Note from Editors:
An entrepreneur must go through this 10-point checklist first before starting to seek funds for his/her #startup. Only after satisfying most if not all of these requirements that the entrepreneur will be able to decide if it is time to raise funds from venture capitalists, angels or #crowdfunding platform.
by Jayson DeMers
You’ve got an idea that you’re excited about. You’ve talked about it with your friends and family members. You might have even quit your job to start exploring the possibilities of #entrepreneurship. You’re on the verge of getting your company off the ground, but to do it, you need capital, and you can’t front all the money yourself.
Your natural inclination is to go out and start seeking funding as quickly as possible so you can build some momentum for your #business. That level of passion and enthusiasm is admirable, but if you start seeking funding before you’re ready, you could end up wasting your time and heading toward disappointment.
Before you go out to seek funding, whether that’s from an angel investor, a venture capitalist or through a crowdfunding platform, make sure you’ve satisfied all the requirements of this checklist:
1. A completed business plan
This is the first item on the list because it is, by far, the most important. Without a business plan, you can’t have a business. It’s the foundation on which your enterprise will be built. Accordingly, it may contain some, all or none of the points below, so keep that in mind when you put it together. Your goal here is to present an overall summary of what your business is and how it’s going to make money.
2. Market research
Market research is the verifiable data that demonstrates the need and viability for your idea. Without it, your idea may only be good in theory. You might have to pay to get access to the data you need, or perform some research yourself, but you need to have this numerical grounding if you want to prove your potential worth.
3. Financial models
These should be a natural part of your business plan, but don’t underestimate the level of detail required by most savvy investors. You’ll need full spreadsheets of projected costs, acquisitions, sales and revenue, including your profit margins, growth rates and when you expect the business to become #profitable. This is going to be the proof that your business can actually make money.
4. One-, three- and five-year plans
Don’t focus exclusively on how you’ll build your business from the start. You’ll need to chart out your projected growth over the course of the first year, the first three years and the first five years. Most investors want a long-term solution in a business with staying power.
5. Potential customers
Your market research should prove a theoretical customer base for your idea, but potential customers will drive your point home. If you can acquire at least a handful of testimonials from your prototypical customer or a major client that’s interested in your idea, investors will be much more interested in working with you.
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Curated from Are You Ready to Seek Funding? This 10-Point Checklist Will Decide.
Note: Featured Image credit to finkernet.com