In spite of the administrations’ recent $30 billion pledge to help fund small businesses, many entrepreneurs are reportedly still struggling to find startup funds. Would-be business owners might benefit from Inc. magazine‘s tips on writing great business plans to garner investments. Startup businesses might benefit from including a background section in their business plans. This will give potential investors insight into the qualifications of management leaders, so new business owners won’t seem like novices.
The source also suggests that startups include a section detailing collateral. Collateral consists of assets that can be used to fund loan payments, interest expenses, or debt repayment if necessary. This facet of a business plan will make a lender feel safe investing in a company.
In addition to guaranteeing investors that loans will be paid back, startup business plans should clearly indicate how banks and venture capitalists can make money. The health of a company is separate from investors’ capital gains – entrepreneurs should specify if investors can sell shares to make a profit.
Would-be business owners can learn about the benefits afforded to investors through different entities by visiting online incorporation websites. Professionals at an incorporation service can also help companies get started on legal business formation. This might indicate to lenders that an entrepreneur is serious about starting a company and that investments will be well-utilized.