According to GEM Global Report, 100 million businesses are launched annually.
That’s 11,000 per hour or three every second.
The reason so many are launched, in part, is because so many fail. The estimates change from source to source – and the failure rate is typically exaggerated as being 80 to 90 percent. The best numbers perhaps come from the U.S. Bureau of Labor Statistics, which report about half of all new establishments survive five years or more and about one-third survive 10 years or more.
So if you are an entrepreneur or are thinking of making the leap into starting your own business, that’s very good news.
Still, if you are serious about your startup and you are going to need funding, you need to know how to get funding. InDinero is a company that offers back office accounting and finance operations to companies online so they can cut down on personnel costs. InDinero offered 10 tips on how to raise capital for your small business.
1) Set a Core Focus: More companies die from lack of focus than any other mistake. Even mammoth companies today such as Google started out with a core focus – a page-ranked search engine.
2) Minimize Funding: The idea that you want to have lots of funding so you can make a huge initial splash leads to unfocused thinking. A company flush with cash initially might try to do several things and end up doing them poorly rather than doing one thing well.
3) Be a Storyteller: Investors want to buy into a clear vision. What is it about your idea and you that is worth investing in? This isn’t something you get right right away. Refine your pitch and vision before you get in front of investors.
4) Timing Matters: Have a plan for when you need money. You don’t want to run dry at the wrong times or be flush with cash when you need to make critical budget-conscious decisions.
5) Meet Your Market: Before trying to raise money, know the metrics. Do concrete research on the size of the market, the demand and how your idea meets that demand.
6) Terms and Conditions Apply: Watch out for predatory investors.
7) Raise Money Now: Even if it’s not in your plan right now, it’s always smart to be looking for funding opportunities.
8) Elminate Uncertainty: Don’t operate the company on the fly. Develop a solid plan with benchmarks.
9) Stay Humble: If you are successful in raising capital, treat it like it’s your last known paycheck. Investors watch out for companies with a track record of frivolous spending.
10) Choose Your Advice: Find mentors who have success in what you are trying to do. Warren Buffet is a brilliant man. That doesn’t mean he knows how to launch a startup.
Thinker Ventures works with startups – not all business development companies do – and have seen companies make mistakes in all these areas. When NonProfitTHRIVE.com launched, founder Nicole Sdao had a number of ways she wanted her site to help nonprofits. Thinker worked with NonProfitTHRIVE.com to set a core focus. The site now helps nonprofits and potential volunteers connect through their phones, which is the key to reaching the millennial generation.
Littlestar Plastics is by no means a startup. It just finished its 25th year in business and has nearly 50 employees. It’s website though did a poor job of illustrating that Littlestar really is an engineering and design firm that can do things with polymers that most companies do not think is possible. Even the best companies don’t tell their stories well enough.
So what’s your story?