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Thirty Percent Discount on Business Plan Writing Services – The Importance of Year End Business Planning

December 4, 2012 by Frank Goley, Business Consultant

Well, it is that time of year again. Time for our business plan writing and consulting service year-end discount sale. You can save upwards of 30% on our business plan service. Why do we have the business planning service sale in December? Well, this is the very best time to have a business plan developed or updated. Here’s why…

Lenders and Investors Want to Fund This Time of Year

Some banks and investors are looking to lend out remaining funds before year end and stand great advantage to do so, but at the very least many, if not all, are looking for sound loans and investments for the beginning of the New Year to start off right. Getting a business plan in front of a lender or investor in December is key to getting that finance at year end or at beginning of the coming year. Timing is everything in business funding, and the timing for funding is the best in December and January. Take advantage of it!

Business Planning 101 – Plan for Business Success in 2013 in December 2012

The time to plan a successful upcoming year is now in December. Now is time to do your updated market and industry research. Now is the time to compare your actual financials to your projected financials and figure out the discrepancies. Now is the time to update your strategic plan to realize new threats and opportunities on the horizon. Now is the time to take a careful look at your competitors and realize what your competitive edge will be moving forward. Now is the time to review compensations plans and policies. Now is the time to review profit sharing. Are you retaining and training great people in your company?

Get your planning done in December so you hit the ground running in January. This will give you a refreshed feeling in your business from the top down, resulting in new vigor and better results. Lay a success path to follow that considers all the obstacles and challenges faced in this seemingly double dip recession. Great research, brain storming and planning will bring forth the strategies to win even in this poor and faltering economy.

Hire an Experienced Business Plan Consultant and Business Plan Writer

An experienced business plan consultant is an invaluable team member for company success. A good business planning consultant can customize the right business planning process for the need, whether you require a funding business plan (i.e. investor business plan, venture capital business plan, bank business plan, SBA business plan, grant business plan, etc.); a business success plan to successfully run and grow a company; a joint venture business plan; or project specific business plan.

With the business plan framework in place, a great business plan writer is very advantageous in writing a business plan that attracts and keeps that audience, whether it is for funders, partners, or internal use. Consulting and writing are two specific and distinct skills, so make sure as much energy and focus is spent on the writing of the business plan as the business plan development. A business plan writer ensures the plan is well organized and presented for best use. The business planning writer polishes the plan into a professional piece.

Spend Time on Business Plan Design

If you are presenting the business plan to investors, venture capitalists, bankers, shareholders, partners, the board, what have you, it is important to have a professional document that is well designed and instantly grabs and keeps the attention of the intended audience. Business plan designers ensure your plan’s appearance matches its substance. Great business plan design helps the audience to really visualize what the plan is selling; otherwise, it is just a document with a bunch of words.

Think of ways where business plan design can enhance the effectiveness of the business plan. Designing in a Flash Flip Book style presentation is a great way to help visualization to intensify clarity of business plan purpose. Adapting the business plan to video and/or web platforms is an awesome way to bring three dimensions to products, concepts and opportunities. Where design meets technology can bring exponentially better results to a business plan presentation.

Don’t Forget the Other Pieces

Be sure you have a great Executive Summary and a Business Plan Presentation (investor deck, bank presentation, partner presentation, etc.). You need great tools that adeptly summarize and present your business plan succinctly and precisely so you can get to the next step, whether that is business funding, gaining a new joint venture partnership, or getting approval from the board.

Update The Plan Consistently

A business plan is outdated the day it is finished. So be sure to consistently update the plan as you move forward and measure results. Quarterly (consistent) business planning meetings are very helpful and a great way to keep things on track and make critical adjustments to meet your business plan objectives, whether the plan is intended for funding or business success.

Lastly:  Implement, Implement, Implement

A business plan is just that, a plan. If you fail to implement the plan, it is of no value or use to you. Use the plan as a tool and integrate it into your company operations. It is a tool that gives clear strategic direction and identifies problems before they become costly. Weave your business plan into the fabric of your company. A useful business plan is a living, breathing tool. Use it!

Need Business Planning Help?

Here are 4 levels of business plan consulting, writing and designing services which meet most company / venture needs and requirements. Save upwards of 30% on your business plan with the year-end sale…

Level I Business Plan Service

Level II Business Plan Service

Level III Business Plan Service

Level IV Business Plan Service

Want a do it yourself business plan guide, or an internal guide to help your business planning within your company?

Get the Comprehensive Business Plan Guide and Workbook

Here are some useful Free Business Planning Resources…

Business Planning Articles

Business Planning Blog Posts

Business Finance Blog Posts

Business Finance Articles

Posted in Business Finance, Business Planning and tagged 30% discount, bank business plan, business plan company, business plan consultants, business plan services, business plan writers, business planning firm, investor business plan, sba business plan, venture capital business plan, year end sale. Comment

Effective Investor and Venture Capital Pitch Tips

May 9, 2012 by Frank Goley, Business Consultant

Ok, so you have spent a lot of time perfecting your business plan and financial projections. You have what you think is a good investor or venture capital pitch deck (presentation). Now, don’t ruin your chances at obtaining capital by poorly executing your pitch.

Here are 20 top tips in delivering a solid pitch:

1. Be Genuine - Be yourself. If you are perceived as fake or trite, forget your chances.

2. I am the Next Google, Amazon, or Facebook - Let’s face it. Be honest with yourself. You are not going to be the next Google, Amazon or Facebook. Be real. Be realistic. Leave the hype at home and by all means, keep it out of your business plan!

3. Talk - Don’t read. Don’t have notes. Definitely don’t read off of the presentation slides. Just talk and be natural. If you know your stuff, it will come easy. If you can’t just talk about your opportunity then you need to get a better pitch. Don’t ramble, do a lot of practice, and have a framework to work off of. Just talk and be real. Be flexible. Your presentation may be interrupted at any time. Be able to go with the flow and adapt.

4. Pictures and Graphs - Don’t just write out your pitch and put it on slides. Your presentation slides are for pictures and graphs and charts (which you need to explain). The slides should better explain your product, value, model and market.

5. Demo Your Product or Service - Investors want to see the product or service in action. Demo it! Talking about an “idea” is the kiss of death.

6. Too Technical - Don’t be too technical in your presentation. Not all investors may understand what you are saying. Keep it simple and in layman’s terms. If they want sophistication, they will ask you pointed questions.

7. Realistic Assumptions - Prove how your business plan comes from highly realistic and well researched and considered assumptions and market info. Reviewing your underlying assumptions gives you credibility and believability. Two critical hurdles.

8. Short and Succinct - Don’t go long, and definitely use less time than allocated. If they like your pitch, they will ask questions, and then your timeline is irrelevant since you got them talking!

9. Believe in Yourself and the Opportunity - If you do not believe in yourself, and most importantly, in your opportunity, then investors will see right through you and in 30 seconds they will make up their minds you are a waste of time. If you don’t believe your pitch, don’t give it.

10. Don’t be Boring - Investors and venture capitalists listen to pitches and review business plans all day long. Brighten up their day with enthusiasm and an interesting pitch, and most importantly, an interesting opportunity.

11. KISS - Keep it simple. Trying to fully explain your business plan is a mistake. Talk about your team’s experience, why your model works, why your projections are realistic, and your underlying assumptions. If they want more detail, they will ask, so be prepared.

12. Know Your Plan - Far too many times a pitch presenter doesn’t know the company business plan inside and out. And this presenter often passes the buck when asked a questions he or she can’t answer. Huge mistake. Know your assumptions, know your model, know your financials, know where the valuation came from, know your market, know your research– know your plan inside and out!

13. Tell them the Bad - If everything is all peaches and crème, and you are the perfect business person with the perfect business with the perfect opportunity, then you might as well stay at home. Investors want to hear where you are weak, what your gaps are. Why? Because they make your strategies more believable. They know you know your shortcomings and look to see how you address them.  A business plan or presentation without weaknesses and threats have no credibility, and certainly the strengths and opportunities will not be the slightest believable without them.

14. Be Natural - Don’t be rigid or appear overly nervous. If you are natural, it shows confidence, not cockiness. It shows preparedness. It shows you know your stuff and can back it up.

15. Practice Makes Perfect - If you don’t practice the pitch from start to finish a million zillion times in front of an audience, then you are not ready. Find some experienced business people and investors to critique your pitch and re-work it until you are confident in it, then practice it over and over.

16. Stay Away from Common Pitch Words and Terms - Don’t use catchy, by the minute, phrases to impress. They don’t impress- in fact, they show your inexperience. Watch out for buzzwords. Come on, be real!

17. Tell a Story - Talk about you, how you got here, what you have learned…who your product or service is for…A storyline can be easily followed and makes sense. Get investors believing in you by being interested in your story and your journey. It is the journey and what you learned that is most important to investors and VC – not your great product, service, opportunity.

18. Remember Your Best Asset - Your best asset is not your product (or service)! Don’t sell your product as much as you sell yourself. Start with you, your experience, your team’s experience, then work in your offering and opportunity into your story. Investors invest in people, not the product!

19. Talk about the Competition - Identifying you have strong competition is a winning strategy. Saying you have no or little competition will lead to a no success pitch. Identify your main competitors, and address how you will capably compete with them and how you are unique in comparison with them.

20. Don’t Sell the Opportunity, Sell Yourself - This goes back to item 18 because it is just that important. Don’t give some flashy sales pitch with enormous markets and numbers and no substance and viable assumptions and research and experience to back it up. Sell yourself and your team and why you are capable. This will be the only sales you will need. The rest are facts, aren’t they? If they don’t believe in you, they will never believe you (or your opportunity).

Beware of Business Plan Writers and Flashy, No Substance, Plans

A well developed business plan that comes from a good business planning process will produce the best pitches. Hiring some business plan writer to throw together a flashy business plan after a two hour phone conference is a waste of your time and money. If you want someone outside your company to help with your plan find an experienced business plan consultant that will take the time to help you develop a viable model, strategy and plan that is grounded in good research and solid assumptions.

Carefully examine the experience, process, support and team the business planning firm brings to the table. And be certain you are committed to the agreed upon business planning process. If you do not give of yourself and your team’s time, then the consulting firm will have no where to start and build a viable plan. Be committed!

Posted in Business Finance, Business Planning and tagged business plan, business plan consultant, business plan writer, investor, pitch deck, venture capital. Comment

Finding Business Finance to Start or Expand Your Business

March 27, 2012 by Frank Goley, Business Consultant

The business lending market has certainly gotten more difficult post-recession. Lenders want to see ample collateral, a good Business Plan, solid management team, excellent financials, etc. This is why business plan consultants and writers are in more demand in this tough economy. Businesses are realizing that they need a solid plan to present to funders, whether a bank, investor or venture capitalist.

So how do you find business finance in this challenging finance climate? Well, there are a lot of ways, SBA being one, investors being another, grants if industry specific need- there are a ton of business finance alternatives that I have blogged about previously (click on: Business Finance). In this post, I will relate a funding source that I read about in Entrepreneur Magazine, which I think holds a lot of promise.

Starbucks and CreateJobsforUSA.org to the Rescue

Starbucks has hooked up with CreateJobsforUSA.org to support a unique business lending program. Every $5 donated at a Starbucks location will support $35 in small business lending. Starbucks is partnered up with the Opportunity Finance Network, which is hooked up with 180 Community Development Financial Institutions (CDFI). These CDFIs specialize in lending to disadvantaged and low income individuals and underserved communities in the US. This program launched in November 2011 with an initial donation of $5M from Starbucks. The leveraging is substantial: for every $3,000 donated, $21,000 is given out in loans.

Who Can Apply?

Anyone can apply for this financing which makes it viable for a lot of different types of businesses. Be sure to make a good impression by developing your business plan through SCORE, SBA, SBDC, or with a professional company that offers business plan services.

Preference Given to Businesses Who Create Jobs

One surefire way to secure this finance is to show in your Funding Business Plan that this loan will result in “x” jobs. If you can show you will be providing jobs in hard hit economic areas, then you will certainly garner attention.   

What Makes These Loans Different?

Well, have you been able to really talk to your banker about your business situation and needs lately? Does he come by your business and chat with you? Heck no…not in this big bank dominated bad economy…A CDFI will take the time to actually speak and counsel you- helping you every step of the way to have a successful business enterprise. Nice change of pace, huh?

Loan Program Details

Term: Five plus years.

Amount: Average is $200-$300K. Microloans of $5-$10K available. Some 7 figure loans given.

Interest Rate: 5%-7%. Short term micro’s will be higher.

Collateral: Required but you can cross collateralize a lot of different types of assets.

For More Information

Go to the Opportunity Finance Network. Get cracking on your business plan today!

Disclaimer: ABC Business Consulting is not offering any form of business finance, and this is for information purposes only. Any terms mentioned is for informational purposes and not intended or construed to be a loan offer.   

Reference: “Brewing Up U.S. Jobs” by Michelle Goodman, Entrepreneur Magazine, January 2012.

Posted in Business Finance and tagged business finance, business funding plan, business plan, Community Development Financial Institutions, CreateJobsforUSA.org, Opportunity Finance Network, Starbucks. Comment

Top Ten Tips for an Effective Funding Business Plan

March 19, 2012 by Frank Goley, Business Consultant

A Funding Business Plan has a lot riding on it. Namely the effective funding of a business. Over the years of developing business plans, I have learned a few things along the way that make business plans more conducive to funders. Here is a top 10 checklist to consider when writing your business plan:

1) Good Business Model – This is where I see a lot of funding business plans fall down. A lot of these funding type plans I see are just a sales document with a lot of flash and unbelievable hype. For a business plan to be successful in raising funds it needs to prove that there is a sound business model in place that is well considered, which when implemented, will result in a successful business enterprise. 

2) Good Operational Model – Not only do you need a solid business model in place, but you need to show how you can effectively operate and manage the business. Funders do not fund business plans, they fund people- namely the management behind a company. Without sound experience and management, deals don’t get funded.

3) Good Research – This is another biggie. There needs to be real thought and research behind the business plan. You need to prove in the funding business plan that there is data supporting your position and business model. Research not only provides you good market intelligence as a business owner, but it gives you a foundation to your planning.

4) Sound / Realistic Assumptions – This is a big area of oversight that I see most business plan writers making. A business plan to be believable needs to have sound assumptions behind the making of the plan, and most importantly, those assumptions need to be explained and detailed in the business plan for the funder. Detailed assumptions gives the funder real insight into what a business plan actually means. Assumptions give insight into whether the Financials are just plain guesses and hype, or if their development actually had some sound thought, research, and reasoning behind them.

5) Well Organized and Easy to Follow – A funder needs to effortless find the right information quickly and easily. Plans that don’t do this will get sent to the circular file cabinet faster than you can say 1-2-3! Your plan should be organized into multiple sections that are well marked and easily indexed in the Table of Contents. A funder should be able to quickly scan a business plan in a couple minutes and gain interest. If it takes longer, then interest is lost, and it goes to the bottom of the pile. Funders are busy, professional people. Treat them with respect and courtesy- send them a well organized plan.

6) Not too Much Fluff / Plan Has Substance – All too often I see business plans that are all hype, have a bunch of graphs and charts, nice looking photos but…it is all hogwash- there is absolutely no substance. First and foremost a plan must have substance. It must have a solid business model in place. You can build the nice looking stuff around the substance, not the other way around. A bunch of flash alone will not get a deal funded. A hollow plan equates to a hollow management team. Remember, funders invest in people, not plans.

7) Plan is Aesthetically Pleasing – If a business plan is sloppy, unorganized, hard to follow- it is just plain messy with bunches of grammatical mistakes…well, then kiss your chances at funding success away. A messy plan in the mind of a funder is a messy business- something which they run from. Once the substance of a plan is completed, take the time to make it look nice. Doesn’t need to be the Mona Lisa but take a little pride in its appearance and readability.  

8. Plan Forms a Picture in the Reader’s Mind – A picture is worth a thousand words, especially for a business plan. If a business plan is all words, then it can be difficult for the funder to really visualize the business, products, services, markets, etc. This is where pictures, graphics, charts, graphs, and the like really come into play. Use media to help the business plan reader form an image in their mind- help the reader see the business vision toward success. If the reader can visualize a successful business, then you will get funded. Video and demonstration presentations can also be great ways to help close a business plan’s introduction.

9) Good Executive Summary – The success of a business plan starts here. Write the summary last and key on the important areas of the plan. If in 30 seconds the executive summary doesn’t convince the reader this is a viable deal, then re-write it. Send drafts to your business mentors and associates- get their feedback. I can often tell if a business plan is poor when looking over the executive summary. A great executive summary only comes from a solid business plan, not the other way around.

10) Believable Financials – A business plan needs to make a case for the financial projections and past performance (if applicable). If a business plan is properly developed with a sound business model, operational model, market analysis, and marketing plan, then you have the basis and data and assumptions in place to form financials that you can sell to a funder. So many plans come across my desk that fail in this area. They are just blind guesses and hopes and dreams- just a bunch of hype behind them. Get the right foundation for the plan, then the financials will be believable. Sell the financials with good, well-documented and supported assumptions.

11) Bonus: Write the Plan for the Audience – Each business plan presented to a funder must be written for that particular funder. Whether the funder is a bank, an investor, venture capital firm, a grant funding institution, or a joint venture partner…the style and content and emphasis of the plan needs to be customized for the reader. Banks are interested in collateral, Cash Flow, and your ability to service debt. Investors want to see a solid ROI that is backed up with a great business model and sophisticated financials. All funders want to see a strong management team. Joint Venture partners want to see transparency, and what you can bring to the table to make the partnership a two way street. Customize each and every plan to the requirements and expectations of the particular funder. It will pay off to take this extra step instead of using a generic plan for all funders. 

So, whether you are writing the plan yourself as the business owner, or have hired someone to help you with the business plan development, keep in mind these top 10 funding plan tips and mistakes. They can make the difference between success and failure. In this present lending and funding environment, you need all the help you can get. Do it right.

Business Planning Resource: You can find more business planning tips and a detailed business planning process and workbook in my Business Plan Book.

Business Planning Services

Posted in Business Finance, Business Planning. Comment

The Fundamental Reasons Why a Funding Business Plan Fails

November 1, 2010 by Frank Goley, Business Consultant

Business Plans don’t guarantee funding. It is the foundation and fundamentals behind a Business Plan that give the plan and company the best chance to obtain funding. The distinction is important. No matter how colorful, flashy, professional looking and apparently well written a business plan is, there are business fundamentals which need to be proven out in the plan to make the funding request viable. We see so many business plans on the market that look great from an aesthetic standpoint and appear to have all the necessary ingredients, but upon closer inspection are just canned, cookie cutter plans that prove little as to specifically why a particular company is a good investment or lending risk. A sample business plan that got one company funding won’t get another company funding unless that company has the right business fundamentals in place. Let’s look at the top two business fundamentals often missing in a business plan that fails to help a company obtain funding.

Inadequate Business Plan Process

The quality and depth of the Business Planning Process is more important than the business plan itself. If the process is lacking, then the produced business plan will be significantly lacking. The planning process needs to be customized for the particular business. Our Business Planning Customers often remark that the process behind the business plan development was extremely beneficial, even more so than the finished plan itself. A good business planning process uncovers problems and addresses them prior to sending the plan to a funder, maximizing the reception to the plan and the results of the plan.

Tip: Please see my Business Plan Book for a proven business planning process that can be applied and customized to all types of companies, no matter the stage, size or funding level.

The Business Plan Didn’t Adequately Prove How the Business will Succeed

This is a huge point. As Business Plan Consultants, we see many funding business plans being developed in the marketplace which are shallow, hollow plans that do little to adequately and realistically prove to the funder that the business is capable of being successful, servicing the debt level requested, and being a good investment risk. The underlying principle behind any business plan, no matter its purpose, is to prove out and show how the company will run successful business operations. Due to the success of the operations and marketing of the company, a case can be made for funding. A Funding Business Plan is really just correct formatting and having the information a funder is looking for. It is the fundamentals behind the plan that prove a best chance for business success that helps to position the company for a successful finance campaign. If a plan is lacking these fundamentals, it will never have a chance at obtaining funding.

My next blog post will explore some more of these business fundamentals and other reasons why a business plan fails to help a company to obtain funding.  

Posted in Business Finance, Business Planning. Comment

Micro Loans are Helping Small Businesses to Start Up and Succeed

September 24, 2010 by Frank Goley, Business Consultant

Micro Loans have been around for a while but they are now getting some attention, particularly with small businesses needing seed finance or early stage growth finance. In fact micro lending maybe what will help us get out of this recession. Micro loans create new businesses, which will need employees. Additionally these newly seeded businesses will hopefully encourage the larger banking institutions to lend more freely again. More reason for job growth. Small business growth + newly created jobs = a fix we need to exit this recession for good.

What is a Micro Loan?

A Micro loan is generally a loan to a start up or early growth small business for less than $35,000. Mostly controlled by non-profits, and they typically lend to businesses in a particular geographical area- generally a “local” or community based loan. Terms are for 5-6 years with collateral to securitize the loan typically. Micro lenders require a solid Business Plan and Loan Package. You can use micro loans for working capital, equipment, machines, inventory, supplies, furniture, etc.

The Impact of Micro Loans

$56 Million in micro loans will be distributed through the SBA this year. An average US micro loan is around $13,000. The payback rate is an astonishing 98%. A lot of these business loans are going to low income entrepreneurs, giving them an opportunity to succeed and strengthen their local community.

Two Businesses that have Benefited from a Micro Loan

Love Joy Sweet Treats makes cupcakes, cookies, and many other sweet treats. The owner received $1,500 to start up her company, and she is off and running and selling those great treats. The owner of Smart Start Sitters received $10,000 to get her child sitting service off the ground and running full steam. These aren’t high tech companies but they are putting food on the table for the family owners and employing people. Something we should all think about. As a Business Consultant, I truly recommend you try a micro loan if you have the burning desire to be your own boss and create your own destiny.

For more Resources on Micro Loans, please see my blog posts on:

Have You Considered Micro Lending, Community Banks and Credit Unions for Your Business Finance Needs?

Business Finance in a Recession- Part 3: Business Funding Alternatives

Posted in Business Finance. Comment

Consider an Enterprise Lab as a Way to Successfully Start Up

July 27, 2010 by Frank Goley, Business Consultant

There are a multitude of ways to obtain the funds, networking and mentorship start ups need to really get their business off the ground. There are Enterprise Labs which will not just incubate but really have the tools, relationships, mentors, experts and funding to help you successfully model, fund and start up your business.

An example of one of these Enterprise Labs is the Kauffman Labs, which picks up to 20 founding groups per sector to go through their 6 month program to successfully start up. They provide the necessary education, tools, experts, mentorship, relationships, business modeling and the such for founding members of a start up to successfully obtain venture capital and come to market. And you don’t have to have a pedigree education to apply!

The competition is stiff but the process of competing is a great exercise for any start up, whether or not you are selected for the program. You gain so much experience and knowledge in the process of applying and competing, that it is highly advantageous. It gives you a great idea where you stand as a viable start up looking for VC.

Kauffman provides a plethora of resources for entrepreneurs, including Entrepreneurship.org, Kauffman FastTrac and the Urban Entrepreneur Partnership. Take advantage of these programs and resources from Kauffman and other foundations!

Video Resource: Kauffman Labs

Posted in Business Finance. Comment

Four Keys to Obtaining Business Funding in a Recession

July 26, 2010 by Frank Goley, Business Consultant

If you are seeking funding in this recessionary market, then there are 4 Key Areas to pay attention to:

#1 – Business Track Record

Showing how you have run a successful business in the past or had an influential hand in running a successful business is critically important.

#2 – Experience

Detail how you have specific experience for the type of business, customer and market.

#3 – Niche Market Identification

Funders want to know you have narrowed down your customers into a profitable Market Niche which you serve well.

# 4 – Cash Flow

A Cash Flowing business is a much easier sell to a funder.

The KISS acronym applies. Keep it Simple. Apply these four key areas to your business and your funding search will certainly improve. Make sure you have a solid Loan Package and Business Plan to present to funders. Good luck!

For more information, please see my articles on Business Finance.

Video Resource:  The Importance of Cash Flow for Bank Finance

Posted in Business Finance. Comment

Use Crowd Funding to Raise Funds for your Start Up or Company Project

July 23, 2010 by Frank Goley, Business Consultant

Ever heard of Crowd Funding? Want to raise capital for your business with out paying an interest rate or giving up equity? Crowd funding provides donations to your business for a reward and can be a viable capital raising strategy that has a strong social media influence.

Its Origins

Crowd Funding grew out of the internet phenomenon of raising donations for charities, political candidates, etc.  It was then used and now used pretty heavily to raise funds for musicians, artists and independent film makers. It has now evolved into a viable strategy for companies to raise funds.

How it Works

You register your business proposal on a Crowd Funding website like RocketHub or KickStarter. You provide different rewards for different levels of donations. Donation levels range from $5 to $1,000, and the larger the donation, the better the reward. Rewards aren’t an interest rate or equity stake, instead it is a thank you letter, a gift, a mention on a website, name of the donor put somewhere prominent, discounts, free products and so forth. Up to $250,000 has been raised using this method and many use it to raise $5,000 – $15,000. The Crowd Funding service takes a percentage of the total amount raised.  

Social Network Element

The success of Crowd Funding depends on its donors and those seeking the funding to spread the news among their social networks, particularly through FaceBook, Twitter, MySpace, YouTube and the like. It is important you have a planned fund raising strategy going in because these Crowd Funding services require you to raise the entire amount you are seeking in a certain time period, otherwise you don’t get any funding. Many who do this strategy correctly will raise more than they need.  

Use Crowd Funding to Get Closer to Your Customers

This is a real viable platform for you to really engage customers in your business, both existing ones and prospects. It gives them a real involvement in the success of your business and cements that necessary bond you need to really have “sticky” customers. Can you think of all the possibilities?

How to Do It

I recommend you go to the different Crowd Funding websites and see how it is done. You will see projects that successfully raised money and those who didn’t. Normally those who didn’t had a “wish” or “dream” rather than a viable plan. You can also gain some invaluable tips on what works for soliciting donors to your project by studying successful ones. Looking at the different projects also gives you good ideas on the different rewards you can offer and which ones worked. You will also see the dollar ranges that where most successful, i.e. $35 donation level with the right reward seems to be a hot level.

Be careful to see what type of projects and businesses are promoted on the Crowd Funding service and if it meets what you are trying to do. Also, some are really venture raising sites, which require an equity stake or other type of pay back. The two websites I mentioned seem to be good ones for most businesses and are true Crowd Funding platforms, but do your homework and you can find others too.

Video Resources

What is Crowd Funding and How it Works

Different Crowd Funding Services and Platforms

Posted in Business Finance. Comment

A Unique Equity Funding Strategy – Exchanging Equity for Services

July 20, 2010 by Frank Goley, Business Consultant

Nowadays companies have to look at unique funding arrangements as business finance is tight and markets fickle. Have you thought about bringing on an equity partner not for the cash they can provide but the expertise and services they can provide? Sometimes a company needs a certain service more than it needs cash, particularly if it is from a company that is highly sought after for their area of expertise. When things are tight and options limited, you may want to expand your funding search for service providers who could be integral to your company success and present them with an equity position verses paying cash for their services.

In some sense this appears as barter, but it is really an equity deal as the service provider receives an equity position for the service they provide. For this to work, there needs to be incentives built in so the service provider has a real stake in the success of their services, and the receiving company can rest assured they will be a priority to the service company. What a better way for a start up to secure high end services with out having to outlay precious and limited cash.

Valuations can be tricky in determining the equity trade for services but it is doable. Understanding the value of the company from a comparable sale and operational revenue, along with what the services will cost from the service provider, can get you in the ballpark.

Marketing and Advertising can be the mainstay of a company’s success so trading equity for these type of expert providers can be very worthwhile. Make sure you have incentives built into the equity share agreement so the service provider / equity partner has plenty of reason to work hard on your account. For instance, if they meet certain level of sales or increase in sales due to their services, then the equity stake can grow to a predetermined cap. It can be a real win-win for both companies in this uncertain economic time. Consider a relook at your Business Plan to see if trading equity for valuable services makes sense for your business.  

Video Resource: The Angel Funding Market

See this video on Vator.tv »

Posted in Business Finance. Comment