Startup Success: Avoiding Failure, Business Plans, and Financing

Common Reasons Startups Fail

1. The team doesn't have what it takes to succeed.
2. The idea is not satisfying a market need.
3. Running out of cash too fast.
4. Not being able to support growth.
5. Poor allocation of resources and money.
6. Not realizing the competition in the market.
7. Ignoring customers.

Multipotentialities

1. Idea Synthesis: Being creative, bringing ideas into something real.
2. Rapid Learning: Being able to retain and analyze information quickly.
3. Adaptability: Managing, understanding, and adjusting to different situations.

Business Plan

A written description of what and how (operational, financial) of your business future. Attracts key employees. Includes business goals, strategies, potential problems, etc.

Business Plan Guide

1. Executive Summary
2. General Company Description
3. Opportunity, Industry, and Market
4. Strategy
5. Business Model Explanation
6. Management and Organization
7. Marketing Plan
8. Operational Plan
9. Financial Plan
10. Appendix

Primary Parts of a Business Plan

• Marketplace Section
• Financial Section

Reasons to Update Your Business Plan

• Significant market change
• New or stronger competitors
• You need financing

Types of Business Plans

• Mini-Plan: Condensed version of your business plan (1-10), same components as a traditional plan, but with less detail and explanation. Serves as an option to present to potential partners.
• Working Plan: Used to operate your business, not meant to be admired. Internal document.
• Presentation Plan: Information will be similar to the working plan, but with different wording and styled for presentation.

Business Plan: Reasons and Benefits

Reasons

• Help start a venture, convince investors.
• You own an established firm.
• You need to determine objectives.
• You're trying to predict the future.
• You want to use it to raise all the money you'll need.

Benefits

• You'll stay on strategy.
• Business objectives become clearer.
• Your educated guesses will be better.
• Priorities make more sense.
• You'll understand interdependencies.

Arranging Financing

How to Get a Small Business Loan (Operating Capital & Expansion)

Preparation

1. Business Plan
2. Cash Flow Projections
3. Credit Rating Report
4. Past Business Tax Returns
5. Statement of Your Personal Financial Status

Increase Your Chances of Securing a Business Loan

• Expansion, new stores, diversification, widen target market.

Lender Expectations

• Get money back.
• Contracts.
• Plan B.
• Credit Rating Report.
• Cash Flow Projection (income, outcome, profit).

Debt Financing

A method in which a company receives a loan and gives a promise to repay the loan.

Equity Earnings

The process of raising capital through the sale of shares in an enterprise.

Sources of Start-Up Capital

1. Financing the business from your own savings/credit.
2. Loan from friends, family, business associates.
3. Bank Loans.
4. Lines of Credit.
5. Venture Capital.