Adding to the financing challenge is the plethora of high-quality companies, both public and private, in which investors can choose to invest. In this environment, more and more investors are asking companies seeking capital the question “Why You, Why Now”?

The question seems simple at first, but has many complexities. The management team must clearly delineate what it is about the business opportunity that makes it such a good investment now. Should this investment have been made a year ago to cement a market leadership position? Or, is the venture before its time - will slow market adoption cause slow sales over the next few years, and as such, should the investment wait. Questions like these, based on investment failures from the past few years, continue to surface and must be addressed by the management team in their business plans.

Likewise the team must address what it is that makes them uniquely qualified to succeed. Does the team have proprietary (and protectable) technology, management talent and experience that competitors do not, long-term strategic partners? According to Growthink president, Dave Lavinsky, “Management teams must prove to investors why they are unique and why they will succeed. They can’t just state how wonderful they are - they need to prove it through detailing past successes and unique qualifications.”

Consider Colm Dillon, the author of “Unique Real Estate Development Method!” (http://business.marc8.com/ebook-info.php/name/unique_real_estate_development_method/toc_id/6-0-2-8/). He has 30 years and $1.2 Billion worth of professional real estate development experience. Dillon wrote his book purely from experience and practical usage. His eBook is now selling in 63 countries and directly available on the Internet.

More and more shoppers are now buying books online. If you purchase a physical book that you have been dying to get your hands on you still have to wait for shipping and delivery before you can start reading. With E-Books you get instant delivery 24×7. No more waiting and watching the clock. While the inspiration and interest is hot, you get to download your favorite business book and start reading away.

Imagine, discovering an E-Book called “Business Plans” (http://business.marc8.com/ebook-info.php/name/business_plans/toc_id/1-0-1-6/) at 11.30 pm, decided to buy and download the book at 12.05 am, finished reading it by 2.00 am. The 10 o’clock meeting next morning, and you are already a guru on Business Plans and opportunities to lead you company to new frontiers.

And that E-Book is very easy to share with your spouse or friend, just email it. The E-book will never wear out for millions of years to come. Hundreds of thousands of E-Books can be carried in the palm of your hand no matter where you go in a flash-drive or portable disk.

These numbers are not made up. They are actual numbers from actual reported venture capital funding. I get these notices emailed to me day after day, rain or shine.

I’m not personally looking for business financing – but the entrepreneurs who read my website are. These numbers are a constant reminder to me that companies – lots of companies – are getting funded every day.

And these numbers just reflect the reported venture capital funding. There is probably double that amount from angel investment and unreported fundings, and millions more from the $16 billion pool that SBA has this year.

All in all, it’s a lot of money. That’s a lot of companies and banks and groups and individuals actively investing in small business.

So how come you’re still looking for financing?

Perhaps you aren’t presenting your company effectively.

Or perhaps you haven’t located the right lender.

It’s also possible that your concept just isn’t very good, but I doubt that. The fact that you are reading this article means you are a serious entrepreneur, with a serious business.

So where do you go to find all these investors? Here are some starting points:

For standard business financing, talk with the local office of the Small Business Administration.

It’s a new agency, with new programs and services, and lots of money to lend. Although much of the focus of the SBA is on minority business enterprises, the SBA still has a lot to offer non-minority companies.

Also talk with your local banks. (That was plural “banks”, not “bank”.) Talking with a number of local bankers will rapidly bring into focus the wide ranging priorities of the various banks, and where your company fit in.

As for venture capital and angel investors, there are several options.

One option is to go to online sources. There are a number of online services, such as VFinance, that sell the names and addresses of possible investors. It’s not expensive, perhaps $2-5 per name. The idea is that once you get the list of 200 or 2,000 names in hand that you will contact each with a written executive summary or business plan, and then wait to hear from one of them. This is a very passive approach, roughly akin to throwing paint on the wall and hoping that something will stick.
If you are like most entrepreneurs, patience is not your strong suit, so sitting and waiting for a response is not quite your cup of tea.

Another option is to go to one of the many directories of venture capital firms. These directories typically include addresses, phone numbers and emails, along with the geographical areas of interest and the types of investment that each is seeking. Most businesses can narrow down their list of prospective investors to several hundred venture capital firms this way. And again you are faced with the prospect of sending out written material for each one, and waiting for a response.

A third option is to take a more proactive approach. Identify your best prospects yourself from a number of reliable sources. Get introductions where possible. Learn everything you can about your target investors, and then go after it. Typically a phone call is the first contact, not an anonymous executive summary. Knowing that you are calling your best prospects, you know too that they are open to hearing from you. You have names, you have investment histories, you have everything in hand to make a real connection with the target investors. Then go do it.

Getting your company financed is one of the hardest things you will ever do as an entrepreneur. It can be hugely frustrating, disappointing and genuinely discouraging. But lots of entrepreneurs do it. And so can you.

Identity theft can have dire consequences. If a thief obtains someone’s social security number and birth date, he or she can then find out all kinds of financial information about the person and can use the person’s bank account. If this happens, the thief can spend all of the victim’s money, and the victim may or may not have a way of recovering the money. Identity thieves can ruin their victim’s credit by using the stolen credit cards to run up huge debts.

Corporate espionage is another serious problem involving information theft. More often than one might believe, employees steal secret business documents and sell them to competing companies. If thieves steal a business’ financial information, like credit card numbers and bank account numbers, they can spend all of the company’s money and possibly never get caught. It is vital to protect personal and professional information from would-be thieves by destroying documents and computer files that contain the information.

Paper shredders work by cutting sheets of paper into many very small pieces, making it difficult for thieves or corporate spies to reassemble the documents and gain private information. Some shredders cut the paper vertically into ribbons, while others cut the paper in a cross cutting motion, making it much harder to reassemble the page. These paper shredders have a number of features and many can provide maximum security.

File shredders permanently erase files from a computer. Most people think that emptying the computer’s recycling bin erases any files or programs that were in it, but the truth is that these files can be easily accessed using basic retrieval software. File shredding software ensures that sensitive files containing private information can’t be accessed.

Not all types of shredders are used to protect business or personal information. Chip shredders are heavy-duty tools used to break wood, leaves, and other materials down. Once the materials are shredded, they can be used to make mulch or compost.

Although you may have relied on cash transactions up to now, you might find that is becoming more cumbersome to make correct change, accept checks that could bounce, and track delinquent payments, all while keeping track of each and every transaction. Farming out some of these tasks to hired help can be costly, which is why you may be able to benefit from credit card processing services. If you conduct business onsite at a primary facility, you can plug in a credit card processor and start taking credit payments immediately, which are far less likely to bounce than personal checks.

But you will first have to open a merchant account before establishing credit card processing services. Look for a longstanding bank with a solid reputation, one who currently offers merchant accounts to dependable business owners like you. Then be prepared to provide the required documentation that shows a stable credit history and a reasonable business plan that depends on credit card processing services. Upon approval, which can come within a few days, you will be able to purchase or rent credit card processing equipment and start accepting credit payments from your customers.

Credit card processing services can be established at your company’s Website. You do have a Website, don’t you? If not, that is the second important step into the 21st century that your company needs to take. Hire a Web designer or sketch a few ideas yourself. It need not be fancy or sophisticated, but rather a basic outline of your company’s services or products along with basic operating information. Then you will need to register a domain name for a small fee and then pay monthly “rental” fees to post your site in cyberspace. Hiring a designer or someone to maintain and update your site will cost a little more, although often you can find a high school or college student who can do this type of work at nominal cost. When your site is up and running and your merchant account is approved, you are ready to open the Website doors to current and new customers for business. They can browse at their convenience and pay by credit card without human assistance at each juncture. You can make money and save money at the same time.

This important article will review the 5 top mistakes many
home based business owners make that might evolve into a great
success story.

Warning! This approach is not for everyone. One theory is readers
will learn a new way of thinking and perhaps propel their
business ideas into motion.

Let’s get started with the list!

1. Business Plans. Many article’s online vow by the
business plan. Every new business owner must draft a
business plan if they want to succeed.

One successful business owner online never thought of
drafting a business plan. He learned the hard way.
He made many errors but claimed the learning experience
was a powerful teacher.

He further stated the lessons he learned were better
than any course in business school or college. He soon
learned how to deal with the many ups and downs in the
business world. Dealing with frustration. All things
you learn from the school of hard knocks.

2. Education. Once again many experts think several degree’s
are the key to immediate success in any chosen field. Many
successful entrepreneurs never went to college. And quite
a few barely finished high school. Success is not always in
the books you read but in how you deal with your
business in the real world.

3. Rushing. Experts believe you should take your time
and wait to select the proper business for you and
your background or education. Taking time to study the
various ideas is key to success. Others see an opportunity
and immediately grab it.

4. Over confidence. Believing you will be successful and
ignoring negative opinions from friends and family. Family
might have good intentions, wanting to save you from making
an error in judgement, but they might throw a
wrench in your business idea. Halting the business venture
altogether.

5. Unrealistic view. Always seeing the good side. Thinking
positive. That yes you can succeed in this business. Positive
thinking is an asset every self employed business owner
should own. Many business owners with a positive outlook
continue striding forward where others simply give up.

Not every business needs a 200 page bound business plan. However every business needs to have some idea of where they want to go and how they are going to get there. This article covers some key insights into writing a business plan that get your business to where you want to be.

The first stage of any plan is ANALYSIS. You need to take a very objective look at a number of factors that may impact your business. There are many factors to consider but the two major ones are competition and your operating environment.

Let’s look first at competition. Every business has competition, even if you think your product or service is unique. How is this? Well it’s quite simple really, people have choices to make. The most fundamental choice they make in most cases is whether to buy what you offer or but something else. For example I could buy a game console or I could buy groceries instead. Customers only have so much money available so you first task is to ask yourself what is my competition like and can I beat them? The more you understand your competition the more you can develop your business strategy of being different and outperforming them.

Now let’s look at operating environment. This is understanding what factors around your area of operation are likely to affect your business performance. For some companies this includes looking around the World in other cases it’s just your local neighbourhood. You need to ask questions such as:

How is the economy going?
What is consumer confidence like?
Where is technology heading in my industry?

After answering all the questions you need to decide how these might negatively or positively influence your performance.

Now you know more about your competition and operating environment it’s time to set some OBJECTIVES. This is what you want to achieve in the period your business plan covers. It is said that good objectives are SMART. That is specific, measurable, achievable, realistic and targeted. Here’s an example of a SMART objective for a hypothetical business.

“By the end of this year we will have increased sales of product X by 7.5% over the previous year.”

You can see how clear this objective is. It is much easier to achieve high performance with clear objectives.

Now you need to outline your STRATEGY. How are you going to reach you objective(s)? This is where your marketing plan often comes in as it helps describe the programs you will run to achieve your desired objective(s). To continue the example above our strategy may be to gain distribution for our product in one new major retail chain.

To make your strategy work you must then allocate appropriate RESOURCES. Certain things will need to be provided to reach your goal. This could be dollars, people, equipment, etc. Your plan must have included the resources you are allocating and why you believe this is adequate to get the result.

Every business plans also has some PROJECTIONS. This is your basic financials that you plan will deliver. Are you expecting a profit or loss? How much?

Lastly you need to allow for CONTINGENCIES. Things change all the time and your plan needs to consider these possibilities in advance. A good way to do this is to ask What if?

What if a new competitor enters our market?
What if a distributor delists our product?
What if interest rates rise?

Your analysis should give you some idea of likely contingencies. It saves a lot of stress if you have some documented ideas for dealing with them before they become a big problem.

It is helpful to show other companies in your market, or similar companies in other markets, who have successfully exited, and how and why these companies were successful. For instance, were they successful since they acquired a large customer base? Or were they successful since they accomplished fast growth or high profit margins? It is also important to tie their success to their exit price. Was the exit price based on earnings or the number of customers the firm had at the time? The business plan should tie these metrics (e.g., exit price of $X per customer) to the business to determine its future price.

The most common exit strategies in business plans are IPOs or acquisitions. While the method of exit is not always crucial, the investor often wants to see the decision to better understand the management team’s motivation and commitment to building long-term value. If acquisition is the selected exit path, then the business plan should detail potential companies that might want to acquire the firm in the future and why. Likewise, if an IPO is expected in the future, the business plan should document the financial metrics of the company that make it ripe for this type of exit.

Who will read your business plan and why?

First you need to really understand the purpose of your business plan and who your audience (reader) will be. This is an important point as a business plan being written for a $100,000 loan is VERY different than a document needed for a $10 million round of venture capital! Since this article is focused on first-time small business owners, I will focus on preparing business plans raising less then $1 million in capital. For this “startup” or “seed” business plan 30-35 pages are perfect. You are not expected to deliver a thick book (and no one will read it anyway!). Once you have this down, you can honestly assess which sections you are qualified / comfortable writing and which may need consulting help.

Here is what you should write on your own

It is important for you to write a basic draft / outline of your business plan. Without this direction you are probably asking too much of your consultant. Once you have your thoughts organized on paper you can see what you are comfortable completing. Here are a few suggestions:

Executive Summary: Draft the opening of your business plan – then hire a pro to come in and re-write it. Your executive summary will be read first and first impressions are critical!

Marketing: You need to write your own definition of your target customer / audience. For the market research on industry growth and fancy charts go ahead and hire a consultant.

Competitive Analysis: You should put together the first draft of this section, as it is almost as important to understand your competitors, as it is your customers. If you find a consultant that is an expert in your field, then you can work together and add to your initial list.

The Dreaded Financials

This is the most difficult part of a startup business plan, as you are making projections and assumptions on products / services that you have not even produced or sold yet! If you are stuck on this section you can hire a business plan consultant to just assist you with completing your projections (income statement, cash flow, and balance sheet). Figuring out the cost of goods, delivery costs, and return rates can be simplified by breaking them down into a “light” spreadsheet. Next you need to understand your startup and operating costs – items like electricity, travel, phone expenses, etc. Again just organize these and your consultant can make all the fancy charts and graphs. Just make sure you understand all of the assumptions – for example if you are opening a retail business, you should not look towards your consultant to “guess” your rent – go out and meet with a realtor and come back with real data. If you work closely with your consultant, the financials are a great section to bring in professional help.

Managing Expectations

Optimism shows investors that a company is confident about the market opportunity, its ability to execute on the opportunity, etc. Over-optimism, however, leads investors to believe that the management team does not fully understand the opportunity or the tough road ahead. As such, business plans must be sure to limit over-optimism and show investors they are realistic and credible.

Realism, the opposite of over-optimism, should be used in business plans to portray sobriety and credibility to investors. Realism should manifest itself in management team bios that tell the actual accomplishments of managers, rather than fluff. It should manifest itself in credible market forecasts and sober assumptions of the company’s growth.