As a small business owner you might agree that coming up with the idea for your business was a piece of cake. Financing the business, however, is an entirely different story! Sometimes you may only have very few opportunities to present your business for funding, so it’s your job to make sure they count! Here are five strategic steps to help you fund your business and get to the next level before you start pitching to potential investors and lenders.
1. Put Your Money Where Your Mouth Is – You have a great idea, product or service that everyone will love, huh? So how much of your personal funds have you invested in it? Expecting a bank or investor to come in and save the day when you haven’t spent all that you can to make it happen is a bit naïve. If you haven’t bet the farm on your idea, then don’t anticipate anyone else to.
Last year I attended a White House forum on entrepreneurship where Tyler Perry gave the keynote address. During the Q & A, participants lined up to ask about how to find investors or receive access to capital. Without a blink, Perry reminded the audience very firmly that he was his first investor. The early part of Perry’s career was riddled with one failure after another. Luckily, he didn’t fail on anyone else’s dime. Imagine flopping in a business you truly believed in and then having someone else breathing down your neck and demanding their money back. Perry also brought up the point that putting up his own money allowed him to ensure that the business wasn’t so financed to death by outsiders that when his opportunity to get true buy-in came, he no longer controlled any of the rights.
2. Understand Your Options – Bank loans and angel investors are not the only options for financing a business, but it’s hard to tell until you are first clear about a few things. Make sure you can answer questions like “For what specific purposes will any capital be used?,” or “What is the current economic state of your industry as a whole?” You can find a complete list of sample questions on the Small Business Association’s site under “Determining Your Financing Needs.”
Without knowing fundamental questions such as these, you could be wasting time in all the wrong places. For example, you may find that you qualify for additional resources, such as grants. While grants are often seen as “free money,” many of them come at a price. You may be required to match the funds which you can hold as leverage with other investors or you may have to combine the funds with a business loan. But that great possibility is worth the effort of truly knowing your business well enough for you to search for additional creative financing opportunities.
3. Confirm There Is a Need – If you’ve ever watched ABC’s hit show, Shark Tank, it never fails that one of the sharks, aka wealthy investors looking for entrepreneurial endeavors to invest in, always ask one of two questions when they believe a product may have potential:
“How much have you sold?”
“How much money have you made?”
They are simply trying to assess whether there is really a need for the product or service. You’ve gone to the trouble of taking an idea from conception to reality because you believed in it, but the proof is in whether or not you can get people you do not know to test the product out or more importantly, purchase it. Your market research will be key in this step. If you can’t get buy in from potential consumers, then there is a possibility that you don’t have the miraculous product you believed you had. And while we can talk about “how good an idea sounds” all day, if it doesn’t make dollars, it just won’t make sense to an investor, a banker or anyone else in a position to provide funding. . . . Which leads us to our next point . . .
4. Prove You Can Generate Steady Cash Flow – Remember, cash will always be king. It gives the potential financing entity a glimpse into your future of whether you will have the cash flow you need to pay creditors, employees and most importantly pay them back on time or at all for that matter. This is not the time to concern yourself with hiding income from the IRS. If you plan on applying for funding in the next 24 months, you’ll want to prove that you have the ability to make the most money possible. This means that you’ll need to keep accurate and clear financial statements, bank statements and yes, even tax returns. These documents make or break potential business loans daily. Think long term with your bookkeeping. Short-term thinking may prevent you from obtaining long-term sustainability.
5. Create and Implement Your Business Plan – It’s no secret; when searching for financing, the first statement you’ll hear has to do with drafting your business plan. What you rarely hear is that you not only need to have a written business plan, but that it should remain a “working” business plan that you can revisit quarterly to ensure it continues to mirror the business you want to create. A potential investor doesn’t want to blow the dust off of a plan you wrote two years ago when you first had the idea. Keep it current and keep it relevant so that the plan evolves as the business grows. The business plan should contain a forecast for your business with at least two scenarios: how you expect your business to perform if you don’t get any financing, and how it will perform if you do.
Also On HelloBeautiful:
100 Reasons Why I Can't Stop Looking At Blue Ivy
1. Mommy & Me
2. Blue. #May10 #NYC
3. Blue Ivy & Jay Z Sip Tea
Blue is surely the apple of Daddy's eye.
4. Blue Ivy & Beyonce Smell The Roses
Beyonce seems like the coolest mom.
5. Blue Ivy & Beyonce Soar The Big Skies
6. Blue Ivy & Mommy
7. Daddy & Me
Blue Ivy walks across mommy's at-home photoshoot, but it's the most adorable photobomb ever!
9. One Big Happy Family
The royal family, Bey, Jay & Blue are all out shopping and we're sure they spent our entire life's savings in 30 minutes or less.
10. Beyoncé, Jay Z & Blue in Beverly Hills — Nov. 11
Beyonce in these heels though?!
11. Beyoncé & Blue in NYC — Nov. 4
Look at Blue in her adorable little bow!
12. Beyoncé & Blue spotted in NYC — Nov. 4
Blue holding on to mommy for dear life.
13. Beyoncé & Blue spotted in NYC — Nov. 4
Momma Bey looking fierce with her mini me in tow.
14. Blue dressed as Michael Jackson.
15. Blue & Ivy
Just look at that face. Seriously, Jay could never deny this child! She knows how to make all his mean mugs!
16. Beyoncé, Jay Z & Blue in Beverly Hills — Nov. 11
Look at that cutie!
17. Beyoncé, Jay Z & Blue in Beverly Hills — Nov. 11
OMG Blue in a top knot? Yasss!
Blue has grown up to be an adorable toddler! We're swooning over this photo of her playing on the beach.
Looks like Blue is taking a walk in mom's shoes...literally.
20. Beyoncé & Blue
There's nothing like being cuddled up in mom's arms.
Blue is looking all kinds of adorable! Look at that left hand go! LOL.
22. Blue On The Big Screen
Bey & Jay look at Blue during a video played at an "On The Run" tour stop. How precious!
23. Pardon Blue's Back
She's growing up so fast! We're loving the top knot. Take that Blue Ivy hair critics!
24. Jump Around
Bey & Blue share an adorable moment on the trampoline. Hello summer!
25. Rocking Some Cute Ponytails
Blue Ivy was spotted with a new 'do! Bey & Jay's mini-me was holding on to her father during a little day stroll.
26. Strolling With Mom & Dad
Blue, Jay and Bey all spotted in East Hampton.
27. Blue Has A Manicure Day With Mama Bey
"Me and my Blue, and my Blue Blue, riding🐝"
28. Hanging Out With Mom
Baby Blue is walking to the door, and it looks like Bey is trying to keep up!
29. Trying On Some Heels
Will Blue be slaying a performance in the near future?
30. Holding On To Mom
Blue looks like she has something to say to Bey.
31. Playing A Game Of Tennis
Blue walks on the tennis court.
32. Cuddling With Mom
Blue & Beyonce have some much-needed cuddle time.
33. Blue Ivy
"The blueprint 🐝"
34. Bey & Blue Take A Stroll
Doesn't Blue look adorable with her colorful dress and cute hair ribbon?
35. The Carter Lounge Together
The family was seen out and about.
36. Jay Z Carries Blue While Bey Looks On
Jay carries Blue in his arms.
37. Leading The Way
Blue Ivy looks too cute with her bowler hat and Mama Bey watching from behind. She's really growing up!
38. Out On The Town
Blue Ivy & Momma Bey enjoy some much deserved time off in Spain.
39. Traveling With Mom and Dad
Blue is used to traveling with Mama Bey and Poppa Jay, but she also looked a little flustered at some moments. It's ok, baby Blue!
40. A Day At The Park
Poppa Jay Z lets Blue Ivy have her way with the bouncy horse.
41. It's A Family Affair
Beyonce, Jay and Blue jetsetting in Dublin.
Blue dressed up like a hipster and plays a quick game of peekaboo! How adorable!
43. OMG It's Blue's Beautiful Face!
FINALLY! We get to see how beautiful Blue is! Look at the adorable headband! "Blue 💙"
44. Blue Ivy
Life's a beach!
45. Brooklyn Stand Up!
"Beyonce & Blue"
46. Blue Ivy's Got Her Own iPhone
"Momma, what's your password?"
47. Beyonce's Lazy Day With Blue
"Momma, I asked you for your password!"
48. When Blue Ivy Takes Your Phone, Beyonce Be Like...
"Fine, I'll go ask Daddy!"
49. Blue Ivy On Tour
"Bey & Blue"
50. It's Playtime
Beyonce & Blue take some time out to play.
51. A Chilly Day In NYC
"Beyoncé, Jay Z and Blue Ivy in NYC - Jan. 19"
52. All Bundled Up
The royal family makes their way to their fancy car.
53. Kisses From Dad
Blue's all bundled up, getting love from Daddy.
54. Blue At The White House
Blue Ivy's taking after mommy and writing a letter.
55. Blue Loves Bo
The White House pup, Bo is showing Blue Ivy some love.
56. The Carters At The White House
Check out the royal family checking out the scene at the White House.
57. It's Christmas Time Again
Blue and Bey checking out the White House Christmas tree.
58. Blue Lovin' Bo
Blue Ivy, dressed like a Princess, showing Bo some love.
59. Like Father, Like Daughter
Blue playing dress up with Daddy's hat.
60. Fun Times With Mommy
Blue Ivy spends some QT with mommy.
61. Mommy & Me
Blue and Bey take a break for some snacks.
62. Silvery Blue
Beyonce carries Blue, while the adorable toddler rocks a metallic jacket that we want and need.
63. The Holy Grail
Blue, Bey & Jay
64. One Big Happy Family
"#miami #newyear #2014"
"Beyoncé & Blue 💙"
66. Blue & Daddy In A Blue Jacket
"Jay and Blue 💙 #NewYear #2014 #Miami"
67. Hold On To Me
"Happy New Year Mommy!"
68. Dora Dora Dora The Explorer
"Beyoncé, Blue and Dora the Explorer"
69. Daddy & Bey
"Look over there Blue, you own that too."
70. Blue's Big B-Day
"Mommy make sure they can only see the back of my head."
71. Painted Faces For Blue's Bday
"Let me get down Mommy, I wanna play!"
72. Kisses From Mommy
Beyonce and Blue prepping for Momma Tina's Masquerade Ball
73. Talk To The Hand!
Beyonce, Jay Z and Blue Ivy were spotted leaving Joey's restaurant in Miami, on January 8th, and Blue had a message for the paps! Talk to the hand!
74. Me & My Daddy
While Beyonce's arm rested, Jay carried Blue from Joey's restaurant, in Miami on January 8th.
75. Blue's First Words
"I'm ready to slay right along with you, Ma!"
76. Imagine The Sound Of This Lullaby
A newborn Blue Ivy gets serenaded by her superstar mother.
77. Don't Mess With Blue!
Every now and again, Blue Ivy reminds you...she is her father's child!
78. All Gold Everything
Blue Ivy takes after her dad's swag. The inseparable duo were spotted in South Beach, Miami illuminating the streets outside their hotel with their yellow luster!
79. All Of The Lights!
"Mommy! All the pretty colors are so blinding! I'm...just..so..overwhelmed! When's my shot coming?! When's my shot coming?!" Blue plays on set with Bey at her 'Blow' video shoot.
80. Hey Blue!
"I can be happy sometimes, see?"
81. Blue Ivy With Daddy
"Why are we clapping, again? I'm not in the shot."
82. Jay Z Tries To Get Blue To Listen To "Magna Carta Holy Grail"
"Daddy, I'm more of a Nas fan."
83. Stepping With Mom
"Wait, Ma. I want the camera to see all angles of this sick dress!"
84. Splashin' & Playin'
"Mom, this water is clean, right? Because I'm not trying to splash in water I can't trust."
85. Beyonce Discusses Important Matters
"Mommy, I completely get it. Yes, I promise to watch the throne."
86. Mommy's Hugs
"Ok, Ma. I love you to pieces, but I like oxygen too." Bey may be the Queen, but this scene from her video "Blue" makes it look as if she can't get enough of being Mom.
87. Blue Ivy Twirls
"Aaaahh, I'm having so much fun not thinking about anything...wiippeee...oh, wait...getting a little sick."
88. Just So You Know...
"I run things. Don't get it twisted."
89. Mommy & Me Loungin'
"Oh, Mommy, I'm so tired of seeing the wigs you snatched last night all on our floor. It's so exhausting. Like, when're they getting picked up? Not now? Oh. Ok."
90. A Kiss For Blue
"Mommy, let me sleep, dang!"
91. Slurpin' On That Milk...Slurpin' Slurpin' On That Milk
"Mommy, gimme that bottle!"
We could watch this adorable GIF of Blue Ivy nonstop forever!
93. Jay Sneaks In Kisses
"Dadddd! Get..Away!..I don't want...No, ugh..No kisses!"
94. Blue Stares Back...
"Hey! Who's that?!"
95. Blue Still Doesn't Get Why Anyone's Here
"No, really, who are you? You're getting to close."
96. Blue and Bey Out For Lunch
"I'm over this now. People just won't let us be. Mom, why can't we just be?!"
97. Blue Is One Tough Cookie
"Ma, please let me just kick them in the face. Like, please, I can't see through all these lights."
98. Blue Jetsets With Jay
"Dad, do we own this boat? I just figured we owned everything, so..."
99. Beyonce Keeps Blue Covered
"Mommy, I think you forgot my feet. I'm cold right now. Are we inside?"
100. Beyonce LOVES Her Blue
Look at that face, how could you not kiss it?!