Week 2: Getting financed
Spend the next week working on your pitch, your business plan, and on researching your financing options. Remember that your business plan isn’t set in stone. It should remain a “live” document as you progress and as you grow. Don’t stress about it, just use this week to focus your thoughts and bring everything you thought about and learned in week one together.
Day 8: Write a one page pitch
Consider your one page pitch (similar to an elevator pitch) the precursor to your business plan. It’s very similar to an elevator pitch in that it will lay out your business strategy in a format that is easy to digest.
It’s also 100x faster to write, easy to change, and has a number of other benefitsincluding making investors lives so much easier (hard truth: most of them won’t spend the time reading your full business plan. Maybe your executive summary, but not the full plan).
If nothing else, writing a one page pitch is a good way to distill your idea down to its essence. What exactly are you doing, who is your target audience, who are key partners or employees, and how much money do you require to get started?
The one page pitch is not a replacement for a formal business plan (many investors and lenders will still want to see this), but a good way to distill your ideas and to play with ideas.
You might not need a full day to write one but you can use it as an outline or backbone of your business plan and continue plotting what you might need to build out, research, or work on.
You can read more about creating an elevator pitch here or have a look at what a one page pitch looks like using our business planning and management dashboard, LivePlan. This should give you a good overview of what’s included.
Day 9 and 10: Work on your business plan
In week one we said, “start planning your business and not writing your business plan.” That’s because so many people think that a precursor to starting a business is writing out a long, formal business plan (that in all likelihood you’ll never use).
This is the last thing you want to do. The business plan should always be considered a live document. The plan you start with may well be different in a year, as your business changes, as the economy changes, and as your demands change.
That said, if you’re thinking about applying to banks for funding, you will need a business plan! The banks will be particularly interested in your financials, as obviously they will want proof they are not loaning money to someone who won’t be able to pay it back.
So, before you apply for funding, whether that’s through a bank, via an online site like Kickstarter, or directly to an angel investor, you should have a business plan.
Even if a Kickstarter backer or an angel investor doesn’t ask to look at your business plan, you could find an investor that does. If you don’t have one, you’ll be missing out on an opportunity.
Furthermore, this is the place for you to collate your findings, your assumptions, and your goals. You are very likely to change it, but to start with, it will bring all those things together and give you a picture of your business.
Here are a few resources related to business planning:
- How to Write a Business Plan
- Free Sample Business Plans
- The Different Types of Business Plans
- The Key Elements of a Financial Plan
Try to spend no more than two days writing your plan. Perhaps split it into two sections—the financial section and everything that comes before that.
You shouldn’t find it too hard given that you spent the first week planning out many of these areas. I suggest leaving the Executive Summary for last.
You can write your business plan in a simple word document or using software like LivePlan. We’ve created LivePlan to make the process simple and to walk you through each step.
Day 11: Take a day to explore your funding options
Your funding options will vary depending on the type of business you start. Popular funding options include:
- Bank Loans—a bank will definitely want to see your business plan.
- Small Business Association Loans—for a list of loans, see the SBA site, or see our summary of available loans if you need a quicker skim through what you’ve got on hand. The SBA will also likely want to see your business plan.
- Crowdsourced Funds—sites like Kickstarter, Indiegogo, Patreon and more allow people to register to request money in support of a cause. Each of these sites has a separate set of rules. Take a look at successful projects to see what’s worked. And, if you get the time, take a look at those projects that failed, to see what didn’t work!
- Angel investment or venture capital funds—we have published several articles on obtaining angel investment and venture capital funding, including what angel investors are looking for.
- Personal investment—in which you invest money into your business from your own funds.
- Friends and family—if it seems unlikely you’ll be granted a loan, or if your project isn’t suited to an online crowdfunding site, perhaps your friends and family are the next best people to turn to. However, consider how this will affect your personal relationships.
We’ve compiled a full list of funding options to help you get started. Remember, it’s a good idea to see what’s worked and hasn’t worked for others like you. If you’re a tech/digital startup, angel investment and venture capital funding may be perfect. If you’re a hobbyist, take a look at Patreon.
A few additional sources to help you find and understand funding include:
- How to Get Your Business Funded
- How to Secure Funding for Your Startup – the Infographic Guide
- My 13 Favorite Alternative Funding Options
Day 12 and 13: Start the funding application process
Once you’ve figured out which is right for you, begin the process today! Do something at least. Call your bank, drop in to your local SBA office, set up a Kickstarter page, research and approach an angel investor (email them at the very least) or ask for an introduction via someone you know.
Just keep moving.
Day 14: Get set up on LivePlan
I’ve put this in as a full day, but if you’d prefer to write your elevator pitch and your business plan on a Word document, that’s fine. Use the day somewhere else.
The reason I continue to suggest LivePlan has to do with how easy this software makes it to update and write your plan, to create a one page pitch, to create financial statements without needing to do complex calculations yourself and, when you’re up and running, to use the Scoreboard feature to monitor how your business is performing.