You are already writing your business plan. Once written you will not only have a great tool for managing your company, but also for getting the funding you need to grow your business. Whether you’re running a small home-based business, or you’re running a large biotechnology company – if you need to seek funding – you need to present a professional, completed business plan.
You can feel confident knowing you made the right choice to build and manage your business plan using LivePlan, because it produces an investor-ready and loan-ready business plan. Our customers have secured hundreds of millions of dollars in investment capital and small business loans over the years – and we want to help you secure the funding you need to grow your business. Consider the different ways you can fund and grow your business:
- Bootstrapping: To bootstrap your business simply means you finance your business with your own funds. The benefit of bootstrapping is that you retain complete control and ownership over your business. Often companies are bootstrapped by moonlighting and working on your idea on the side while still holding down a regular job. Palo Alto Software was bootstrapped by our founder, Tim Berry.
- Friends and Family: This is when you receive funding from members of your family or your social network. The money can be in the form of a loan, or in exchange for equity. Taking money from friends and family can be tricky and emotional. We highly recommend you seek legal advice to help you and your family or friends set-up your business arrangement for success from the outset. Read this Entrepreneur.com article: “Taking Money from Friends and Family”
- Bank Loans: A bank loan provides medium or long-term finance. The bank sets the fixed period over which the loan is provided (ex: 3, 5 or 10 years), the rate of interest and the timing and amount of repayments. The bank will usually require that the business provides some security (“collateral) for the loan, although in the case of a start-up this security often comes in the form of personal guarantees provided by the entrepreneur. Inc.com’s article offers “5 Tips for Using Collateral to Secure a Small Business Loan.”
- SBA Loans (U.S.): The Small Business Association in the U.S. offers a few different loan programs that you may be eligible for. As the article states, “you’ll need to strike up a relationship with a loan officer at your local bank, credit union or nonprofit financial intermediary to access the programs.”
- Crowdfunding: Crowdfunding is when you ask a crowd of people to donate a defined amount of money for a specific cause or project in exchange for various rewards. There are three general categories crowdfunding can fall under: Equity, Donation, and Debt. Read the Inc.com article for an overview of four crowdfunding websites. They provide an overview of Kickstarter, Indiegogo, Profounder and Microventures.
- Business Plan Competitions: Business plan competitions are becoming more and more popular across the globe. You pitch your business plan, a vote is conducted, and cash prizes are awarded. There are several different models being used. Read my Forbes post about “Oregon’s Angel Business Plan Competition Model.”
- Angel Investors: Angel investors are affluent individuals who provide capital for companies (typically start-ups), usually in exchange for convertible debt or ownership equity. Angel investors typically invest under $2M, but more commonly between $50K – $250K. Check out Gust’s directory of Angel Investors, Venture Funds, Business Accelerators and Incubators and Business Plan Competitions.
- Venture Capitalists: A Venture Capitalist (also known as VCs) are people who invest in business ventures by providing capital for either start-up or expansion. VCs are looking for a higher rate of return than would be given by more traditional investments. Typically, the range of funds invested by VCs and VC firms is $500,000 to $10 million. Check-out our post about “How to deliver a powerful 10 minute investor pitch.”
Whatever funding source, or combination of sources you decide to seek, we wish you the best of luck in your new or expanding venture! If you have questions about how LivePlan can help, please let us know.