5 Steps for Entrepreneurs with an Idea, but No Funding

Every business starts with an mind. Whether you have an mind for a great modern product or a service that will revolutionize an industry, your inspiration is a capital start. But how are you going to bring your idea to liveliness ? Building a successful business takes more than a capital mind and a vision—it takes plan, discipline, research, and a whole lot of money .
Before you can get fund, there are respective steps to making surely your theme is solid and marketable. While it ’ mho true that not all startups will make it, you don ’ triiodothyronine want to set yourself up to fail ! If you have a big idea but no support even, here are five steps you ’ ll necessitate to take on the road to wooing investors .

Step 1: Find a mentor and ask for advice

When you ask for money, people will mechanically be doubting and want proof that your mind is viable. But is it, truly ? Have you gotten the objective public opinion of person who has been in your shoes ?
Finding a mentor is an significant footstep in the entrepreneur ’ south journey, and a good, know mentor will give you the honest truth about your concept. After all, you don ’ deoxythymidine monophosphate want to waste your time on a bad idea—there ’ randomness always another opportunity around the corner.

Start attending network events and leverage people in your network to connect with a mentor. many cities have invention labs or mentoring programs that can help you get your estimate off the grind. You never know—you may equitable get a electric potential investor out of it like Michael Litt, co-founder of Vidyard. Litt says he ’ second never made a dinner dress pitch—he ’ second arrive all his funding out of asking for advice and build relationships. many season entrepreneurs are happy to contribution their cognition and opinions—you just have to ask !

Step 2: Perform market research

Finding your target grocery store might be the most challenge footprint of making an idea into a business, but it ’ s besides one of the most crucial .

Your second step is doing market research, and this process should begin by asking yourself a couple of questions:

  • Who are you targeting with your product or service? Age, gender, education level, and other traits should be included—be as specific as possible.
  • Are people interested in your product ? Many entrepreneurs waste a lot of time and resources on their idea, only to find no one wants to buy.

To conduct your research, you should use a variety of different sources to examine the opportunities and pitfalls of the marketplace. You will besides need to gather steer data from your target hearing. This can easily be accomplished by surveying current and electric potential business customers, testing focus groups, conducting one-on-one interviews, utilizing social media polls, and observing data through platforms like Google Analytics .

Some great secondary data sources include:

  • industry associations
  • Universities
  • government statistics
  • D & B fiscal and business services
  • local anesthetic bedroom of commerce
  • commercial enterprise growth agencies
  • Online business databases

One of the best ways to conduct live marketplace inquiry these days is to try crowdfunding. many startups have launched Kickstarters to do commercialize research and prove there is interest in their product. Oculus VR was able to secure their initial support from a crowdfunding campaign, and later sold to Facebook for over $ 2 billion !

Step 3: Determine your capital needs and write a business plan

Throughout the path of your research, you ’ ll get a more realistic estimate of how much fund you ’ ll motivation. even if you manage to get a crowdfunding campaign off the reason or find a way to fund your startup yourself, the costs of running every aspect of the business can go direction beyond your initial capital needs for launching .
Before you look for investors, it ’ south important to have a solid idea of how a lot money you actually need to start and grow a business. There are many unlike factors to consider, including increase inventory buildup prior to the Christmas temper, experiential commercialize budget, and much more. Your mentor may be able to help you come up with a approximate range number you can use when seeking fund .
In addition to knowing how much money you ’ ll want to get your clientele off the land, you ’ ll besides need to show potential investors how you intend to use it. You can do that by creating a occupation design. Writing a commercial enterprise plan may seem intimidating, but it doesn ’ t have to be. a long as it contains the most significant components, such as your target commercialize, product information, fiscal plan, and the metrics you ’ ll use, the design doesn ’ t have to be long—in fact, the more concise you can be, the better.

Step 4: Enter a contest

major corporations know there are entrepreneurs out there with fantastic ideas who need funding. To find the best of the best, many of these are offering contests for entrepreneurs. The competition may be ferocious, but hey, person has to win !
Each contest has its own requirements, so read them thoroughly and follow all the steps cautiously. You don ’ t want to waste your ( or the judges ’ ) prison term on entering a contest that doesn ’ deoxythymidine monophosphate give to your theme .

Step 5: Consider outside investments

now that you ’ ve done your market research, created your business plan, and discussed your estimate with an honest, objective mentor, you can start thinking about fund. After following the steps above, you might be ready to seek outside investors to generate more das kapital and grow your occupation .

There are a number of ways to generate funding, with some of the most popular including:

  • small occupation loans
  • VC fund
  • Crowdfunding
  • Angel investment

Each of these options has its pros and cons. For model, loans allow you to retain the most control over your caller, but the requirements and refund terms can be difficult for some entrepreneurs to manage .
Venture capital firms have funded some of the most successful startups, but can be unmanageable to attract and may have terms you ’ re not comfortable with. Seeking angel investing may seem like an intimidate concept, but it ’ randomness actually identical bare and approachable once you understand it .
An angel investor is person who invests in startups because they believe in the entrepreneur and the project—though of course, they ’ re besides concerned in making money off their investments. The relationships are normally more personal and hands-on than a venture capital firm, and can even be friends or family members of the entrepreneur .
generally, you will need to offer equity in your caller to people who are matter to in investing—which can mean you end up with less operate over your company in the long run. This is one of the tradeoffs of getting outdoor fund. however, most entrepreneurs do finally need investments from external sources, and can ’ t trust on bootstrapping constantly .
indeed how do you attract investors ? Start by talking about your business with everyone you know. Leverage your net, meet who ’ south interest ( or has connections to those who might be concern ), and have a courtly deliver prepared before you have any meetings with likely investors .
Investors want assurance that your company has a dear find of giving them a healthy return on investing, and won ’ t be concerned in funding you unless you can prove you have the merchandise and the plan to make your business a success.

Don’t waste your time—take the steps in order

If you have an idea for a new business, don ’ t jump ahead from step one to step five. You ’ re fair probable to waste everyone ’ south time. A mentor who will be honest with you and help you make your dream a reality is worth their weight in gold .
very take the time to test whether or not your estimate is a adept one and do the research before you seek investment. To set yourself up for success, don ’ thyroxine jump straight to fund, prove your idea. After that, it ’ second time to get everyone else excited and find the perfect fund reservoir for your first gear round .
AvatarAndrew Deen

Andrew Deen

Andrew Deen has been a adviser for startup in about every industry from retail to medical devices and everything in between. He implements list methodology and is presently writing a book about scaling up business .

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