Business Opportunities – How to Get Financing Page

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Many entrepreneurs have a great idea, but do not have the funds to take their idea from a drawing to prototype and on into production. Try as they might, obtaining seed money to launch new business opportunities is a tough business and if you do not have all of your homework done, chances are you will be turned down even if you have the best idea to come along. So, what are the attributes that are needed for someone looking for seed money and what tools and reports do they need to have to convince someone that they should lend them money to launch their new business? We will try and uncover some of these in this article.

Whether you are looking for large sums of money or relatively small levels, getting seed money to get started depends on several factors. Primarily there are two that are extremely important to your success. The first is your belief in your concept and your ability to sell your idea. Entrepreneurs must have faith and strong belief in what they are doing. If they are not sure of their business opportunities, why would anyone be willing to lend you money? Often entrepreneurs are fanatically confident and have very strong feelings about their opportunity. In addition they must be able to communicate their concepts and ideas to both customers and people who may be interested in investing as well as lending money to you.

Develop a clear message that describes your business opportunity, how the funds will be used and most important how the investor will be repaid handsomely for his or her investment. They are lending funds to make a profit and they need to be convinced of the concept as well as the probability that they will get their money back with a high potential for profit. If you cannot explain these factors then you are unlikely to receive investment funds based on your commitment to the opportunity alone. This leads us to the second aspect that all new business people must consider to launch their business opportunities.

Although many people will consider the financial aspect of your business opportunity as secondary, it is actually very important. Investors, whether they are your friends, family or money lenders need to understand the development costs, the start up costs, were the revenue will come from, what will it cost to produce and operate your business and most important when will your company turn cash flow positive and profitable. All of this information is normally documented in an income statement and cash flow reports, combined with supporting assumptions.

Be prepared for investors to conduct sensitivity analysis on all business opportunities. If you have not completed this analysis, rest assured that they will. Usually all revenues will be reduced by up to 25% and all costs will be increased by 25% to see what will happen to the end result for your cash flow etc. Business managers may as well complete this analysis up front and have it ready for their presentations.

This has been a brief assessment of “how to get financing for your business opportunities”, however having these two items, “confidence in your idea” and a “well thought out financial plan” completed will put you in a positive light when it comes to finding financing.

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This page was updated on Nov 2009 and is Copyright © 2003 by Global Com Consulting Inc.