(Newswire.net — May 9, 2018) — Entrepreneurship oils the wheels of commerce and is a major contributor to the US’s GDP. It’s never been easier to start a business, and it’s something that lots of people consider. Whether you are newly out of the military, fed up with working for your current employer, or fresh out of college and ready to start out on your own, launching a startup company can be a good option. However, it does come with some risks. Below are some of the things you need to know before you get started.
Don’t Skip the Number Crunching
It’s common for entrepreneurs to have big plans and wonderful ideas, but very little to back up their grand plans, and startup failure rate grows each year. Unfortunately, no matter how brilliant your idea is, unless you have the research and financial forecasts to reassure potential investors that you’re not building mud houses on a flood plain, your plans will probably go up in smoke.
Spend time and effort drawing up a comprehensive business plan. Cover all angles. Research your target market, your customers, and your competitors. Does your idea have legs? Can you afford to develop it? Will people buy your products? And, most importantly, how much money do you need to get this show off the ground?
Investors and lenders will want to see the figures in black and white. If you can’t produce a professional looking business plan, don’t expect them to put their money on the table.
Check Out Alternative Sources of Funding
Traditional sources of reliable funding can be found from a range of companies with different options including business loans from Become. However, if this doesn’t work out for you, don’t despair. There are plenty of other options these days, including plundering your own savings, asking friends and family to help, and pitching on crowdfunding sites.
Be aware, however, that if you elect to use a crowdfunding site, you will need to select one that is appropriate for your startup. You will also need to invest a significant amount of time and energy in creating a compelling pitch and interacting with potential investors.
Understand that Investors are Thin on the Ground
You may have heard stories of angel investors who come along, write a blank cheque, act as a benevolent mentor, and guide the business to success. Unfortunately, these people are thin on the ground and your chances of securing a $500k funding injection from a stalwart in the local business community are slim.
Investors will only stump up the cash if they believe your startup has the potential to make them money. Most investors will expect shares in the company, so if you do go looking for investors, be prepared to hand over a portion of your business.
Have a Plan B
Always have a Plan B. Investors may pull out at the last minute or the bank might decide your business plan has more holes in it than a colander. Either way, it pays to have a backup plan, just in case you’re all set to go, and something goes pear-shaped.