So you’ve got an idea for a business and you’re eager to move forward. How much start up funding do you need to get going?
Slow down for a moment. Before you even consider seeking start up funding for your idea, think about this:
Does this mean you shouldn’t proceed with your start up? Not at all! It just means you need to have a solid plan in place before you start approaching investors.
Read on for three helpful tips about start up funding that will get your business off the ground.
Create a Clear Business Plan
Before you secure funding for your start up, you need to have a solid, validated business plan in place.
Your written business plan should include:
- What your business will do
- What your business stands for
- What your product or service will accomplish
- What makes you different from the rest
It’s also crucial to validate your business idea. You may think your idea is brilliant, but is there a need for it on the market? Will it sell?
Before an investor gives you a cent, he needs to know your idea will work. Set up a professional website with an online shop or blog to determine public interest. You might also consider crowdfunding and market research.
The more you can prove your idea will be successful, the more likely you are to receive the start up funding you need.
Know What Stage You’re At
The term “start up” implies nothing has started yet. But is that really the case?
Here are the four stages of start up businesses (and what type of funding you can expect in each stage).
This applies if you have no organized company or products. Few investors will contribute at this stage, but if they do, you could use the funds for market research or sample products.
Start Up Capital
If you have sample products available and at least one full-time principal, you’re officially a start up. Funding at this stage might cover recruiting management or finalizing your product or service.
Early Stage Capital
This describes a company with a management team in place and a few years’ worth of sales. Capital funding at this stage may help you reach the break-even mark or improve productivity.
If your company is well-established, expansion capital can take it to the next level. Investors at this stage can help you improve your marketing efforts or expand into new markets.
How Much Start Up Funding Is Enough?
We all dream of an investor handing us millions for our start up idea.
But how much money do you actually need to get started? The answer is probably less than you think. If you
If you get too much funding too soon, one of two things will happen. Either you’ll have to give away more equity than you planned, or you won’t be able to afford the money you think you need.
Our advice is to start small and get the ball rolling. You can always seek more funding at a later date, once your company has some momentum behind it.
Whatever stage your start up is at, you won’t get very far without a professional website for your company.
We invite you to learn more about us and the many design services we offer for online businesses.