Tips for Funding Your Online Business - dummies

Tips for Funding Your Online Business

A written business plan is an absolute must for an Internet venture. In fact, if you’re seeking funding, you’ll have a hard time finding a serious investor who will even let you past the receptionist without a detailed plan down on paper (but not too detailed). One phrase to remember is “short and sweet.” Some old hands in the game swear that ten pages is the absolute limit.

Consider a few other tips when tailoring your plan for investors:

  • Describe in a single sentence or two what makes your venture different from a thousand other e-businesses hoping to succeed.

  • Avoid technical jargon in favor of plain, everyday language.

  • Emphasize the expertise of your management team.

  • Include a complete analysis of the marketplace — not only the obvious markets, but also the tougher markets to break into.

  • Explain in detail how you’ll use Internet-specific marketing tools, such as social networking to attract customers.

  • Describe your competitors and how you plan to distinguish your company from the rest of the pack.

  • Include a thorough overview of your financials and a summary of what they mean.

  • Define your company’s growth potential.

Present your condensed business plan, but keep the full-blown version close at hand. If all goes well, investor prospects will want to see and find out more.

With the lessons of the dot-com bust came new scrutiny of the business plans of Internet ventures by everyone from bankers to venture capitalists (VCs). The recent economic downturn made investors and banks even warier. Don’t be discouraged. Yes, you have to spend more time and effort hammering out a rock-solid plan, but the investment will pay off for you and for people who sign on to support your dream.

A serious business plan can provide the momentum you need to keep on going when the going gets tough. Truth is, successful entrepreneurs return to their written business plans time and again to recapture the inspiration, the spirit, and the direction that started them out planning a business in the first place. Don’t go online without one!