Develop a Good Business Plan to Obtain Business Funding

The following are key things to keep in mind when structuring and obtaining Business Finance, and Raising Capital through Venture or Alternative Finance. Keep these underlying strategies in mind, your business funding quest will be much more successful.

Prepare Good Comprehensive Business Plans

Ensure your Strategic Plan process encompasses your Product or Service Development, Marketing Analysis and Marketing Plan in order that your Financial Plans and Statements develop a Financial Strategy which is realistic and achievable.  This will go a long way in obtaining the Funding your Company requires.

Find the Right Mix of Equity and Debt

I recommend you self-fund and use private investment funds for 10-20% of the total required Company funding, using this money to initially develop your Company to a point where Venture Capital Funds and Commercial Lenders are more open to the opportunity.  This will significantly abbreviate your Funds Acquisition time and obtain better Finance Structure and Terms.  A great Finance mix could be:

• Founders and Angel Investors Cash:  20%
• Venture Capital Early Stage: 20%
• Bank Finance: 30%
• Other Commercial Finance: 30%

The lower the Founders and Angel Investors Cash percentage, the more Venture Capital you will need, which in turn will require more Equity Sharing and less Control of your Company’s Board of Directors.  Positioning your Company with an initial 20% Cash Investment, minimizes the strain Finance can have on a Growing Business.  A 20% Cash Investment will develop your Company to the point which a VC Firm will be interested in your opportunity, leading the way to more Conservative Bank and Commercial Finance.

Do your own Funding Source Research

• Utilize networking and connections
• Compare your results to what an experienced Loan Broker can do for you.  Choose the best avenue.

Don’t Excessively Shop your Deal

In my experience as  Small Business Consultants, I find this a common mistake among companies. Excessively shopping your deal around commercial finance and venture capital sources will show you are not serious in obtaining funding from a particular source. Keep your funding initiative targeted. This also holds true in  Business Turnaround Strategy situation.

Be flexible in your Finance Negotiations but Protect Yourself

Be open minded when assessing Funding Offers but be sure not to accept a term sheet if it is prohibitive to your business plan and funding strategy.

Close the Deal if it Matches Up with your Business Funding Strategy

If the proposed funding does not match up with your Strategy, utilize your back up sources or explore Alternative Forms of Finance, using the Alternative finance on a short-term Bridge basis to buy you time and secure the funding better suited for your strategy.

About The Guest Author – Frank Goley, Business Consultant for ABC Business Consulting

Frank Goley works for small and medium size companies in the capacity as an experienced business consultant, business turnaround consultant, business plan expert, business plan writer, business coach, small business consultant, business planner, marketing consultant, online marketing consultant, seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 135 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog and publishes the Business Success Newsletter.

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