April 30, 2013
So you have your business idea in place and you are ready to move to the next step. What many entrepreneurs and new business owners don’t think about is their personal financial situation. Personal finances can mean the difference between success and failure in business. Here are some tips to ensure you are adequately prepared to move on to your business.
1. Have cash available for professional services – Just like everything else in life, starting a business takes money. You’ll likely need professional assistance on your business plan and legal advice from a good business attorney. These services are generally needed prior to you receiving any funding, so therefore, they must come out of your pocket. If you can’t afford these services, start saving now and wait until you can before trying to go in to business.
2. Have money in the bank to live on – Many investors and bank officers don’t like to have business owners take money out of the business, including a standard salary, for the first several months of business operations. If you can avoid it, it’s best to have money in the bank and take no salary at first. Instead, by keeping the money in the business, you can provide yourself with the best opportunity to really make it big, for you and the investor.
3. Continue to work and bring in income until you can’t anymore – While we all want to quit our jobs right away when we have a good business idea and want to work on it full-time, this in many cases can be counter-productive. Until your business needs you full-time, don’t leave your current position. It’s better in the long-run to build up your personal financials. Instead, work on your business when you are not at your job and find professionals who can be more efficient on certain tasks, such as the business plan and addressing legal concerns.
4. Pay off your debts and work on your credit score – Just like all other loans, having lower debts and a good credit score are important. While this isn’t nearly as important to an investor, having less debt and lower payments will allow you to work more and take less from the business.
By following these simple tips, you can prepare yourself financially for jumping in to your new business.
Tagged business plan, financials, startup financing |
March 6, 2013
We have all heard it. “Oh, if I had only acted on that idea back then, I’d be rich.” Or, “I had the idea in my head but never acted on it.”
Many people who say these things are not true entrepreneurs or they simply haven’t trained themselves to trust themselves just yet. While normal people sit on the sidelines and wait for things to come to them, entrepreneurs are out finding solutions for everyday problems and making a great living doing it. It’s not all riches and glory; in fact, it’s a lot of hard work.
Overall, true entrepreneurs have a “can do” attitude and make things happen. We move forward to study concepts thoroughly to determine the right method for going about the business, generally through the course of putting together a business plan. True entrepreneurs aren’t afraid to pay to have it done right in order to maximize the return on their investment and give them the best opportunity to succeed. That business plan then doubles as a tool to achieve capital investments to move forward. All of this while the fake entrepreneur sits on their couch and waits for their big break (which normally never comes).
As an owner of a business plan development company, ideas and business concepts come across my desk every day. Some of them are truly terrific ideas, ones that solve real world problems and provide incredible solutions. In many cases, nothing ever comes of these ideas, because they are simply in the hands of individuals who are unmotivated to move forward. It’s disappointing to me because I know these ideas can help people to better their lives and make the business owner a good amount of money. Instead, they are simply ideas, and never become a reality.
When you have a great idea, whether for a medical breakthrough or a physical business in your local community, I encourage you to not let it waste away. Act on it. Study it. Plan it. Can you make it work? Can you be profitable? Sometimes the answer is no, and you go back to your current life. Sometimes the answer is yes, and you may have changed your life forever. You’ll never know if you never get up to give it a shot.
Tagged business plan, entrepreneur, motivation, seize the opportunity |
February 2, 2013
I talk to a number of aspiring entrepreneurs every day, and a number of them have the same problem: They can’t get needed funding to start or grow their business. “There just isn’t any money out there,” they say. In reality, there is money out there, and the competition to get it is greater than it’s ever been. Many of these entrepreneurs or current business owners have a business plan, but just any old plan won’t do anymore.
Here are the top 5 reasons why your current business plan probably isn’t good enough to get what you need.
1. It’s written for the wrong audience – Many business owners make this very simple mistake – they write the plan for the wrong audience. Keep in mind who the reader will be. Is it an angel investor? A venture capital firm? The landlord? Each of these individuals will have different requirements and different information they want to get out of the plan. You must remember that the investor may not understand your industry or product. You have to explain it to them in terms that they can understand. Get technical enough to show your knowledge, but not so technical that it is over someone’s head. It’s a tricky line, but the experts know it.
2. It hasn’t been updated or has outdated research – I get a number of business plans sent to me each week that are old and outdated. Financial projections that start in 2011 and research from 2009 doesn’t cut it. Don’t you think our economy and financial picture have changed a little since the end of the 2000s? The plan should contain the latest research and findings to better indicate the real market and industry for investment purposes.
3. The financials aren’t realistic – Can you really make $2 million profit in the first year? Financial projections are exactly that – projections. But, they must be reasonable, contain all of the costs that will be absorbed by the business (plus a miscellaneous expense allowance), and they have to be in line with what similar companies are doing out there. If you don’t know what other companies are doing, research it. This should be in your Competition section of your business plan anyway.
4. The plan doesn’t clearly outline the business concept – Your business plan is your pitch to the investor and an opportunity to show someone with money available that you can do it. It’s a chance to prove that your concept works. There is no other aspect that is more important to the plan than to have a detailed concept description, many times in the lamest terms, so that the investor understands what you are trying to do. Don’t be vague…explain! If you can’t explain it on paper with as much time as needed to prepare, how are you supposed to sell it in a pressure situation to a potential investor?
5. The plan is too short or too long – A good rule of thumb for most business plans is to be somewhere between 20 and 40 pages. Sure, that’s a big gap. Every business (and business plan) is different. Don’t bother taking a 10 page business plan to a venture capital firm. At the same time, they don’t want to see a 95 page document either. Keep it to the important information only with as much detail as possible on the business operation and why the company will be successful. Knowing what to include and what to scrap is best done by experts.
Tagged business plan, business plan help, business plan problems, top 5 business plan |
January 9, 2013
This is one of my favorite times of the year. 2012 is gone and motivation to make 2013 even better is in the air. The gym is packed (if you can even find a parking space so you can make it inside). But the best part…. The number of potential entrepreneurs getting the motivation to really get started on that idea they’ve been thinking about for a while now is at its peak.
Companies like Optimus are swamped this time of year, trying to keep up with the calls and emails from entrepreneurs ready to give it their all in 2013. It’s refreshing, exciting, and motivating for us too.
What we hear a lot is that entrepreneurs get trapped in corporate environments or find themselves comfortable in a traditional medium-income job. Rather than working on their idea and trying to better themselves, many simply just go through the motions of their everyday lives.
That’s what makes this time of year different. People, especially the entrepreneurial type, get very reflective around the start of a new year. It’s an opportunity to better yourself, your life, your income, and your happiness.
What you don’t want to do is be like a number of those that join the gym. They go 2, 3, maybe 4 times, and that’s it. Then, they slip back in to their comfort zone. It’s easy to do. We’ve all been there.
Getting your business plan done is one of the best ways to set yourself up for success in 2013. It will make the year memorable, probably a little bumpy, and a lot of fun. Make 2013 the best year yet!
Tagged business plan, new year plans, New Year's resolution, resolution |
December 19, 2012
One of the most common mistakes I see among aspiring entrepreneurs or small business owners looking for financing is a failure to view their business plan as an investment – a tool to be utilized to achieve further investment in their business.
The business plan is your sales pitch, a guide that helps a potential investor or loan officer understand your concept, your vision, and the financial picture. Most importantly, it gives the investor an understanding of what’s in it for them, and what you are contributing to ensure the success of the venture.
I see a number of business plans that are rushed through, using poor pre-designed templates or lacking adequate research. A good business plan can’t be developed in a few hours or days, or even a week. Business plans take hundreds of hours for most entrepreneurs. Even the most skilled writers will still spend dozens of hours working on a business plan.
Don’t rush through your plan just to get something to an investor quickly. Take your time to ensure you have all of your bases covered. If you have your plan developed professionally by a firm such as Optimus Business Plans, make sure that company is writing your plan from scratch and spending time doing research to enhance your plan. Unfortunately, too many people/firms skip over the important steps to be more “efficient,” only to come up with a document that that will never get funded.
|
