Looking for investors? Wondering about the best benefits for your employees? Read on for answers to these and other crucial business questions.
Q:My company needs an influx of operating revenue. How do I find investors for my business?
A: Your first question should be, "How much do I need?" If we aren't talking millions of dollars, friends and family are some of the most dependable resources for any entrepreneur. If you've already tried that, you should consider other options, such as a small-business loan, an angel investor or venture capital.
Finding investors is really a matter of networking. Unless you get lucky, it's going to take some time. For starters, talk to your banker, who may want to offer you a loan, and may also know potentially interested investors. You should also talk to your chamber of commerce, as well as any business organizations you belong to.
Not surprisingly, the internet can help you find angel investors and VC groups fast. Check out the National Venture Capital Association's website. Under the "Resource Area" tab, you'll find numerous descriptions of, and contact information for, regional VC associations, such as the Atlanta Venture Forum and the Colorado Venture Capital Association. Angel investors aren't quite as organized, but there are organizations that match up angel investors and entrepreneurs. Active Capital is one national angel investor organization. Angel Capital Association (www.angelcapitalassociation.org) is another; it will lead you to approximately 200 regional sites across North America, including Alliance of Angels, which is based in Washington state and focused on high-tech operations.
You could spend all day on the web looking at the organizations available before you even decide who to contact. But be warned: Unless you have a business plan, you're not going to get far. Everybody--save maybe your Uncle Mel, who might not be as discriminating--will want to know what you intend to do with the money that you want invested in the company. They're going to want a solid five-year business plan that includes projections and details how your business makes money, who your customer base is and how you intend to market to them--almost no detail is too trivial. So before you search for investors, buy some software or a book that can help you write a plan, or go to an organization like SCORE or your local Small Business Development Center and ask for help with writing a business plan.
Q:I'm on a budget. Can I afford to do market research?
A: You can't afford not to. Whether you're starting a business or releasing a new product, you have to know if there's a need for your product or service. If you're running a business and plan on releasing a product or service that customers have clamored for, then obviously, you've done some market research. In the case that you already know there's a need for what your business is going to do, you might want to collect thoughts from your existing customers about how much they'd pay for your new product or service, and what they really want out of it.
If you are starting a business but aren't certain there's a need for what you're offering, try contacting people or companies you think may be potential customers. If you come across as earnest, competent and capable, most people are going to want to help you by spending a few minutes talking to you, and you may find that some of these people will, indeed, someday become clients. You should also consider talking to the people at the top of your industry, whether at the chamber of commerce or at industry associations. You could attend a trade show and just talk to anyone you can find about the need for a business like yours, provided you're sure you're not going to give away any of your own trade secrets.
Keep in mind that the chamber of commerce sometimes has its own market research it can share with you. For instance, if you plan on opening a restaurant and are considering renting or buying a property on a street corner, you may find that your chamber of commerce can tell you how much traffic goes by the property on a given day.
Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.