attractive to investors.

Of course, expanding globally takes money. There are import and export fees, expanded production costs, higher shipping costs and the expenses associated with new promotions like marketing and travel. Investors will balance the higher costs to the expected increase in revenues and profits before making a decision. Investors will also weigh the risks associated with the global expansion. This balancing act though is one that the business should have already mastered in the business plan.

More detailed information and useful advice can be found at 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.