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Saturday, February 20, 2010

Find financing by searching cleverly

Although South Africa’s economy is already showing strong signs of growth and the economical difficulties of 2009 starting to feel like a distant past, may entrepreneurs are still finding it difficult to secure business financing. This, however does not have to be the case and as long as your business plan supports you and your feasibility study has shown that they there is potential in your market, as the saying goes, search and you shall find. To put it more poignantly, perhaps we can say, search cleverly and you shall find!

Here are a few things that you can do to ensure that you are indeed searching cleverly:

Pick your Market
The market is probably the most important factor driving the success of the start-up market as a whole. If there is a strong demand from your target market, even a just adequate product can succeed, as the “market pulls the product out of the start-up.

The reverse is seldom true. Even great products often don’t succeed in tough markets, and very rarely do they create new markets. So pick not only your battles, but also pick your battlefield.
Show Momentum
Unless you’ve invented a way to turn lead into gold, these days you must show paying customers or enthusiastic users to prove your value to potential investors.

There are several indicators you can point to in order to demonstrate that your business has real market traction:
  • New customers/beta testers (do the dogs eat the dog food?)
  • Short sales cycles (are customers eager to sign on the dotted line?)
  • Renewal rates (once customers use the product/service, do they come back for more?)
  • Press coverage (do you have positive write-ups in the press?)
  • Testimonials (are your customers willing to testify just how your product solves their problems)
  • Believe in your team
  • It has become cliché to emphasize the importance of people as being crucial to the success of an endeavour. But in a start-up, the importance of having a good team is not nice to have – it’s a necessity.

Work with the right people
Hire people you can trust to do the right thing by your company, as if it were their own, after all it is! Unlike a large organization, there is no room for slackers or primadonnas at a start-up. Make sure you hire people who can envision a broad strategy, and back themselves to execute against it.

At all times, be wary of “experts.” Experts can tell you how to do something that’s been done before, and do it really well. For sure, this is important in certain situations. But never forget that the whole point of a start-up is to develop new solutions to existing problems.

Find Validation from the doubters
It is often said that nothing worth doing is ever easy. When you embark upon the roller coaster that is starting a new company, you will find many naysayers who will tell you that it can’t be done. This is actually a good sign--what they really mean is that they don’t know how to do it, and therefore believe that you won’t be able to do it either. Remember, if they did know how to do it, you’d already be too late.

The path of an entrepreneur is more often than not, a lonely one. Few people will be able to see through your eyes. So have a long-term vision that you can clearly explain and around which you can rally your team, and keep you focused during the challenges that inevitably arise.

Back your vision with a firm belief in innovation. Steve Jobs once said that innovation is the single biggest difference between a leader and a follower. As you innovate and your vision takes root in the market, you will often hear cries of denial bordering on protest--which is the most common reaction of a market segment that has been disrupted.

Believe in your idea but also don't be to afraid of change, remember that the market and demand is changing constantly so you may also have to.

Using the latest in business plan software technology can assist you with tracking changes in the market, taking advantage of new business opportunities and help you gain access to business finance fast.