Getting a start-up business up and running is a challenging task, and a large part of that for many people is securing the funding. There are a few options available for funding your business, and you can read our previous blog post if you need some help with deciding which one is right for you. It could be much easier for you to secure funding once you choose the best route for you, whether that is securing a loan, an investor, or crowdfunding.
Lenders and investors are approached by lots of start-ups and they can’t fund all of them, so you need to stand out from the crowd. There are a few roadblocks people face that can prevent them from securing the funding they need – here are three of the most common and tips on how you can overcome them:
1. Lack of Experience
New entrepreneurs may have little experience or no track record to speak of, which can turn off potential investors. Investors are looking for people with experience so that they can feel comfortable that they will get a return on their investment. However, if you are new to the business world you can redeem yourself by making sure that your business plan is solid and you have a good business model.
2. Business Model Problems
Unfortunately, when it comes to the business model some entrepreneurs tend to fall flat. Your business model is your plan for successfully operating your business in order to generate revenue and make a profit. Business models can fail due to unrealistic expectations and a lack of foresight when it comes to identifying risks. You also need to have a realistic cost for acquiring each customer, but surprisingly not everyone’s business model lends itself to this. Your business plan should show that you are not one of those people.
3. Lack of a Go-to-Market Strategy
Where does your business fit in the current marketplace? A clear go-to-market strategy should help you to answer this question – you should be able to explain who your target market is and how you are going to reach your audience and increase it over time. Failure to do this means investors may not see the worth of your idea. However, you can avoid this by identifying your target market within your business plan, and writing a compelling summary of how your business and your product or service fit into your chosen market. If you can’t do this, it may be that you need to re-evaluate where your idea fits – is the marketplace too niche or crowded – do you need to make any adjustments?
cbm can help you to write your business plan and secure the funding you need – our senior consultant has over 30 years’ experience in writing business plans, and has also bought ailing companies with funds from Venture Capitalists in a previous role, in which he never failed to secure the funding required. Contact us using the form on the right or call 01604 420 420 to find out more.