.Especially during tough economic times, many small business entrepreneurs find it hard to raise the capital they need. Banks reject their loan applications, and they can’t get investors to say “yes” to their proposals. However, many of the rejections are a result of the mistakes made when seeking financing.
From the article “7 Small Business Start Up Money Seeking Mistakes”, here are seven common mistakes you need to avoid when looking for startup financing for your business:
- No borrower risk: asking a lender for 100% of the capital requirements.
- Purposeful business plan: a business plan should always be prepared from the point of view that the primary benefactor of the process of creation and preparation is the underlying business.
- Poor working capital projections: instead of focusing on assets to be acquired, make sure your plan has realistic cash flow projection
- No real marketing plan: financiers want you to be able to clearly articulate what you’re going to do and why its supposed to work along with the related costs.
- No rationale for key assumptions: plan needs to be rationale with well-documented assumptions
- No expertise and support team: financiers want to see that you have the knowledge, expertise, and support to make the business successful
- Presentation: be prepared to impress the heck out of the lender