To make an entrepreneurial dream a reality after developing the business idea and creating a business plan, one will need cash. Catching the investor's attention is the first step in putting the best business plan into action.

It's natural to feel anxious when your capacity to raise money depends on a 10- to 20-minute pitch to impress the investor. It's a stressful situation, therefore you need to perform at your peak.

How can you overcome your fear and win over prospective investors?

About how to wow potential investors, here are some interesting tips with whose help you can attract investors.

1. How Can A Business Plan Impress The Investor?

2. How Do I Talk To Investors?

3. Things A Business Plan Should Include for Investors

4. Types Of Investments

How Can A Business Plan Impress The Investor?

Investment cash is essential for startups, businesses, and other endeavors. A strong business plan that is ready for investors must lay out the foundation and strategy.

Therefore, to secure the capital you need from venture capitalists, accelerators, angel investors, grants, private funding, or other forms of funders, you must have a strategic business strategy.

The strongest impressions are the first ones, and here are some tricks on how to present your business plan:

1. Cutting The Chase

   Due to their busy schedules, venture capitalists, accelerators, and angel investors anticipate that entrepreneurs will conduct the necessary research before approaching them. They only decide to advance projects that have a strong business plan. Read more about How to write a business plan in our previous blog.

   Investors can see in your plan how well you understand your market, product, strategy, and exit plan to scale the business.

   A third party's major concerns include how your product or service will get traction in the market, profitability, and what are the potential exit plans unless your investors are only close family and friends, so cut the chase and be direct while presenting to investors.

2. Personalize your pitch

   

   Before approaching possible investors, do your homework on them. Concentrating on people most likely to be interested in your investment opportunity will allow you to work efficiently and save time.

   Maybe they already have a stock portfolio. If so, you should look at the initiatives that have drawn them successfully and seek recurring patterns. To customize your pitch to an investor's preferences, you must ultimately comprehend their priorities.

   Find the best angle to pitch your project to excite investors. A financer who frequently invests in environmental projects will undoubtedly be curious to hear about your business's sustainability efforts.

3. Choose Co-Founders Wisely

   Have you ever had a co-founder? If not, you may want to locate one right away. They are an excellent approach to fill in any gaps in your knowledge and experience.

   For instance, you might be the mind behind a fantastic new invention but lack business sense. Investors will be more interested in investing in a business project if it has a co-founder with a business background.

   If the idea of pitching makes you incredibly uncomfortable, you can choose a co-founder who can speak with assurance.

4. Refine Your Business First

   Make sure your business is in the finest condition it can be before you begin your small business funding in front of others. Participating in a startup accelerator is one approach to do this.

   A renowned accelerator has several advantages, including the chance to network, meet mentors, and solve any problems you may have had while developing your idea.

   Graduating through some accelerators could impress and draw in potential investors because of their stellar reputations.

5. Build A Strong Brand Online

   Before investing in your company, small business investors will undoubtedly study it online, so make sure what they discover is favorable. If you can collect a group of supporters before you start pitching, it demonstrates interest in your project.

   A shoddy online presence won't give people confidence in your skills. For good first impressions, your website and social media profiles should be current and polished.

6. Experiment With New Ideas & Think Out Of The Box

   

   It's crucial to remember that company investors aren't always seen as wealthy individuals wearing pricey suits. Alternative sources of funding are now available.

   Perhaps collective funding is a good fit for your project. This can be facilitated through internet platforms that connect interested parties with investment possibilities.

   The experience to pitch business ideas on these platforms is distinct from the conventional investor pitch. Examine other projects on your preferred platform that gathered money effectively to get ideas for your strategy and to discover how they met their objectives.

7. Don't Overload With Information

   It can be tempting to share every piece of information about your project that is available when you're trying to persuade an individual small business financing. But if you focus on quantity over relevancy, you can miss out on crucial nuances that could make or break the purchase.

   Make the procedure as simple as you can for investors rather than dumping information on them. Provide relevant information in a concise, understandable manner. If you make things too complicated, it will probably be difficult to hold their interest.

8. Emphasize Your Creativity

   Investors have presumably seen a lot of pitches, therefore they are probably getting tired of the same old. Of course, you shouldn't base your pitch on cheap tricks, but you should focus on and emphasize the distinctive qualities of your project.

   Clearly state what makes your business plan unique and how it will help your company beat its rivals. What does it offer that no other company in your industry does not? The main objective is to create excitement. Investors in your company should be motivated to support your start and raise investment.

9. Showcase That You Have The Best Team

   Investors for small businesses often examine the management team behind a possible investment opportunity because they want to know that they are driven, talented, and the finest in their field.

   Therefore, it's crucial that you not only appoint outstanding personnel but also take care to speak to investors that you have assembled the most qualified team for the task at hand. After all, even if a project seems excellent on paper, it can still fail quickly if a strong team isn't behind it.

10. Show Them The Connection With Your Customers

    Recurring clients are an indication of a successful company. Additionally, maintaining close relationships with clients across all channels is always a positive sign for a possible investor.

    Make sure you build strong relationships with your customers and can demonstrate to potential investors that you have devoted followers who will support your brand no matter what.

How Do I Talk To Investors?

What you say and how you say it affects how investors for small businesses view your plan and the course it is on. Investors are one of your company's most crucial target markets because they decide how much funding to give your project.

The majority of investors generally rely on their choice of the information they get from the company itself. For your company to be successful over the long run, pay greater attention to how you communicate and appeal to investors.

• You can connect with investors using a variety of techniques, like news releases and annual reports. Companies employ a variety of strategies to deliver the proper message to both present and potential investors. Produce pertinent press releases and send them to certain media outlets.

• Learn about the trade journals in your sector. You'll develop a relationship with the editors and reporters as you communicate with them, which will assist you to get coverage when you release a press release.

  Sending out press releases should only include pertinent information. For instance, you should surely include it in a news release if you recruit a well-known manager for your executive team.

• When choosing whether to enhance or decrease their investment, investors may search for media coverage of your business. Investor pride and confidence in your firm will increase if your company obtains favorable press.
• When promoting news releases for significant announcements, you might want to think about working with a public relations agency. Companies can assist you in pitching your press release to media outlets that cover your sector.
• Positivity in Social Media Interactions: Investors can gauge your business valuation based on your social media presence. Being present on social media sites like Facebook, Twitter, and Instagram allows a business to demonstrate that it is engaged, active, and customer-focused. Social networking is simply required for many business-to-consumer businesses.
• Customers want to believe that businesses are somewhat approachable on social media. Social networking is a great platform for spreading good press about your business, client endorsements, and announcements. Investors will be drawn to your company because of the positive aura that all these factors together will provide it.

Companies need to have a procedure in place for dealing with complaints and critical remarks because they have no control over what people say about them on social media.

Investors won't be unduly concerned about the unavoidable bad noise on social media if they see that your company handles negativity with professionalism and kindness.

Here's a closer look at how to communicate with investors to increase their trust in your business.

• Use Market Terminologies To Display Your Product
• Recognize Your Competition
• Explain The Value Of An Investor To Your Company
• Have a concise pitch

Things A Business Plan Should Include for Investors

Before presenting your pitch, it's critical to know what the investor will be looking for:

• The business strategy will outline the given goods or services, how they will gain popularity, and how quickly they will do so.
• The second thing that investors will consider is the exit: how much, for how long, and how will they get their money back?
• Thirdly, how much investment money is needed to expand a business to the point where investors may get a return on their money? Additionally, how many additional rounds of funding might be required to reach the next milestones?

You will be ready if you have these responses prepared.

• Investors also consider several other aspects, such as a strong management team or advisors with a track record of success.
• They must be persuaded that the product offering has a definite competitive advantage and the potential to raise and sustain the company's worth, which could include new markets that the same product or service can enter in the future to expand.

Types of Investments Available

Simply said, investors have the potential to be the startup's lifeblood. A startup can be propelled from its inauspicious beginnings to ultimate success with the aid of the appropriate investor. However, picking the incorrect type of investor for your particular firm could ultimately be more detrimental than beneficial.

Look into several types of investments and the possible advantages each could have for your business:

• Angel investors

  Individuals are angel investors. These investors either make more than $200,000 a year in income or have a net worth of at least $1 million. They can be found in all business sectors, although they typically engage with business owners who are halfway between receiving their initial angel funding and engaging in venture capital.

• Peer-to-peer

  Individuals or groups may act as peer-to-peer lenders. They provide funding for small enterprises. You must apply to businesses that specialize in this form of funding if you want to be considered for peer-to-peer lending. These businesses help lenders locate the businesses they want to finance.

• Personal investors

  Businesses might ask their networks, close friends, and family for their small business financing. Speak with a professional if you have willing helpers because just a select few startup investors, and you'll need to present comprehensive evidence.

• Banks

  The traditional source of business growth is credit which is from banks. You must present evidence of a revenue source or collateral before your loan application is authorized. Banks are therefore frequently a preferable choice for established enterprises, however, you don't have to be a billionaire to obtain finance.

• Venture capitalists

  Venture capitalists are private investors who lend money to businesses with strong development potential in exchange for an equity stake. Once a company has shown the potential for large revenue, they frequently spend sizable sums of money on it.

Are You Set To Impress The Investors?

Investors are the first step towards your flourishing business, therefore you need to be very precise about how to attract investors.

Worry not, as we have got you covered, from how to write a business plan to how to pitch it.

Imagine this: You have a brilliant business idea. You scribble it down and get to the research immediately. Once you have identified competitors and completed the market research, you decide it is time to reach the right investors with a compelling plan.

You are all flared up to start a business requirement document. But that is when a question like “how do I start writing?” becomes the roadblock.

This is not just a challenge you face alone; many with the same flare to start a business are subject to the same bottleneck.

The question is, “How do you start building a business plan without a hitch?”

It is simple, you need an outline that helps you create a business plan in the most engaging way possible for investors. To help you create your business plan outline, we’ve laid a few steps.

But first, let’s understand what it is and why you need to have a business plan outline.

1. What is a Business Plan Outline?

2. Why Write a Business Plan Outline?

3. How to Write a Business Plan Outline?

4. Build a Complete Business Plan Outline Now!

Why Write a Business Plan Outline?

The most effective way to convince any investor about your business idea is to help them get answers to these three critical questions:

• What does your business stand for?
• What makes your idea unique compared to competitors?
• What is in it for them?

Your business plan can help you answer these questions.

To avoid such adverse reactions, it is important that you create an outline first and then add your researched information in that format to better present your idea to investors.

How to Write a Business Plan Outline?

Now that it is clear why an outline is crucial to writing a business plan, it is time we see what all it should cover. Most experts online will encourage you to start with a table of contents or an index. But you can skip this step if you are using a knowledge base.

With Knowledge base software, you can display a table of contents throughout the plan. They can access any point in question at any time. Except, if you are not planning to make your outline virtually using an internal knowledge base solution, it is advised to create an index first.

An index will help you list all the pointers you aim to cover in your business plan. It makes it easier for investors to go back and refer to the data they’ve already read during the review process.

1. Create an Engaging Executive Summary

   

   First impressions are lasting impressions

   No one wishes to take this expression lightly. But here is a fact: there is no way investors will continue reading your business plan if it fails to create an impact that encourages them to read the plan further.

   Your executive summary is a critical factor for investors to decide if your project is worth financing or not.

   What is an executive summary?

   The executive summary is mostly written once you are done writing your entire plan. That’s because it summarizes and offers an introduction to your plan.

   Here’s a list of questions your executive summary must answer:

   • Who is your target audience?
   • What do you plan to sell?
   • How will your offerings evolve over time?
   • How much should investors expect to gain post-financing your business?
   • What is the initial investment you seek to get your business started?

   With these questions answered, it will be easier for investors to read through the entire plan.

2. Describe Your Business with a Detailed Description

   

   The business plan is incomplete without its detailed description. Consider this part of the plan as an "about us" section. You need to explain what your business is and why you decided to take up the project. The more detailed it gets the better.

   However, it is recommended that you cover sections like:

   1. Company background & history: Explain what factors compelled you to start this business. Also, explore when you thought of this idea and what was the source of its inspiration.
   2. Structure & ownership: Let your investors learn about other shareholders who plan to help you gain the necessary resources to build the planned product or service. You should also share details about business registration. Let investors know where your company is registered and if you have any legal structure in place. This will help them check your eligibility as a potential business investment.
   3. Location: Help investors know where you plan to open the office. Make sure to include a map that helps them understand where the location is and what could be the possible expenses to get the needed resources to the location.
   4. Experience: We are not just hinting about your experience and credibility in the market. You also need to stress the experience of those who will help you execute your plan. Let the investors understand that you are backed by experienced individuals in the sector. Also, do not hesitate to share skill gap-related concerns. The sooner they are tackled the better.
   5. Initiatives & cause: If there is any initiative you wish to support through your business, let your investors learn about it fast. You must stand by a cause that you wish to donate to or support through your business. While this will help you build a positive impression on investors, it is good for branding as well.

3. Bring Together Your Market Analysis

   

   Market analysis is quite complex. You need to figure out and confirm a lot of factors before you settle on a business plan. To help you get started with the outline of your market analysis section, we’ve listed a few points below.

   1. Target audience: This is no doubt the first aspect that investors would be interested in learning about. Therefore, it would be a great idea to discuss your target audience first when you start with the market analysis section. As you explain the target audience, make sure you explain why you aim to target them and how will this audience benefit from your offerings.
   2. Demographics: Share details around the specific demographic you wish to target. These details can be inclusive of age group, location, gender, and more. With a detailed insight into the demographics, they can confirm if you are going to target the right audience or not.
   3. Segmentation: Once done describing the details on demographics, it will be easier for you to explain which segment you plan to target. You can also segment this audience further into groups of potential buyers and those who will bring in more value to your sales.
   4. The Need: Explain how your products and services will match the growing need of the customers. You also need to explain the possible reasons that encourage customers to make the purchase and if it is something that they will need regularly.
   5. Market Regulations: Another factor that will need to be discussed at length is market regulation. If you identify which market regulation applies to your business, it will be easier for investors to understand the possible ways you will comply with them.

4. Identify Your Market Competitors with a Competitive Analysis

   

   Let investors know that you are not behind your competitive analysis. This section will be a terrific way to introduce your direct and indirect competitors. Elaborate about their strengths, weaknesses, and the USP that helps them stand out in the market.

   Other than these crucial factors, you should not miss answering questions like:

   • Who is this competitor? (Name, brand visibility, and where they are located)
   • How big is this competitor? (Number of employees, rough customer count, and more)
   • Who is their target audience? (Demographics and segmentation)
   • What do they offer? (Discuss unique characteristics, services, products, pricing, and more)

   With this detailed outline, you can give a stand on how your brand will be positioned in the market. Concisely, it will help you show investors how different you are from the competitors.

5. Build an Actionable Sales & Marketing Plan

   

   This is a dedicated section to display your numbers. From product pricing to every promotional activity, you plan to undertake, all need to be a part of this section. You also need to highlight the unique selling point of your product as it will be a part of your marketing plan. On top of these top selling points, here is a list of things you can add.

   1. Milestones: It would be a good start if you show investors the goals you plan to achieve. Remember that if they are relevant, achievable, and measurable according to the resources you plan to locate in the business process, the easier it will be to convince investors of your business.

   2. Risks & Mitigations: This is yet another pointer you cannot miss when building the outline for a sales and marketing plan. Both you and the investors can anticipate risks or roadblocks you may face while bringing the business plan to life.

      While you do share the possible risks your business might get subjected to in the future, make sure to identify the best ways to overcome them. This will help you increase the investor’s confidence in your idea and foresight.

   3. Marketing plan: USP is indeed a crucial aspect of any marketing plan. However, that is not the only thing you need to focus on when trying to reach out to your audience.

      Marketing is about the reach you have once you start as a brand. It is also about identifying the best channels to help you reach as many potential customers as possible.

      You also need to show what your competitors are doing as they take a step forward to become a brand. More importantly, you need to decide the marketing initiatives and their stakeholders who will help you implement them successfully.

   4. Profits: Predicting your sales target is important for any investor. By predicting how many sales you make in a week, month or quarter, investors can get an idea of when you will start making profits. To predict profits, you need to arrive at the right pricing that gives you a competitive edge over others while being rational about it.

6. Inform Investors About Operations Plan

   

   In this part of the business plan outline, you need to help investors understand how your organization is planning to function. Here is what you need to include in this section.

   1. Employment plan: Share your employment plan that is divided into phases. Let investors know how many people you plan to hire in the first phase of your business. Initially, you cannot go all out. Decide task priorities and the resources needed to build a base for your business. Also, highlight the possibility of increasing the workforce as your business grows.
   2. Suppliers: Let us not forget the suppliers in the operation plan. Give details about the suppliers you plan to work with. Investors can check if the suppliers are reliable sources or not.
   3. Assets: It is also important that you inform investors about the assets you plan to use or are crucial for the functioning of your business. Be specific about these assets and explain how they will play a role in the development of your products and services. On top of that, explain how you aim to protect assets or intellectual property that streamlines the functioning of the business.

7. Show a Realistic Financial Plan

   

   A financial plan plays a crucial role in the decision-making process. Investors need to understand how you plan to allocate the capital received. As you give a bifurcation of the capital in the financial plan, here is a list of things you can start focusing on.

   1. An Initial/Start-up funding: The first thing you need to cover in this outline is the initial funding you will require to give your business a kick-start. Explain the fund’s allocation and how shareholders may benefit from this initial funding.
   2. Cost Structure: Your cost structure needs to identify operational risks that a business may potentially face. You can use both breakeven and operating leverage that will allow investors to evaluate operational risks hassle-free.

   3. Financial Assumptions: Let us not take investors’ assumptions about your financial plan lightly. If you are proposing a business plan for starting your app, the development cost may keep as you grow the app. However, this assumption may not be true in the case of all app-based business ideas.

      Make sure you identify the assumptions around the revenue you may earn and the cost of implementation. By doing this, you can clarify a lot of doubts that investors may have about the funds you may require to keep the business running.

   4. Forecast: Another important aspect of your financial plan is to bring the sales forecast to light. You need to include all the key aspects of your business plan outline like competitor analysis, marketing strategy, sales plan, and more.

      These crucial factors will help investors understand why you are projecting a certain number for sales and profit in the plan. You can share a forecast for the next three to five years with them.

8. Prove Why Your Business is a Credible Investment

   

   This is a popular section that goes by the name ‘Appendix.’ This section is your savior. There are a lot of things that you cannot add to other sections of the plan.

   But no worries, Appendix is one section where you can add the additional details of your plan to make sure you have not left anything out from your research. You can share additional information like office layout plans, stakeholder agreements, credit histories, and more.

Build a Complete Business Plan Outline Now!

Creating your business plan outline can be confusing, especially if you are making one for the first time. Sadly, a lot of business ideas get rejected by investors because they fail to deliver the right message, or they feel lacking in presentation.

But fret not. Our business plan outline will allow you to bring your idea to life. This detailed and well-structured approach helps you expand on your business values, what you know about the market and your competitors, and more. That is not all.

You can even find ways to add all the additional information you have found during the research and ideation process that helps investors arrive at the right decision.

Concisely, it will work as a guide that will help investors know your idea better and assist your team to align with your direction of work.

Once you start a business, it’s immensely crucial to manage your business transactions and keep every record of them. Many entrepreneurs don't focus on it and thus pay the price later on.

Let us know how.

Imagine it’s the end of the first financial year of your business and you are excited to know whether you have crossed your financial projections or not.

You start estimating but after a while, you find yourself in bloodsucking chaos. Why?

Because you were using your personal account for business purposes and now it’s frustrating to separate business and personal transactions.

It happens with many new entrepreneurs and the only solution is - a free business checking account.

As an entrepreneur, your responsibility is not to work for the most number of hours but to make complex processes simpler.

By making things simpler, you save time that you can use to grow your business.

Not only this, a Business checking account makes your entrepreneurial journey a little easy in many ways.

1. How Does It Make Your Journey Easy?

2. Best Free Business Checking Accounts

3. Things to Consider Before Opting for It

4. What Do You Need to Open It?

How Does a Free Business Checking Account Make Your Journey Easy?

1. A free business checking account makes tax filing easy. You can use your business checking account statement and note the expenditure and earnings.
2. It builds trust in your customers or suppliers when they do a transaction with a business account as your business doesn’t seem to be a hobby anymore.
3. When you open a free business checking account and your business is registered as an LLC or corporation you get personal liability protection.

Keeping your business accounts separate safeguards personal assets.

When money realizes it is in good hands, it wants to stay and multiply in those hands

- Idowu Koyenikan

1. Bank of America

   If your business deals with a lot of cash deposits then it would be ideal for you to sign up for a business checking account at Bank of America.

   You need to deposit $100 to open a business checking account.

   You will also get free access to 16,000+ ATMs across the United States. Having said that, you will have to pay $2.5 per transaction if you use any third-party ATM.

   Bank of America provides two kinds of accounts - Business advantage fundamental and Business advantage relationship.

   Here are a few points you must consider before opening a Business advantage fundamental checking account -

   • It allows you to make 200 free monthly transactions and afterward a small fee of 45 cents is deducted per transaction.
   • The free cash deposit limit at Bank of America is $7500. If you exceed the limit, you will have to pay an additional 30 cents for every $100 statement cycle.
   • You must maintain an average monthly balance of $5000 or use your debit card for payments of at least $250 to waive the $16 monthly charges.

   Now let’s know what the Business advantage relationship

   • The account offers at Bank of America -
   • It allows you to make unlimited free transactions.
   • You can deposit $20,000 of cash without any fees. Afterward, a 30-cent fee is applied for every $100 statement cycle.

   A $29.95 monthly fee is charged which gets waived off if you maintain an average monthly balance of $15,000.

2. Bluevine

   Bluevine is an online business bank account, ideal for entrepreneurs who do not need a physical branch and are looking for a business loan.

   Here are a few things you must know before opening a business checking account at Bluevine -

   • Bluevine has no monthly or transaction fees which means you are free to operate your Business checking account the way you want.
   • It is backed by Coastal Community Bank.
   • It provides an annual interest of 1.50% only up to a $100k balance.
   • To earn an annual interest, you should either make payments of $500 using your Bluevine debit card or receive $2500 every month.
   • To deposit cheques, you will have to use Bluevine’s mobile app.
   • To deposit cash you can go to the Green Dot retail location which charges $4.95 for every deposit.

3. Novo

   Novo is an online platform providing banking services to business owners.

   The best thing about Novo is that it refunds all the ATM fees including fees deducted by International ATMs.

   So if you think your business loses money as ATM fees you must read further to know what else Novo offers -

   • Novo allows business owners to make unlimited transactions for free with no monthly fees being charged.
   • Novo doesn’t offer interest on your balance.
   • You won’t have to pay any cash deposit fees and no minimum deposit is required.
   • To deposit cash, you will have to use the United States Postal service.

   Balancing your money is the key to having enough

   - Elizabeth Warren Amelia Warren Tyagi

4. Chase

   Chase is one of the best small business checking accounts with zero opening deposits.

   Remember only go for it if you own a small business as it has certain limits which are not healthy for large businesses. Let’s know what all it has -

   • Chase offers only 20 free transactions and thereafter charges 40 cents per transaction.
   • It also offers a $300 cash bonus.
   • You can deposit up to $5000 per statement cycle for free and thereafter a fee of $2.50 is charged per $1000.
   • You will also have to pay a fee of $2.50, excluding ATM operator charges, if you use any out-of-the-network ATM.

5. Mercury

   Mercury provides everything that strengthens its nomination for being the provider of an online business checking account.

   It is a completely online financial platform backed by Evolve Bank and Trust.

   Let’s know what mercury offers -

   • It charges zero monthly fees and transaction fees. Moreover, no minimum deposit is required to open a Business Checking account.
   • It doesn’t accept cash deposits so if you deal with a lot of cash, mercury might not be the ideal bank for you.
   • If you spend more than $2000 using a Mercury debit card, you will get $200 as a reward.
   • It allows free access to the AllPoint ATM network and no charges are levied for out-of-the-network ATMs except operator fees.

6. Axos Bank

   Axos is yet another completely online platform providing one of the best business checking account services.

   Here are things Axos is known for -

   • It does not deduct the monthly service fee and no minimum deposit is required to open a Business Checking account.
   • It offers free unlimited transactions and cash is deposited via Moneypass.
   • The fee deducted at out-of-the-network domestic ATMs is refunded.
   • For every International wire transfer, a fee of $50 is charged.

7. Brex

   Brex offers one of the best Business checking accounts only for incorporated businesses.

   It doesn’t provide a debit card but gives you a credit card with a lot of rewards. Also, you cannot deposit cash at Brex.

   Let’s know what else Brex offers -

   • It allows you to make unlimited monthly transactions for free.
   • If you use its credit card, you will get cashback for almost every purchase.
   • It is an online platform, therefore, no physical branches are available.
   • Wire transfer, whether domestic or international, is completely free.

8. NBKC

   NBKC provides services in online mode but also has one physical branch in Kansas City, Missouri.

   Let’s know what a business checking account at NBKC looks like -

   • It deducts no monthly fees and zero deposit is required for opening a business checking account.
   • It allows you to make unlimited transactions for free.
   • No fee is levied on the incoming domestic wire transfer.
   • For outgoing wire transfer, a fee of $5 is levied whereas, for incoming international wire transfer, a fee of $45 is charged.
   • You can deposit cash at any of the 34k+ Moneypass ATMs.
   • If you use out-of-the-network ATMs, you will be refunded up to $12 of fees charged by ATMs.

9. Truist

   SunTrust and BB&T Banks came together to form Truist simple Business checking account.

   It is probably one of the best online business checking accounts for startups and sole proprietors.

   If you own a young startup or working as a sole proprietor, have a look at what Truist offers -

   • There are no monthly charges at Truist making it suitable for low-budget startups.
   • You can make up to 50 free transactions for free and afterward an additional $0.50 is charged per transaction.
   • Along with high-quality online services, you get access to 2500+ physical branches and 3500+ ATMs.
   • You can deposit up to $2000 of cash for free and afterward an additional charge of $3 is levied for every $1000.

10. Iberia Bank

    Iberia Bank's free business checking account is ideal for entrepreneurs looking to have only one financial institution for all their banking needs.

    If you open a business checking account at Iberia, you might also get 2 personal checking accounts for free. This is what makes Iberia best for new entrepreneurs.

    However, an opening deposit of $25 is required to open a business checking account at Iberia.

    Here’s more about what Iberia Bank Free Business Account offer -

    • It provides up to 500 free transactions per statement cycle and allows free cash deposits of up to $10000 per statement cycle.
    • You get free access to in-network ATMs but an additional fee of $2 is charged for using out-of-the-network ATMs.
    • You also get access to around 200 physical branches in the southeastern U.S.

Things to Consider Before Opting for a Free Business Checking Account

There are a lot of options available to open a free business checking account. But every business has different banking needs and therefore you must sign up with a bank that can fulfill your needs.

3 Things You Must Consider Before Opting for a Business Checking Account -

1. Limits on cash deposit

   If your business deals with a lot of cash on a daily basis you must look for a bank that allows huge cash deposits without any extra charges.

2. Transactions Limits

   Many banks have a free transaction limit of 200 transactions per month which includes ATM deposits, teller deposits, and transactions through debit and credit cards.

   If you think this won’t meet your needs, you should go with a bank that provides more no. of free transactions.

3. Service charges

   A lot of banks deduct monthly maintenance fees to let you use their services. You must ensure it before opening the business checking account.

What Do You Need to Open a Free Business Checking Account?

Now when you have decided which bank you would give a chance to serve your business, it’s time to know the things you need to open a free business checking account.

1. You first need a social security number if you are a sole proprietor or an employee identification number if you run a corporation, limited liability company, or a partnership company.
2. A driving license, passport, or any government - issued ID is a must - goes without saying.
3. If you have registered your business as an LLC you must have a business license and Articles of Organization whereas, for corporations, an Article of Incorporation would work.
4. You must also have a partnership agreement if your business has other owners too.
5. The last thing you need, if your business is registered under a name different from your legal name, is a Doing Business as (DBA) certificate.

Can I Use a Personal Checking Account for Business?

Well, using a personal checking account for business transactions seems to be simple but in reality, it causes a lot of headaches.

A business checking account helps you in monitoring the growth of your business.

Moreover, it also leaves a great impression on people from whom you receive or send money.

Can You Deposit a Check on a Business Checking Account?

Yes, you can deposit the check in a business checking account. And as far as depositing is concerned, anyone can deposit a check but not everyone can cash out the cheque.

When Should You Get a Business Checking Account?

If you need an answer in one word, it would be TODAY. Yes, don’t wait to hit that revenue goal for opening a business checking account.

A business checking account will make your processes smoother and will eventually help you reach your goals.

Bottom Line

A Business checking account has many use cases including ease in tax filing, getting loans, etc.

If you are still building a business without a business checking account, you are missing out on a lot of perks. Also, the credibility it adds to your business is something you need in the early days of your business.

Opening a business checking account is one of the most underrated and underappreciated moves by an entrepreneur.

After opening a business checking account, you need to work on growing your business.

And if you want to grow it 2X Faster, check out Upmetrics.

In a world where everyone talks about unicorns, small businesses strive to become camels! Just like camels get past the changing climates and survive without food and water for months, small ventures try to navigate through every thick and thin despite being low on resources.

But unfortunately, most small businesses succumb to adverse climates and only 33% of them actually make it to last 10 years or longer. The reasons behind a business getting failed are many & not playing along with the new business trends in the market is one of them.

If you’re planning to grow your business and do not want to miss out on what the market is up to, this blog is for you. Before we dive into the top small-business trends in 2022, let’s take a glance at what a small business really means.

Why Small Businesses Should Keep an Eye on the Changing Trends in 2022?

If your business is not on the Internet then your business will be out of business - Bill Gates

Can we all agree on how apt this quote is? And the pandemic proved it sooner than anybody would have imagined.

Now, since the Internet is a place where trends go in and out in the blink of an eye, the same Bill Gates quote applies to small-business trends as well. Entrepreneurs who want to pave their way in the new normal, just can’t miss out on the upcoming trends and predictions about small businesses in 2022.

Though anyone can hardly predict extreme situations like the COVID-19 pandemic, entrepreneurs CAN analyze the stats and listen to the industry experts to sharpen their vision for the future.

The Top 10 Trends & Predictions for Small Businesses for 2022:

1. Online & Offline Stores Will Co-exist

   

   Brick-and-Mortar Stores Vs The Online Ones. Who is the winner? You can say it’s both! There’s no doubt that online shopping gives customers the convenience to shop from the comfort of their homes, but people still cherish shopping offline.

   Everyone’s hoping for COVID-19 threats to finally come to a halt so that they could get back to their normal lives. Though the resurgence of the virus is again looming in the news, the belief in vaccines is keeping the hopes up. (This is a gentle reminder for you to get your booster shots as suggested by the FDA.)

   Reasons why hybrid shopping (online+offline) will be a trend in 2022:

   • Humans are social beings

     They like going out, visiting places, spending time with loved ones, and engaging with other people. And shopping offline is a sweet spot for each of these factors.

   • Eco-consciousness

     Consumers are getting aware of the negative impact the whole shipping process leaves on the environment.

     In fact, a survey conducted in 2021 by NRF & IBM suggests that 62% of people are ready to change their purchasing habits to reduce the environmental impact.

     Thus, they are inclining more towards the approaches that have a lesser carbon footprint. And shopping offline is one of them.

   • Quality assurance

     Given the duration between purchasing the products and getting them delivered, online shopping demands patience. Plus, buyers can’t touch, feel, or try out the product right away. And this gives offline shopping an edge over online shopping.

   • Empathy towards local businesses

     Local businesses were badly hurt during the pandemic. Consumers are now taking into account this fact and they want to support the small businesses in their local region.

   Customers want to support local businesses but they also seek convenience. Thus, small businesses must provide a smooth curbside pickup option to keep their customers satisfied and happy.

2. Employees Are Equally Concerned About The Environment

   

   The same survey by NRF & IBM that revealed that consumers are ready to shift their purchasing habits towards sustainability, also revealed that nearly 68% of employees reported that they’re more likely to apply for jobs in environmentally-responsible organizations and 48% are even willing to accept a lower salary.

   Here’s how sustainability-concerned employees will push companies to be more sustainable:

   • Small-business could be seen taking action towards reducing their carbon footprint as much as possible. Measures like avoiding plastic usage, proper waste management, and even preferring online meetings to curb air pollution can be taken into account.
   • Apart from the tangible pollutants, companies can also opt for green web hosting services too. That’s right! Websites use energy and many companies are trying to offset their energy usage to suppress their carbon emissions.
   • Companies can also flaunt this good initiative on social media platforms and by hiring posts to win customers and attract more talent.
   • Given the Great Resignation and mass employee churning, small businesses can take these small things seriously not only to woo their customers but also to retain their employees.

3. More Focus on Finance Management

   

   Mismanagement of funds is one of the primary reasons why small companies fail in the nascent stage itself. The owners of poor-performing startups are often oblivious to how their company is generating revenues and how the money is getting spent. This ultimately dries up the capital and puts the company out of operation.

   To prevent such a financial crisis, small business owners might be taking some measures beforehand. Thus, investing in financial coaching & hiring finance consultants can be seen as one of the latest trends that the market can see in 2022.

   Small businesses are starting to dig into the details of their financials more now than ever. I believe financial coaching and growth strategy will be a big focus for the latter half of 2022. It's unfortunate but most small businesses can't afford to hire a CFO. Consultants are the next best thing.

    

   - Ryan Lucia, Such n Such Media

      (Source: Forbes)

4. Making The Most Of Social Media Marketing

   

   Being short on working capital is not something to cry upon. At least not in 2022. Small businesses are going to rock their way in the digital market with the help of social media just like they’ve been doing so far.

   Free marketing strategies like creating a personal brand on LinkedIn, sending cold DMs on Instagram & LinkedIn, and volume posting on video streaming platforms like TikTok will be on spree this year too.

   Social media platforms like LinkedIn & Twitter work better for service-based or B2B companies. Whereas if you’re running a B2C or D2C business, Instagram, Facebook, & TikTok would be the best ways to generate leads for your business.

5. Leveraging ML & Automation To Boost Productivity

   

   A report from Zapier suggests that 63% of small & medium businesses say automation allowed their company to quickly pivot as a result of the pandemic.

   Automation tools help companies boost productivity by helping them bring their goods and services online or change their business model altogether. And this paradigm shift is no longer limited to the pandemic aftermath only. 66% SMBs say that automation & ML tools are now essential to run their business.

   The most common software tools that SMBs use to automate their workflows include Google Workspace, Slack, MailChimp, Trello, Airtable, Calendly, etc.

6. Email Marketing Is Here To Stay

   

   Despite being the most conventional marketing strategy, email marketing never goes off fashion and outperforms every other digital marketing tactic out there.

   Yes! even social media marketing can’t beat email marketing in ROI. And for small businesses, email marketing (if done right) can prove to be the Holy Grail, since it gives an impressive ROI of $36 on every $1 spent.

   Apparently, email marketing is going to stay on trend in 2022 as well. Though the concept of email marketing is old, the way we used to send emails has changed massively. Small businesses will be leveraging automation in their sales pipeline to leave no stone unturned in their email campaigns.

   Mobile devices account for 41.9% of all opened emails. Thus, optimize your campaign emails and make them more mobile-friendly to get the best results.

7. Experimentation With Trendy Content Strategies

   

   Doing regular experiments with marketing tactics is the only way to understand what exactly works for you. Businesses will be trying out the latest content marketing plans of action to get more traction for their business.

   These content experimentations may include

   • Creating short-form videos on Instagram Reels or TikTok;
   • Self-conducting or making guest appearances in podcasts;
   • Including videos in emails. It increases clickthrough rates by up to 300%. (Source: Spiceworks);
   • Creating captivating infographics and posting them in blog posts, social media, or emails.

8. Advanced Payment Choices

   

   Pandemic had created a boom in the new modes of the online payment system. Be it mobile transfers using UPI, contactless credit and debit cards, or even via cryptocurrency, the last two years disrupted how people used to pay money for the goods and services they purchase. And this trend is only going to thrive even more.

   Now that people have an understanding of Bitcoin, they’re gradually making a shift towards smart contracts and NFTs too. Apart from giving the customers more options to make payments, small business owners can also benefit from these smart contracts.

   Peer-to-peer transactions cut out the intermediaries and reduce underlying fees per transaction and this can help businesses save a lot of money in the long term.

9. Empathetic & Personalized Customer Support

   

   It’s interesting to note that 67% of customers are willing to switch brands due to poor customer service. Not only that, the customers even say that they will stay loyal to a company that provides quality customer support even if their product is not the best in the market.

   Such facts only conclude one simple thing. Customers want peace of mind. Whether you’re providing a service or selling a product, being empathetic to your customers can earn you their loyalty. And only loyal customers help you become a successful brand.

   Provide curbside pickup, offer home delivery, keep multiple touchpoints, try to respond quickly, listen to their issues with more compassion, and take genuine feedback. Become their favorite brand and let word-of-mouth popularize you!

10. Hybrid & Flexible Work Environment

    

    Remote working was already in fashion even before the pandemic. But COVID converted it from a mere privilege to an absolute necessity. And now more and more businesses are happily accepting this modern working culture.

    They can either keep their whole workforce remote or can opt for a hybrid model (a mixup of both in-office & remote employees) and run their day-to-day operations hassle-free.

    By hiring remote employees, businesses can

    • hire the best talents across the world,
    • cut down their payroll costs by outsourcing work,
    • maintain a flexible work environment,
    • provide a healthy work-life balance to their employees,
    • lessen the effect of 2021’s Great Resignation & continue their workflow.

Conclusion

Change is the only constant in the digital market. By keeping pace with the fast-changing trends, small businesses not only ensure their survival but can also compete with their biggest rivals.

Here’s a quick recap of the small business trends in 2022:

• 2022 will try to make a balance between online & offline shopping.
• Both customers and employees are getting more environmentally conscious & companies should too.
• Businesses will invest more in finance management and coaching.
• More focus on free marketing via free social media platforms.
• Implementing more ML & automation tools to increase productivity.
• Email marketing will thrive as it is.
• Content experimentation with videos, podcasts, and infographics.
• Wide acceptance of advance payment facilities including smart contracts & NFTs.
• Compassionate & personalized customer support
• Remote/hybrid working will continue (or even go up!)

Apply and take advantage of these ideas & predictions and grow your business to the next level!

We hope you find this blog post useful. Good luck!

A business is as efficient as its team and its management. It, therefore, becomes important for business owners to build a structured management team that achieves the objectives and goals set by the organization.

Andrew Carnegie, an American steel magnate, beautifully summarized it -

Teamwork is the ability to work together toward a common vision. The ability to direct individual accomplishments toward organizational objectives. It is the fuel that allows common people to attain uncommon results."

A business management plan helps build an efficient team, and formalize business operations. This helps businesses streamline strategies to achieve their goals.

It, therefore, becomes imperative that business owners pay utmost importance while writing the management section of a business plan.

So, if you are a business owner who is looking to formalize their business structure and write the management section of their business plan, this guide is for you.

Here’s a sneak peek into what you’ll learn:

1. What Is the Management Section?

2. Importance of the Management Section

3. What to Include in the Management Section?

4. Example of a Management Section Plan

5. Ensure That the Management Section Is Fool-proof?

Sounds good? Let’s dive in.

Now that we have defined what is the management section of a business plan, let’s understand why it is so important.

The Importance Of the Management Section Of A Business Plan

The management section helps you to:

1. Convince your investors (banks and government agencies) to disburse loans and grants for your business idea

2. Prove that your management team can execute your idea and if not, help hire the right fit for a position

3. Share how your advisory board can help your team succeed

What To Include In the Management Section Of A Business Plan?

The management section of a business plan helps in formalizing and structuring the management team plan and is comprised of

1. The Management Team
2. The Management Team Gaps
3. The Management Structure

Let’s understand them in detail.

1. The Management Team

   An organization's entire management team can be divided into parts - the internal team and the external team.

   • The Internal Management Team

     A business team consists of several departments. The most common departments are - Marketing, Sales, IT, Customer Service, Operations, Finance, and HR.

     These departments may or may not be required. It purely depends on the nature and functioning of your business. For example, a dental clinic may not require a sales department per se.

     The entire management team is compartmentalized according to their responsibility. This helps the business owners and investors be aware of the roles, benefits, ESOPs (if applicable), profit sharing (for sales), work contracts, NDAs (Non-Disclosure Agreement), and Non-Competition Agreements of the entire team.

     It is recommended that business owners collect and document the following information about their team:

     1. Educational Background
     2. Work Experience
     3. Accomplishments

     

     For example, your present VP of Marketing helped their previous company grow its bottom line from $3 million to $10 million over 18 months.

     It is important to co-relate your existing workforce's experience with present goals. This helps improve organizational productivity and helps your team succeed better.

   • The External Management Team

     The external management team is usually composed of - Advisory Board Members and Professional Services.

     Advisory board members help by :

     1. Establishing trust, showing results, and experiencing to the table.
     2. Increasing the confidence of investors and consumers.

     This helps attract talented employees to the team. Credible advisory board members show great commitment to a company’s growth. Therefore, it becomes important to document their experience and specialization in the business management plan. The advisory board members can help give valuable advice that internal team members need or lack.

     If your business has not or will not have VC funding, you may not require board members on your team.

     Usually, board members meet quarterly or monthly to provide strategic guidance in place of stock options in your company. This helps attract the best advisors and motivates them to invest in your business.

     For example, founders and business owners coming to raise funds in Shark Tank, a business television series, are looking for advisory members who would invest money and provide guidance at necessary steps.

     Recently retired executives and managers from corporations and other successful entrepreneurs would be great choices for an advisory board.

     On the other hand, Professional Service helps by

     1. Offering highly specialized advice and sharing knowledge.
     2. Business owners make key strategic management decisions.

     Such services help businesses leverage skills that would be difficult to build and acquire over a short period.

     Examples of such professional services are

     

     1. Accounting
     2. Banking
     3. Legal
     4. IT Consultants
     5. Marketing
     6. Business coaches and consultants

     After a brief overview of the Management Team of an organization, let’s dive into what to include in Management Team Gaps.

2. The Management Team Gaps

   The management team gap is an important part of the management section. Primarily because it helps document if your management team currently has gaps or missing skills. Your team may lack a few required skills while starting. The management team gaps help you to be aware and make efforts to close this gap.

   As a business owner, you must document what positions are missing and who ought to fill that position or take the responsibility.

   For example, if you need a VP of Sales, clearly document this in the section.

   Also, write down the job description and key responsibilities to be undertaken,

   Example - You might mention that role required 10 years of experience in the sales domain. The applicant must have experience handling a sales team, closing new accounts, working in tandem with the marketing team, and have relevant startup experience.

   Be as detailed as possible. This will help you build a checklist while interviewing the right candidate and also win investor confidence in your managerial skills.

   Following are a few key positions you would want to include in your management team:

   • Founder and/or, CEO
   • Chief Technical Officer (CTO)
   • Chief Marketing Officer (CMO)
   • Chief Operating Officer (COO)
   • Chief Financial Officer (CFO)
   • Chief Human Resources Officer (CHRO)
   • Head of Product Management (PM)
   • VP of Sales
   • VP of Marketing
   • UX Designer
   • Digital Marketing Manager
   • Business Development Manager
   • Customer Service Manager
   • Customer Success Manager
   • Sales Managers/Sales Staff
   • HR Manager
   • Advisory Board Members

   Let’s dive into the nitty-gritty of the management structure.

3. The Management Structure

   The management structure defines how a business organizes its management hierarchy. A hierarchy helps determine the roles, positions, power, and responsibilities of all team members.

   The management structure also depends upon the type of business ownership. Business ownership can be - a sole proprietorship, partnership, or simply an LLC.

   Following is a sample management structure of an organization.

   

   Now that we understand what details we need to document in the business management plan, let’s look at a few examples of the management plan.

Example Of A Management Section Plan

[MANAGEMENT SECTION OF A HOTEL]

[MANAGEMENT TEAM]

• Internal Team Members

  #1

  Name: Charles Fargo

  Role: Owner

  Responsibility: Formulating key strategies, defining budgets, and building a business plan

  Experience: 35 years of owning multiple hotels in Las Vegas

  Educational Background: B.Sc in Hospitality Management from South Dakota State University.

   

  #2

  Name: Michael Clark

  Role: General Manager

  Responsibility: Overall hotel operations - guest interactions, revenue management, brand ambassador of the hotel, customer satisfaction, and experience, leadership to all departments

  Experience: 25 years working with several technology hotels as the general manager.

  Educational Background: MBA from Wharton School

   

  #3

  Name: George Trump

  Role: Department Manager

  Responsibility: Manage employees, smooth coordination amongst employees, plan daily affairs of the department, strategize, prepare reports and deal with complaints and suggestions. Lead team members to function as a team

  Experience: 15 years working as a department manager

  Educational Background: BSc in Hotel Management from Texas University

  Note: There can be multiple Department Managers depending on the nature of your business. In the case of hotels, departments can include - housekeeping, logistics, security, food, and banquets.

   

  #4

  Name: Donald Clooney

  Role: Marketing and Sales Manager

  Responsibility: Increase occupancy and generate revenue. Position the hotel as an option for leisure activities, relaxation, and holidays.

  Experience: 11 years working as the marketing and sales manager for hotels

  Educational Background: MBA in Tourism and Hospitality from Midway University

   

  #5

  Name: Oprah Williams

  Role: Human Resources Manager

  Responsibility: Recruit and train hotel staff, maintain smooth onboarding process for new recruits, train, counsel and coach staff, resolve conflicts, conduct performance reviews

  Experience: 9 years working as human resources manager for hotels

  Educational Background: MBA in Human Resources Management from California University

• External Team Members

  Advisory Board Member

  #1 Richard Branson

  Responsibility: Strategic advisory for sustainable growth and expansion

  Experience: Founder of Virgin Group

  Professional Services

  #1 Digital Marketing Agency - Neil Patel

  - Help market and sell our product using digital mediums - blog, website, YouTube, and social media.

[MANAGEMENT STRUCTURE]

There is a gap in one key position in our startup.

#1 Chief Finance Officer (CFO)

Responsibilities: Finance, Accounting, Tracking Profit and Loss and overseeing FP&A (Financial Planning and Analysis)

How To Ensure That The Management Section Of Your Business Plan Is Fool-Proof?

How To Ensure That The Management Section Of Your Business Plan Is Fool-Proof?

“In preparing for battle I have always found that plans are useless, but planning is indispensable.” ― Dwight D. Eisenhower

By building a fool-proof management plan and ensuring that all the intricate details are accounted for, we can ensure that your business has a greater chance of succeeding.

Business planning software like Upmetrics ensures that business owners, like you, get the management section planning correct in the first attempt itself.

You can also get started with a free demo today to discover how Upmetrics can help you plan your business in a breeze.

Business Plan books are the first thing to go for once you have decided on the idea you want to pursue as an entrepreneur.

Starting up as an entrepreneur is not as simple as it seems to be. To transform your idea into a business that creates value for the world is a long process.

The process is full of uncertainties, hurdles, and burnout. To make consistent efforts without giving up, you need a plan you can rely upon.

A plan that shows the path ahead and helps you in making wise decisions in your entrepreneurial journey is known as a business plan.

It also helps in removing various chaos and reminds you about the mission that you had in mind before launching your business.

Now, how would you create a business plan?

Well, you can anyhow get to know what it contains but in order to easily create a business plan that covers all aspects of your business, you must read out this books written by the experts.

In this article, we are going to discuss the 7 top business plan books written for ambitious entrepreneurs like you!

1. Art of the Start 2.0

Goodreads rating: 3.87/5

The author of this book is American millionaire Guy Kawasaki. Though his name is enough for anyone to stand up from their seats but let me tell you a few things about him.

• He worked with Apple in 1984 as a part of the marketing team for Macintosh computers.
• He is the author of 12 books including The Art of the Social Media, and Enchantment.
• He is currently working as the chief evangelist of Canva which is a graphic designing software.

Now coming to what this book holds for you, it's one of those books that focus on transforming your business idea into a full-fledged organization.

Guy Kawasaki explains why it is important to have a vision and how you, as an entrepreneur, can feed your team with the same vision.

If your team does not adhere to the same vision, there will always be chaos in the workspace.

You must also share stories about your product and your journey. Everyone loves stories. You don’t have to write a 300-page book but a few social media posts, and videos that resonate well with your target audience.

The book also guides entrepreneurs while hiring. It tells you to hire people who are new in the industry. They are most likely to innovate new products as they consistently ask questions.

This book will help you in writing a business plan along with guiding you in various steps of entrepreneurship. This book holds something for every aspect of entrepreneurship.

It also stresses how you can use the internet and cloud tools to make the processes more accessible and more efficient. In the modern era, businesses are equipped with tools that are affordable and accessible to everyone.

Moreover, the book also throws light on socializing and partnering with the right people for leadership roles or to get funding.

By reading this book, you will feel more powerful as an entrepreneur and will be ready to take on challenges that come along with entrepreneurship.

This book doesn’t sound like rhetoric and probably that’s why this book received appreciation from all across the world.

A reader's review:

2. The Successful Business Plan: Secrets and Strategies

Goodreads rating: 3.87/5

The author of the book is Rhonda Abrams who has written more than 12 books on entrepreneurship. Being an entrepreneur herself, the knowledge she shares is absolute gold and trustworthy.

She also writes one of the most popular columns in the US known as Small Business Strategies.

Let us now discuss what Rhonda Abrams has taught in her book.

The Successful Business Plan: Secrets and Strategies is a complete guide for anyone stuck in writing. It is one of those books that give you a push to start working on your idea.

This book contains various worksheets and charts which makes it consumable as well as practical.

You will get enough examples about various parts of a business plan which gives you an in-depth idea of what it looks like and how it is written.

This book not only teaches you to write a business plan that reminds you about your vision but also this plan can help you get investors on board.

It also equips you with strategies to get funds at the best possible rates and also to minimize the costs involved in running a business.

It gives you an in-depth understanding of positioning your brand in the market to gain the attention of your target audience and thus deriving maximum profit.

Moreover, you can also use it for competitions related to showcasing plans for their businesses. The book is used by many entrepreneurs and is recommended to every small business.

A reader's review:

3. The Founder’s Dilemma

Goodreads rating: 4.01/5

The book, the founder’s dilemma, is one of the best business plan books by Noam Wasserman. Apart from this, he has written another bestseller known as Life is a startup.

Noam Wasserman served as a professor at Harvard Business school for 13 years and is currently working at the University of Southern California as a founding Director at the Founder Central Initiative.

The book he wrote is an absolute beauty. Not because he has told some hidden secrets but he has addressed a problem that many entrepreneurs often ignore.

And that problem is the company's leadership. You might have a billion-dollar business idea and even have cracked the tech for it, but you might still fail because of listening to the wrong advice.

If you want your business to not suffer due to wrong decisions made by the top leadership, you must read this book.

This book will help you in deciding whom you want to work with, and how to share the equity among co-founders and employees without being emotional.

However, this book might not be useful for small businesses but is a gem for someone planning to launch a high-growth business.

A reader's review:

4. The One Page Business Plan for the Creative Entrepreneur

Goodreads rating: 3.86/5

The author of this mind-blowing book is none other than Jim Horan.

Known for his expertise in solving complex business problems, Jim has helped many entrepreneurs in turning their businesses into profit-making machines.

Jim Horan has also been a Fortune 500 executive and has written six books in the One Page Business Plan for Creative Entrepreneur series.

This book is quite different from other books as it is written for entrepreneurs who do not understand a lot about business figures but want to get started soon.

There’s a saying that if you cannot write your business plan on a single page, you are probably doing it wrong.

The book enables you to write it in a couple of hours that includes your mission, objectives, and plans.

It will be crisp and easy to understand for your investors as well as the team. In this fast-moving world, it becomes really uncomfortable to give a week in preparing a business plan.

You have the idea and with the help of this book, you can turn the idea into a business in no time.

Having said that, this book is not recommended to someone who is building a high-growth company or a business with many manufacturing units.

This book is specially designed for small businesses to increase their profits and improve their vision.

A reader's review:

5. The Secrets to Writing a Successful Business Plan

Goodreads rating: 3.70/5

The author of this book Hal Shelton is an extremely experienced executive who has worked with many corporations, non-profits, and investment companies.

Hal Shelton completed his BS from Carnegie Mellon University and then pursued MBA from the University of Chicago.

The secrets to writing a successful Business Plan focus on each section of the plan to help you create it that stands out in front of the investors.

The book also informs you about the common errors entrepreneurs make while writing. These errors sometimes cost very high as they might create confusion for investors as well as for the team.

You will also learn to do the market analysis and write the same in your plan. You will be able to answer questions like how big is the market and whether it is sufficient to run a successful business or not.

Investors receive a lot of business plans and going through each one of them is not feasible. Therefore writing an executive summary becomes extremely important.

The executive summary is an easy way to grab investors’ attention and help them understand your business without going through lengthy documents.

If you are launching a non-profit organization, this book can help you in many ways as a section of the book is dedicated to non-profits.

Moreover, the book also consists of secret strategies for writing a business plan and getting bank loans or funding from investors.

A reader's review:

6. Anatomy of a Business Plan

Goodreads rating: 3.91/5

The author of this book, Linda Pinson, has worked very closely with the U.S. small business administration to write the government business plan publication.

She has also been honored as Education Advocate of the year and SBA regional women in Business advocate of the year.

Apart from this book, she has written many books on entrepreneurship such as Keeping the books and steps to start a small business startup.

This is one of the best business books for people who do not know anything about business plans.

This book provides you with an in-depth understanding of different business plans and will enable you to choose your ideal kind.

After reading the book, you will learn to update your plan according to the needs of your business and the position of your brand in the market.

The author also highlights the importance of mentioning the table of contents and executive summary in navigating smoothly through the book.

Apart from this, it also throws light on how you can efficiently market your business. You will also learn how to mention the financials of your company which is an important thing to do.

The Anatomy of a Business Plan also contains five real-life business plans which give you an understanding of how successful businesses can be explained in a few pages.

You also get a few worksheets which makes the overall experience of reading the book delightful.

A reader's review:

7. The Complete Book of Business Plans

Goodreads rating: 3.47/5

The authors of this book are Brian Hazelgran and Joseph A. Covello. Both of them have a great understanding of how businesses operate and in this book, the authors have told us that one size doesn’t fit all.

That means business plans for different businesses cannot be written in the same way.

This book contains 12+ plans that give you an idea of how you write one for yourself.

This book also focuses on how you should bring people into your business and what vision you should have to run the business for decades.

Moreover, when you will read the book you will have to ask a lot of questions to yourself. The book will compel you to ask questions yourself that are immensely important before writing it.

Once you give satisfactory answers to the questions asked, you will feel more motivated to start a business, and writing a business will look like a cakewalk.

The above quote shows how important it is to plan your business and create a visionary plan for your business.

A reader's review:

Bottom Line

All the Business plan books that we discussed above are going to help you in some way or the other.

But don’t worry you don’t need to read all of them. Just figure out where you stand and where you would want to go and select a book accordingly.

Innovative tools present in the industry like Upmetrics have helped many entrepreneurs in business and financial planning. If you need more help writing a perfect business plan, check out Upmetrics NOW and grow 2X faster.

According to the U.S Bureau of Labor Statistics, approximately 20% of small businesses fail in their first year, and only 25% of new companies make it to 15 years or more.

Of the 100 businesses that set up shop today, only 25 would survive after 15 years. That's a whopping 75% failure rate for small businesses in the United States.

As a small business owner, you should understand the reasons why small businesses fail. Learning from other business owners' mistakes will help you save time, energy, and resources.

This guide will help you understand the reasons- why small businesses fail.

Sounds good?

Here's a sneak peek into what you'll learn:

1. Starting For The Wrong Reasons

The simplest definition of Business = Problem-Solving.

But unfortunately, social media has portrayed becoming an entrepreneur as fancy and astonishing. (Read: Elon Musk). Employees were working at 9-5 jobs; dream of quitting their jobs and starting their own businesses. Nothing wrong with it. But starting a business just because you are bored of your job is not advisable.

Running a business involves approaching prospects, marketing, product/service fulfillment, customer success, and customer service. One has also to ensure that your team is functioning effectively.

In a nutshell, every day is all about problem-solving and making sure that solutions are executed for maximum output. By ensuring this, earning money becomes a by-product. So, if you are not passionate about solving problems on a day-to-day basis, it is likely that your business will fail.

2. The Market Does Not Exist

Okay, so you are clear about what problem you are solving. Congratulations! You have cleared the first hurdle. Here comes the next part - ensuring that there exists an identifiable group of people facing that problem

For example - During the COVID-19 pandemic, people around the globe required face masks. So, mask manufacturers sprung up in quick numbers to fulfill that need. Similarly, your solution should solve a 'real-life need.'

Also, your solution (product/service) should be easy to deliver to groups of people needing that solution.

Alex Hormozi, in his book - "$100M Offers" suggests finding a market to cater to while keeping the following factors in mind:

1. Your customer should be easy to reach and target
2. Your customers are willing to spend money to solve their problem
3. The number of customers and problems they are facing is growing
4. Customers are experiencing problems with the current solution

It, therefore, becomes essential that, ideally, you are a part of the group of people you are solving problems for. Since this helps you better understand their pain, problems, desire, and worries and build solutions for them.

3. Inefficient Planning

"If you fail to plan, you are planning to fail" - Benjamin Franklin

A successful business doesn't happen by accident. It requires intricate planning and impeccable execution. It requires well-thought-out action steps that must be executed on a day-to-day basis - consistently. Yes, you may require to iterate occasionally, but you need to plan well to achieve your target.

Before you begin planning, a lot of variables need to be considered.

It includes:

• Your business vision and objectives
• Your revenue model
• Market analysis and competitor analysis
• Potential problems and solutions
• Financial - capital investment, balance sheet, financial forecast, and budgeting
• Marketing and advertising, etc

You could also refer to this comprehensive article by our team to learn how to write a business plan. Additionally, you could use the free business plan templates included in the article to get started with your plan.

"One of the most important sections of a business plan is financial planning. Upmetrics made it easy for me to put up my finance, funding, and other financial-related things into the business plan."

Aizat Hawari, Ph.D. Founder at Praxis Sdn. Bhd.

4. Capital Mismanagement

Rich Dad Poor Dad, best-selling author - Robert Kiyosaki; In his book; explains the importance of cash flow. Cash flow is the amount of money entering and leaving your business over a given period.

It is vital since it helps your current expenditures and plans for the future.

A small business should, therefore, always be a positive cash flow.

It helps the business function smoothly since all expenditures are taken care of. Expenses include real estate rent, salaries, and production costs.

It should be understood that businesses with positive cash flow can spend more to improve their product and market themselves better. The business should price its product/service by keeping its expenses in mind. Pricing should be kept in mind expenses, time, and resources.

The best way forward for small businesses is to track their daily Profit and Loss. As a business owner, this will inform you about your daily cash flow.

5. Taking Decisions Based On 'gut' Feeling

Do you know what successful businesses like Amazon, Walmart, and Ikea have in common?

Think about it.

Okay, try one more time...

The answer is- objective, data-driven decision-making.

As entrepreneurs and business owners, our solution is the best. We live too much 'in our head.' But the reality is different from what we 'perceive.' According to some studies, more than half of Americans rely on their "gut" to decide.

The companies mentioned above focus on making objective decisions based on data. They study their analytics and collect data to make accurate decisions. It also helps them decide on a future course of action while keeping in mind past mistakes.

According to an article published in Harvard Business Review - collecting and analyzing data gives a competitive advantage to your business. It helps to offer better solutions that, in return, attract more customers and eventually marginalize your competitors.

6. Inability To Market selves

Imagine you researched your target customers, built a solution to solve your customer's pain point, crafted a thorough business plan, learned how to manage business cash flow, and have been tracking your data to the T.

But, your business is not growing. There is revenue coming in, but not in the volumes you want.

If you can relate to this situation, it probably means your business needs Marketing.

Marketing means promoting and selling products or services to solve your customer's problems. It is one of the most common reasons why businesses fail.

Companies like - Apple, Nike, Mcdonald's, and Mercedes are legends in their market because of their marketing.

After the COVID-19 pandemic, small businesses have realized the importance of marketing, especially digital marketing. Small businesses had pivoted to a digital-first approach to keep themselves afloat during the pandemic.

This step-by-step guide written by the Upmetrics team can help you strategically plan your marketing efforts.

7. Failure To Know Your Customer's Feedback:

Collecting and analyzing feedback helps small businesses understand if their product/service is helping solve their customer's problems.

Collecting feedback and iterating on your business's offer helps build competitive differentiation. It enables you to stand out easily in a saturated market and show that you genuinely care about your customers.

Some critical feedback sources are

1. Your database. Call and talk to your customers. Get feedback and iterate. This is why it is essential to collect and analyze your data.
2. Google reviews
3. Social media reviews
4. Online review communities like - Trustpilot
5. Local business information aggregators like - Yelp and TripAdvisor.

8. Unsustainable Expansion

Small businesses often commit the blunder of rapid expansion once they show signs of growth. Instead of investing in improving their present offer, businesses often expand their product line or start developing their stores.

Theoretically, more stores and products/services should lead to more sales. But it is farther from the truth.

Not only does it lead to a drain of finances, but it also dilutes the customer's experience. Small businesses should stick to their business plan and avoid unnecessary expenditures.

9. Fear Of Selling

"The lifeblood of any business is sales and cash flow" - Brain Tracy

Your business will not generate revenue if you cannot sell your products or services. You must learn how to persuade your customers about how your product/ service can help solve their problems.

One of the most common reasons businesses cannot sell their products/services is because they never really understand their customers. (Explained in detail in #2).

Your offering should match your customer's requirements. If it does, it becomes easier to sell. It is, therefore, essential to collect and analyze customer feedback regularly. (Point #7)

10. Failure To Pivot

The COVID-19 pandemic forced small and medium business owners to adapt or close doors. According to a study by Yelp, approximately 70,000 mom-and-pop stores were shut down permanently in the United States between March 2020 and August 2020.

Many of these stores who took managed their finances wisely could switch their operations online.

Small business owners must manage their cash flow wisely and save for such difficult times. They should be ready to pivot to a sustainable business to manage their operations.

11. Lack Of Investment In Team-Building

Often, small owners hire the cheapest or most readily available talent to run their operations. But that is not the wisest decision. Mismatch in skills and experience can reduce your productivity and efficiency.

Choose employees based on the results and experience they can bring to your business, not because they are your friends or demand a cheaper salary.

How Can You, as a Small Business Owner, Ensure That Your Business Succeeds?

Mark Zuckerberg, founder of Meta (Facebook) once quoted - "In a world that's changing really quickly, the only strategy that is guaranteed to fail is not taking risks."

While Mark highlighted the importance of taking risks and moving out of your comfort zone to take action, it is equally important that you pay attention to how meticulously and strategically you plan operations.

"If I had an hour to chop down a tree, I would spend the first 45 minutes sharpening my axe" - Abraham Lincoln

Tools like Upmetrics can help plan your business 2x faster. Not only does it help you build a plan and create strategies, view forecasts, and collaborate.

You can also start with a free demo to discover how Upemtrics can help you achieve this.

You are the proud founder of a successful small business. But you don't intend to stay and foresee your business as "small" in the long run, right?

So what are some of the most successful strategies and ways that your business can follow, so you can upscale and grow your business.

According to Entrepreneur, business growth strategist Roland Frasier, who builds and scales seven, eight, and nine-figure businesses, says there are only a few hand-picked fundamental methods that will significantly impact your bottom line and are essential to growing your business.

1. Signs That It's Time To Grow Your Business

2. How to Expand Your Business

3. Strategies To Grow Your Business

4. Avoid When Expanding Your Business

Signs That It's Time To Grow Your Business

So, how do you know at what stage of your business life cycle you need to grow and expand your business now?

Using the example of American Apparel. They opened roughly 300 locations within the first six years of business. They declared and filed for bankruptcy and closed all of their brick-and-mortar outlets, opting to fully become an online business.

What is the lesson learned from this example? Make sure that you know it's the perfect moment to grow your business before you put too much time, energy, or other resources into it.

Below are a few pointers to take note of that are merely signs indicating that it might be the right time to start thinking about how to expand your business.

How to Expand Your Business

• If your market or sector is expanding, it may be time to grow your business as well
• Ensure that you are strong in your cash flow and financially stable to be able to support the business expansion and the costs that it brings
• Your customers want more from you. Listen to their feedback to expand your product ranges or services.

Once you have identified the signs to grow, it's time to get into action and implement.

Listed below are 12 pointers that you can use for your business as an aid:

1. Connections and Networking

   

   Networking is a great approach that allows business owners to meet people who may assist them in their business's growth. This will enable you to meet potential customers, the potential talent you can hire, and investors.

   Use social media sites and apps like LinkedIn, Twitter, and online networking communities to expand your business network.

   Attending business meetings, conferences, and tradeshows is an excellent method to strengthen bonds with colleagues, network, and meet new people.

   For a good reason, website blogs are quite renowned. If you publish a personal blog on your corporate website, customers and prospects will learn more about you, your business philosophy, and your organization, products, and services. Blogs also allow for discussion and participation.

2. Provide Customer Loyalty Programs

   Loyalty programs are an excellent method to boost sales. The cost of getting new customers is likely three times more than selling your products and services to your existing customer base.

   A customer loyalty program will help in client retention. It will also guide you in the process of attracting new customers. Build a compelling loyalty program, make it available to your current consumers, and watch your sales soar.

   This may include offering discounts after a point system accumulation, rewards and vouchers for your existing customers, and so on.

   You can find a brief guide on how to understand your customer better.

3. Have Great Customer Service

   

   Let your consumers know how much you cherish them. If they have issues, make sure you address them as soon as possible. Take the time to answer their inquiries if they have any.

   If they raise specific difficulties, they should not feel as if things are tough for them. Listening to your clients on social media is a terrific approach to understanding them.

   Using a customer relationship management (CRM)system is one of them. CRM software aids in the management of client connections, both current and potential. They assist in the direction of client information, as well as the discovery of potential sales opportunities.

   One of the most important benefits of using this is that the data is stored in one place. This way, it is available to you and the relevant departments that may need to use it.

   If satisfied with your customer service, they may even suggest your company to others.

4. Emphasize Social Media Marketing

   Social media is, without a doubt, a tremendously strong instrument. It can reach hundreds of thousands of people all at once. Ascertain that your company is active on social media.

   This allows you to keep current. Listening to individuals and reading their feedback will help you figure out how to make them happier.

   → Download Now: Marketing Plan Template

   You'll also be able to comprehend their actions and discover a solution to accommodate their requests. Advertise your business with Facebook and Instagram Ads - their powerful algorithms will ensure the intended target audience sees your ads.

   As a small business, you may not have a high budget for marketing. This might be a great chance to explore some freelancer digital marketers who are excellent at Facebook Ads and content creation.

   Engage with your online community via interactive posts requiring their feedback, giveaways, and short videos and reels to retain their attention span at the same time.

5. Conduct Market Research

   It would be best to investigate the competition before thinking about how to grow your business further. Market research is something that should never be overlooked.

   Because successful business owners perform ongoing market research to understand their target market, uncover consumer concerns and potentially new demographics and discover realistic competition, many businesses enjoy longevity and expansion.

   → Download Now: Market Analysis Kit

   This will allow you to find any room for improvement in your existing products and services as well as to be able to find any gaps in the market and be able to target those efficiently.

6. Diversify Your Product/Service Portfolio

   Another area to grow your business can be expanding your portfolio of products and services. When you consider expanding your offerings, you may ask yourself the following key points:

   • What are some new features that you can add to your existing products? Or what are some new products altogether that you can introduce.
   • You must be mentally prepared to grow your business. This includes all your pre-requisites to be met and fresh opportunities explored.
   • What else can you offer your customers? Where else in the exchange can you add value?
   → Download Now: Product/Service Description Worksheet

   This may include introducing fresh and new products or adding complementary products or bundles that match your existing products so they are bought together. Become the all-under-one-roof for your market, so they do not need to purchase from your competitors.

7. Hire The Right Talent

   

   As your question hovers on how to expand your business, hiring the proper individuals today can lower the number of employees you'll need to hire tomorrow. Candidates enthusiastic about and invested in your company will be willing to expand their responsibilities as your company grows.

   Employees capable of taking ownership of their job and their position within your company will not only help your firm expand but will also work to stabilize and improve it at all stages of development.

   Make sure you hire the applicants with the right skill set: meeting deadlines, how fast they can deliver the task, accountability, responsibility, etc.

8. Create A Funnel of Sales

   What is a sales funnel, and how will that help you grow your business?

   Let's use the concept of a funnel to walk through a customer's journey. The customer is at the top of the funnel when they consider purchasing from you. They are said to complete the funnel for your product or service when the purchase is complete.

   This helps you think of new ways to get your customer to walk down the funnel so you can complete your sale. This can be achieved through giving them vouchers and discounts, obtaining their contact information to follow up after the sales, informing them about new product launches, and providing exclusive content.

9. Explore New Opportunities

   

   Analyze new business opportunities by better understanding your population. This can include everything from distribution routes to direct competitors as well as an examination of overseas markets (discussed in the next point) and other possible industries, which should be understood.

   With the right amount of research, you might probably find dozens of fresh and new options to explore right now.

10. Open to Franchising Opportunities

    When expanding your business, a huge leap can be considered to extend to new ways of getting your products and services out to the customers. With the increase in awareness of e-commerce these days, this may not be a challenge.

    There's no denying that franchising allows you to grow your business and customer base on a much larger scale.

    Although franchise expenditures are substantial, and transitioning to a franchise model is complicated and requires a lot of marketing know-how, it could be the difference between success and failure if you're searching for rapid development.

    To ensure your franchise is successful, ensure your brand is widely recognized across many geographic ranges. You also need to ensure that your business model is easy to duplicate and run.

    To operate as a franchise, you must license your business model and processes, including your branding (logos, colors, packaging, etc.), to the franchisees.

    The franchisees will then sell your products under your brand and business name. This model will allow you to expand to multiple locations, get more recognition for your brand name, and generate new revenue sources.

11. Consider Partnerships and Alliances

    

    Creating a strategic alliance with another company can help you access a larger consumer base or match your growth with your business plan's strategic goals.

    You may even develop a strategic alliance with a vendor to aid in the expansion of your company. It's critical to manage business partnerships and maintain good vendor relationships, regardless of the type of collaboration you make.

    → Download Now: Small Business Partnership Contract Template

    Acquiring other businesses could be a straightforward way to grow your business. If you can find them, you might be able to use competitors or companies from different industries as platforms to scale swiftly.

    However, this option is only viable if you have the cash flow that supports this acquisition. Look both within and outside your industry to determine if there are any prospective opportunities, whether a merger or a buy.

12. Keep Your Costs Under Control

    As you work on strategies that will help you grow your business, you might want to pay extra attention to your cost centers. Carefully lowering your costs can give your business the additional flow of cash that it needs. From the many options, two approaches can be used:

    Discontinue your low-earning products and low-performing services

    Use better inventory management systems and improve your inventory turnover

    Ensure you are not cutting costs at the expense of customer satisfaction and service. Your major growth drivers are happy customers. If you cut costs that reduce the experience they get, it might do more harm to your business than good.

Avoid When Expanding Your Business

While you, as a business owner, can get carried away amid following strategies that will expand and grow your business, at the same time, it is important to look at the DON'Ts of business growth. Below listed are some of the key areas and mistakes that business owners often tend to overlook while expanding their businesses:

• Don't Rush The Hiring Process: You will most likely need to hire more personnel as your company grows. However, you should not accelerate the hiring process to have positions filled. You risk employing the wrong people if you speed up the hiring process.
• Don't Neglect Customer Feedback: Please make sure you know who your consumers are and what they require. Make no intentions to grow depending on your tastes. Carry out a lot of market research and find out what your customers desire or would like to improve in your existing product/service.
• Don't Underestimate the Cost of Expansion: It's usual for small firms to underestimate the expense of expansion. Make sure you consider all your cost areas, such as renting space, recruiting personnel, marketing, and other expenses, and how you'll pay for them.

On A Final Note

You'll know which of your strategies worked best. Please make a note of these strategies and apply them again. To help your firm move forward, you must eliminate failing tactics. The goal is to stay relevant. Refine the strategy and place a greater emphasis on those that provide positive outcomes.

Starting a small business demands changing many hats and donning roles you'd never thought even existed! While registering your business initially seems daunting, understanding and gathering documents for the different business licenses and permits can feel further intimidating.

If the thought of navigating through business licenses and permits overwhelms you, thankfully, you need not worry much. As long as you are organized and well-researched, you should get your licenses and permits timely!

Most new small business owners often wonder if they at all need a business permit. For example, if you plan to sell handmade crafts at a local gig, you probably don't need a license.

However, if you plan to start a dental health clinic or a restaurant, you will need both permits and licenses. In other words, the exact nature of your business qualifies the kind of permits and licenses you may need to acquire.

In this article, we take a detailed look at what business licenses and permits. With this information, you can decide if you should go ahead and make an application for one.

1. What are Business Licenses and Permits?

2. Business Licenses and Permits Vs Business Registration

3. Types of Business Licenses and Permits

4. Cost of a Business License

5. Where To Get a Business License?

6. Steps To Getting A Business License

How are Business Licenses and Permits Different from Business Registration?

A business license or a permit allows an existing business to carry out its stated business activities. However, licenses and permits themselves do not bring a business into existence. If you have a business idea, you will first need to make sure that you register a company.

If you want to start a business of your own in the US, you can register it as one of the three common business structures including

• Sole Proprietorship: This entity is for situations where you are your business's sole owner, and no one else is involved in its operations. As only you are responsible for every aspect of the business, any legal problems arising from it will be completed on you.
• Limited Liability Corporation (LLC): An LLC offers you personal protection from various kinds of business liabilities. Your assets will not be affected should any legal problems arise. However, LLCs require a lot of paperwork, and registering one may be time-consuming.
• Limited Liability Partnership (LLP): An LLP is similar to LLC, but in the US, they are often used by professionally licensed individuals such as doctors, architects, and lawyers.

Consulting a tax professional is the first step to deciding which business structure fits your business idea the best. Once your business is registered, you will then need the relevant permits and licenses to carry out your business activities.

Types of Business Licenses and Permits

If you are a business owner or planning to become one, you will need a combination of business permits and licenses. Both permits and licenses are handed out by federal and state agencies, depending on their jurisdiction.

Whether you need a federal permit, license, or something handed out by state agencies, the answer depends on your business activity and location.

1. Federal Licenses and Permits

   Federal Agencies such as the Alcohol and Tobacco Tax and Trade Bureau and the US Department of Agriculture may hand out licenses and permits if any federal agency regulates your business activities.

   For a complete list of agencies that provide licenses and permits for these business activities, visit the US Small Business Administration page dedicated to applying for licenses and permits. To ensure that you do not violate any rules and regulations, you may take a good look at the list below.

   • Agriculture: You will need an agriculture license if you handle animals, animal-derived products, plants, biotechnology, or biologics across US states.
   • Alcohol: If you sell, serve, import, or manufacture alcoholic beverages, you will need an alcoholic license.
   • Aviation: Licenses for businesses that deal with aircraft, transporting people and goods via air, and for entities that engage in aircraft maintenance.
   • Commercial fisheries: If you plan to engage in commercial fishing in the deep sea, you will need this license.
   • Firearms: This includes licenses for dealing and selling firearms, explosives, and ammunition.
   • Fish and Wildlife: Permit and licenses for wildlife or fisheries-related activity.
   • Maritime transportation: Permits for providing cargo and passenger transportation via the sea.
   • Mining and drilling: Licenses for mining for oil, natural gas, mineral resources, etc.
   • Nuclear energy: Any sort of nuclear activity, whether fuel production or disposal of nuclear waste, will require licenses.
   • Transportation and logistics: This license is necessary if your business handles large vehicles.
   • Radio and TV broadcasting: Permits and licenses for mass communication-related activities that involve radio, TV, satellite, cable, etc.

2. State Licenses and Permits

   State licenses and permits are handed out by non-Federal entities such as state authorities, city or county municipalities, and various other state government agencies.

   

   These licenses and permits are given to business owners who intend to operate in certain business activities. States often control a more significant number of business activities than the federal government.

   Some examples include:

   • Auctions
   • Construction
   • Dry cleaning
   • Farming
   • Foodservice
   • Retail sales
   • Hospitality (hotels, motels, etc.)
   • Vending machines

   While some licenses expire after a certain period, it is quite easy to renew them if you timely realize that the expiration date is approaching. As the US consists of 50 states and several territories, it is essential to research the kind of business permits and licenses you will need. An excellent place to start is your own state's official website.

3. Local Licenses

   Most county and municipality-level permits and licenses come under state jurisdiction. Nevertheless, there are times when your business activities may come under specific laws.

   As a result, you will probably need to visit your county and city offices, including the county clerk's and state tax offices. This information may not always be available online, and you may physically have to visit the offices concerned.

4. Professional Licenses

   Alongside business licenses and permits, your profession may require an additional license to practice. These licenses are often handed down by specific professional bodies such as state-specific mental health boards, certified public accountant (CPA) licenses, the license to practice as an attorney, etc.

   Doing ample research before calling yourself a professional and starting a business is important. The penalties can be rather harsh if you practice a regulated profession without a valid license.

   Here are some examples:

   • Accounting: The National Association of State Boards of Accountancy hands out licenses for accounting firms.
   • Architecture: National Council of Architectural Registration Boards gives away permits for practicing architects.
   • Cosmetology and Hairstyling: National Interstate Council of State Boards of Cosmetology is responsible for the licensure of hairstylists and cosmetologists.
   • Dental Care and Medical Services: American Dental Hygienists Association licenses dental hygienists, whereas the American Dental Association gives away licenses to dentists.
   • Engineering: National Council of Examiners for Engineering and Land Surveying hands out licenses to land surveyors and engineers.
   • Law: The American Bar Association is responsible for licensing attorneys.
   • Pharmaceuticals: Sellers and makers of pharmaceutical products should apply for licenses at the National Association of Boards of Pharmacy.

5. Additional licenses and permits

   There can be several non-professional licenses as well. These may be related to health, building, zoning, and the environment. For example, if you start a business next to a protected park, you may have to get additional clearance that your business activities will not cause ecological damage.

   We know it can get mighty complex and cumbersome, but thorough research will save guard you from unforeseen penalties later.

6. Permits and Licenses for Home-Based Businesses

   Working from home can seem easiest and hassle-free until you realize you may need additional permits. If you plan to work from home or start an office in your house, you may need the following licenses and permits:

   • Home occupation permit
   • Zoning permit
   • Fire permit
   • Sign permit
   • Special use permit

What is the Cost of a Business License?

The cost can vary from just $50 to several hundred dollars, depending on whether it is a federal license or a state permit. It also depends on the industry in which your business operates. Some states like Nevada have general business license requirements. That may cost about $500.

Hence, the short answer is that it depends on what permit or license you need, and where you will use it.

Where To Get a Business License?

As mentioned before, you need to visit the US Small Business Administration page to check if you need a federal license or permit. If you don't, you may contact your state government's website or offline offices to apply for the necessary licenses.

How Long Does It Take To Acquire A Business License?

Unfortunately, there are no clear answers to this question. It truly depends on how complex your business activity is and where you are making the application.

Some states process licenses and permits quickly, and you may get your documents in days. However, if you operate in a high-risk area such as nuclear technology, the federal government may take weeks to months to give you the licenses and permits you’re applying for.

Should You Get Your Licenses Before Registering Your Business?

You could, in theory. However, it makes more sense to start a business and then make an application for licenses and permits around the same time.

Will I Need Permits And Licenses If I Want To Expand My Business Abroad?

Most definitely. You will need not only American licenses and permits but also the licenses and permits valid in the countries where you plan to engage in business activities.

What Are The Steps To Getting A Business License?

1. Make a list of licenses you need

   This is one of the most complex steps. You need to assess your business activities and the location where you plan to operate. Conduct research or seek external help. Make connections and telephone calls if the information is not available online. Finally, make a list of the licenses and permits you need.

2. Gather all the necessary documents

   Every permit and license requires a little paperwork. This means documentation, evidence, and more paperwork. As a result, getting your hands dirty and keeping all the documents necessary in designated files and folders is essential. Keep digital copies of all your records too if needed.

3. Apply for all the licenses

   Start making applications for your licenses one by one. The first step should be to register your business. However, if you are a professional, you may need to have a professional license even before you think of starting a business. Nevertheless, start applying for those permits and licenses.

4. Put your licenses to use

   Getting a license is not enough to get business traction. Use your licenses to market yourself. Proudly state that you are a licensed business owner with all the permits necessary. This gives customers and clients the confidence they want to do business with you.

5. Renew your licenses on time

   Business owners often overlook license expiry dates and hence forget to renew their licenses and end up paying penalties. Late renewals may cost more, and you may also have to make fresh applications. To avoid these cumbersome scenarios, it’s best to set reminders and renew your licenses before they expire.

Act Quickly And Get Your Licenses And Permits

If you are a small business owner or are planning to be one soon, you probably are one of the most brilliant individuals to walk this planet. Running a business can be an incredibly satisfactory and enriching experience. Besides, it helps you generate revenue for yourself and income sources for your staff and their families. In short, running a business is a highly fulfilling experience.

However, for this experience to remain fulfilling and satisfactory, and to operate peacefully, you must gather all the required business permits and licenses. You will also need to renew them before they expire. Make sure to get your documents in order and gather all the permits and licenses required to be a successful business owner.

If you ever ask your friend about his life, he would probably start ranting for hours.

It’s not because something wrong has happened with him but every one of us goes through the same situation at every point in our life.

Think of 5 years ago, didn’t you have any problems? I know they might seem ridiculous now but once they had stolen your sleep and turned your taste buds to neutral.

The point here is every one of us has problems at every point in time and we are constantly looking for someone who can guide us through it.

If you have dealt with problems on your own and you are confident enough that you can help others with the same, this article is for you.

To do it in a disciplined manner, you need to launch a life coaching business where you will be guiding people through their biggest miseries. Sounds interesting? Keep reading.

3 Things You Must Know About the Life Coaching Industry

• There are more than 71000 life coaches worldwide and the current market size of the industry stands at $3 billion dollars.
• As a beginner life coach, you can charge somewhere between $100-200 for an hour-long session.
• The cost involved in this business is quite low and that’s why a beginner life coach can easily make around $60,000 a year.

1. Brainstorm and Write a Business Plan

Before starting a life coaching business, you must figure out a business plan that can help you move forward. There are thousands of life coaches present across the world. To stand out you must include the following details in the business plan.

• Write what your company does and how it will impact the life of your clients.
• Write down the services you are going to offer as a life coach such as career counseling, relationship counseling, etc.
• Mention what goals you want to accomplish after 5 or 10 years down the line.
• Sketch your ideal customer and target market. Be clear about whom you want to work with.
• Write who your competition is and how you are going to win over them.

2. Calculate the Cost Associated

Once you are done with writing the business plan, it’s time to estimate the money you would need to start a life coaching business.

There are two different types of costs associated with starting a life coaching business. They are One-time costs and recurring costs.

One-time costs include

• Smartphone
• Desktop
• Headsets
• Website designing
• Domain name

They won’t occur again hence you can easily estimate the amount needed to avail them.

Let's also take the recurring cost into consideration. It includes

• Monthly Internet charges
• Salaries of employees and freelancers
• Renewing of business insurance
• Website hosting

Now estimate the recurring cost and add 25 percent of the total recurring cost to the overall cost.

So that’s how you can calculate the costs associated with starting a life coaching business. If you don’t have the required funds, you can check out various business loans available in the US.

3. Give Your Business a Name

This is one of the most confusing yet entertaining tasks that you would do before starting your life coaching business. Think of it as naming your newborn child. For a life coaching business names could be such as Ease your life or Peace seeker.

Take your time, read your mission statement and then come up with a name.

The name of your business should reflect what your business does and should also complement brand building in the future.

Moreover, you also have to register a domain name for your website so whatever business name you have in your mind you must check out whether a domain name for the same is available or not.

So, yeah, the naming process looks tiring but it’s going to be fun as well.

4. Register Your Business to Make It a Legal Entity

Registering your life coaching business is probably the most important task. Never try to run away with it. It will help you, in case, if your business gets sued for any reason.

Another reason why you must register your business as a legal entity is to get the Employer Identification Number (EIN). You can get the EIN from the IRS website.

EIN is majorly used to pay taxes and satisfy other business needs which will be discussed later.

You can register your life coaching business as a sole proprietorship, partnership, limited liability company (LLC), and corporation.

5. Create an Easy-to-use Website

Now we are heading towards the actual business side. There are thousands of websites present on the internet but a lot of them are only for the sake of an online presence.

You can hire a web designer or if you are low on budget, you can create a website on your own by using platforms like Wix and WordPress. It’s super easy and fun to work on these platforms.

It’s no rocket science to create a website that ranks high on google and converts visitors into paying customers. All you need is patience and consistent efforts.

You need to understand how a website works. People who need a life coach might not directly search for it on google. They would rather look for articles that address their problem and provide a solution.

So you need to create a blog page on your website and consistently publish quality blogs that your audience is looking for. You can hire a content writer and an SEO specialist who will help your site rank higher.

Now from these blogs you can direct visitors to your site and pitch them your services using videos and slides. That’s how you can create a website that will help you to grow your life coaching business.

6. Make Sure You Have All the Licenses and Certificates Required

If you have the necessary licenses and certificates, there are rare chances of your business getting into a legal battle or you paying mammoth fines to the government.

In the US, several cities might be issuing licenses for small business owners. You must confirm it at the county clerk’s office.

You must also check out the US small business association directory to get assistance from a local association.

Now let us discuss other legal formalities that you must perform in order to run your business hassle-free.

• Signing the contract

  Make sure you get the contract signed by the client before providing any services.

  The contract should contain all the terms and conditions related to the life coaching services.

  This contract will ensure that everything on which you and your client agreed upon is being followed.

  In any case, if the client doesn’t pay you or does anything which violates the terms and conditions of the contract, you will be able to take legal action against him/her.

  Also, make it clear in the contract that you are not a medical professional and will only act as a life coach in your client’s life. Here’s a coaching agreement that will help you in achieving the same.

• Issue a certificate of occupancy

  If you are running the life coaching business in an office dedicated to meeting and treating your clients, you must issue a certificate of occupancy (CO).

  The certificate of occupancy is a certificate issued by local authorities that ensures that a place is good to be occupied.

  If you have rented out the place, it’s the owner’s responsibility to have a certificate of occupancy. Please do ensure that the owner is well aware of it.

7. Open a Bank Account and Credit Card

Having a business bank account and credit card is immensely important. It helps you to track various expenses and payment details.

Many small business owners use their personal bank accounts for business purposes which is not considered a healthy practice as it makes the process of filing taxes long and hectic.

8. Make Sure You Have All the Necessary Equipment

Starting a life coaching business does not require a lot of equipment.

Some of the equipment used by life coaches:

• A hi-speed and stable internet connection
• A comfortable chair and table
• Headsets
• A smartphone
• An office area to work and conduct sessions

A high-speed internet connection is recommended as you might meet your clients through video call services such as skype and zoom.

It’s better if you have a soundproof office or you can rent out an office at a place where there is no noise and disturbances.

9. Create and Execute a Marketing Plan

In the last step of this process, we will discuss how you can market your business to attract your target audience and convert them into paying customers.

As a beginner, your first objective is to get some work and collect as many testimonials as you can. If needed, work for free for a few of your clients as it won’t cost you anything.

You can use the testimonials on your website which will compel the visitors to get on a call with you and that’s how you can start converting prospects into paying customers.

Tell everyone in your network that you are offering life coaching services. The power of word of mouth is insane!

You can also host podcasts, and create content about the same on various social media channels.

Moreover, you can create short videos and use them as ads on youtube, Instagram, Facebook, etc. wherever a huge chunk of your target audience stays!

Bottom Line

Starting a life coaching business becomes easier when you adhere to this 9-step process. Remember, starting a business has its own ups and downs that you will experience only when you will get your hands dirty!

If you want to grow your life coaching business 2X faster, check out Upmetrics where you will be enabled with tools to plan your business efficiently.

Walking down the road, have you ever stopped by to buy your favorite snack but found a queue at the store, so you just went back without buying it? Here's when a vending machine comes to your rescue. It's super convenient. And the best part? Allows you to pick up whatever you need quickly from the machine.

A vending machine is handy for everyone. Owning a vending machine business, whether it acts as your side income or your mainstream one, can make you a successful entrepreneur. Let's dive into the what's and how's of a vending machine business.

1. Right Business Structure for Small Business

2. Is Vending Machine Business Profitable?

3. Different Types of Vending Machines

4. How to Become a Vending Machine Business Entrepreneur

5. Benefits & Drawbacks of Vending Machine Business

Your Small Business Deserves a Suitable Business Structure

Choosing one of many options is challenging, whether it is a choice of food you love or the structure of your small business. Every business structure brings in its own set of responsibilities. It is all about picking the most suitable choice. 

A sole proprietorship and a partnership business let you operate on your terms, as the business registry is not mandatory. However, this makes you, as an owner, responsible for all the financial and legal obligations of the company. Therefore, if you fail to abide by any law or repay any debt, your assets might get sealed to repay those debts. 

C-corporation and LLC have quite a few formalities for registration. However, the fact that it provides a separate legal entity from the company makes it all worth it. In case of any defaults, the entrepreneur is free from any personal liability.

To make the best choice, turn to an accountant for advice on picking the business structure that suits your requirements the best.

Is a Vending Machine Business Profitable?

A big yes. What if I told you that you could earn a decent passive income with minor investment and risk? An engaged spot drives higher profits via vending machines. Profits tend to rise if your machine is stocked with location-specific products. 

Research shows that the global vending machine market is expected to be worth $146.6 billion by 2027 and that the sale of food and beverages is likely to rise by 1% and 1.7%, respectively, by 2027. So, it is the best time to dive into this business.

What Are the Different Types of Vending Machines?

Vending machines are no less than a genie that fulfills your wishes. Here are some of the most common vending machines found in the US

1. Water

   Selling essentials is one of the most profitable businesses because everyone uses them. Clean drinking water is less likely to be found in households or buildings. So, placing your vending machines in crowded areas will drive high revenue with low maintenance and investment.

2. Bread

   Bread is part and parcel of the lives of Americans. Bread vending machines call for regular refills to make sure they are fresh. Place the machine anywhere around workplaces or schools, and you are good to go. 

3. Coffee

   Americans highly prefer things that can be consumed on the go. 400 million cups of coffee are consumed daily in the US making it a super lucrative market to tap into. Placing them in high rush areas can be fruitful. Coffee machines need regular maintenance and refills but bring in high gains.

4. Snacks

   With more people joining the 'stay fit club', healthy snacks have seen a rise in demand over time. These vending machines call for a sensible investment and low maintenance cost but bring you a decent income if placed in areas like gyms and fitness clubs. Adding not-so-healthy snacks to these can make your profits multifold.

Although these are the most common vending machines, you can explore more to determine the best fit.

How to Become a Vending Machine Business Entrepreneur

Of course, you cannot know 'everything' when starting a new small business. However, it is only wise to collect as much information as possible to be on the safer side. Here we will take you through the process of launching your own vending machine business

1. Pick your product

   As thousands of products are sold via vending machines, it is tough to decide. In the beginning, food products are the most popular choice. Due to a shortage of time, Americans often prefer to grab some snacks from the vending machines on their way to their workplace.

   So, stuffing your machine with ready-to-eat snacks might be a good choice. People also tap into machines that stock bulk products like rubber balls or specialty products like beauty and tech goods.

2. Choose the right location

   The best way to choose the right location is to list all the places where you’ve used a vending machine to buy something. And then pick one of them, considering their availability and affordability.

   Securing a space that witnesses a rush can potentially be the perfect choice for you. The right product at the right location is the key. For instance, placing your coffee/snacks machine near workplaces or schools can be a success.

   In addition, to conduct a vending machine business, the relevant licenses must be mandatory. The requirement for licenses varies in different states and countries.

   You just need to head to the US Small business administration’s website and search for your state to know the permissions required to get started with your vending machine business right away. You can also call on SBA’s number to find out more about your state’s must-have licenses.

   Before installing the vending machine, sign a legal contract with the property owner, showing his approval.

3. Invest the right amount

   Here we are to help you spend wisely which drives the highest profit. Different kinds of machines cost differently-

   • Machines that sell a particular product in bulk at a price often cost less, around $70-$300.
   • Multiple product vending machines have lots of options to choose from and cost around $1000-$6000 depending upon the features you go for.
   • Electronic vending machines have new age features like touch screens and credit card payment gateway and thus cost $4000. This is the most profitable as people often carry credit cards that help them make a purchase quickly.

   It is highly recommended to buy a used vending machine which costs around $1200 to $3000. But be mindful enough to check if the machine is fully functional. As vending machines are exposed to the public 24*7 call for regular maintenance to not miss out on profits due to no operation.

4. Finance options analyzation

   With a few thousand dollars you can kick start your vending machine business. Taking up a loan for that can make the process rapid and smooth. Here are 2 options to choose from

   • Short term loans

     As vending machine businesses require small amounts, loans given for a comparatively shorter duration are the best fit. Due to the time crunch, short-term loans charge high interest. Here you need to prove your creditworthiness to the lender for them to extend a loan for your business.

     → Download Now: Startup Fundraising Checklist

   • Equipment financing

     This kind of loan helps you to finance your equipment via banks. You just need to provide your financial information with the price of the machine you plan to buy and you're good to go. It gives you the freedom to buy the inventories with the loan amount.

5. Purchase your machine and stock it up

   It's time to buy your vending machine. You can purchase your machine online and get it delivered to your location.

   Make sure to check the customer reviews before selecting the brand of your vending machine.

   If you opt for a safer route, you can go for a franchise where you get a foolproof business structure and income stream. You need to pay a fee and a certain percentage of your profit at the time of purchase.

   The third option is to acquire an existing vending machine business after exploring the owner's reason for selling. It can give you instant gratification by comparatively higher profits from the start.

   Stocking your machine with products is crucial for earning profit. Rather than going for fancy food and beverages, it's wiser to sell products that are widely used in that specific location and are budget-friendly.

   For this, you can always rely on local wholesalers to get the lowest cost for the local products. You can choose to keep it light in the starting.

   You may choose the machine that gives you real-time alerts about low stock, on your cell phone.

Benefits and Drawbacks of Vending Machine Business

Everything has its positives and negatives. So does a business. Go for the business whose negatives do not scare you but empower you to perform better.

• Benefits

  Nothing can be better than owning a business with low cost and maintenance and a high profit with minimum effort. A vending machine business gives you just that. The basic cost involved is in purchasing the machine and its repair. You just need to stock it regularly and collect the cash. That's it!

• Drawbacks

  A vending machine business often involves cash dealings making it prone to theft. Placing it in a safe area can avoid the loss of income. Additionally, this business involves regular efforts and time investment in stocking the machines, maintaining them, and collecting cash.

Wrapping Up

Being an entrepreneur might seem like a big responsibility. But with the right information, you can ace the vending machine business game. With time as you understand the market better, you will find a more favorable location and a more suitable profit-making product.

How Upmetrics can help?

It’s a fact, that getting accurate guidance can help you successfully launch your dream business. But, just collecting information from various sources will lead you nowhere. Having a business plan helps you set your vision right and invest your energy in the important areas.

So, here we have the most simple way of creating a convincing and structured business plan. With Upmetrics - business plan software, you can make a customized business plan using our business plan template carefully curated for your industry-specific needs. With suggestions at every step and customized financial plans, we’ve got you 360 degrees covered.

Starting a new business requires lots of effort, and it can be stressful, especially when you don’t have a clear picture of how much you will spend on what. Setting a limit or planning your expenses will streamline your financial management.

But, how to create a business budget before you incur them? Your small business budget is the key to estimating your expenses and considering that as a benchmark to plan further expenses for your business.

The article explains all you need to know about small business budgets, why it is essential for your business, and a six-step guide that will help you create a small business budget efficiently.

So, let’s begin with understanding the business budget.

1. What is a Business Budget?

2. Why is Small Business Budget Important?

3. Create a Powerful Budget for Small Business

4. Stay on Top of Your Business Budgeting

So, why do you need an accurate business budget? Let’s understand its importance and see why you should have a small business budget.

Why is Small Business Budget Important?

• Helps in business planning: Your business budget will help you in your business planning and streamline your business finances more effectively.
• Helps in estimating profits or losses: It will also help you understand how much revenue you will generate and how much expenditures you have to make. Based on the predictions, you will know whether you will make a profit or loss in that financial year.
• Effective decision-making: The budget will also serve your purpose of making better decisions as you will have an estimate of how much you will spend and earn, so you will be in a better place to make business decisions.
• Raise funds: A substantial business budget will also help raise funds since you must show future financial roadmaps to potential investors.

Hence, be it your business planning or raising funds, your business budget will gauge you a fair idea of the financial health of your business.

Let’s understand the comprehensive guide on creating a budget in six simple steps.

6 Steps to Create a Budgeting for Small Businesses

Although creating a small business budget is not rocket science, you must estimate your expenses carefully and predict your revenue.

The business budget becomes challenging when you prepare budget for the first time with no past figures. Below is a six-step guide that will help you prepare small business budgeting, whether you are preparing it for the first time or not.

1. Calculate and List Your Revenue

   To prepare a budget, you should start with the income side of the income statement, and you need to estimate your revenue for the next financial year. If you are selling multiple products or providing services, you need to list how much income you will generate from each product and service.

   For example, suppose you expect to sell 10,000 units of wooden chairs in a year. In that case, you can consider the total revenue of the 10,000 chairs for the next financial year as revenue before deducting any expenses from the income.

   Because if you deduct expenses from the income, it will give you profit or loss; hence, you are required to consider only total business revenue from various sources.

2. Club Your Fixed Costs Together

   Your fixed costs remain fixed no matter how much revenue you generate or how many products you sell. These expenses are predictable and include annual rental expenses, loan repayment amount, depreciation costs, insurance expenses, etc.

   To estimate your fixed costs for your business budget, you need to list all fixed costs that you will incur in the next financial year. Different businesses will have different types of fixed costs; for example, if you are in the manufacturing business, your fixed costs will include the following costs:

   • Factory rent
   • Direct wages
   • Direct material costs
   • Factory electricity
   • Depreciation of the plant and machinery
   • Factory insurance

   Thus, it would help if you considered fixed costs applicable to your business as it varies depending on your industry.

3. Add Variable Costs

   Your business will have many variable costs, which are not fixed. The variable costs are those expenses that will differ depending on how many units you produce or how your business performs.

   For example, the fuel expense of your business vehicle is a variable cost because it will vary depending upon its usage. Thus, these are the costs that change every month.

   You need to add your variable business costs to your fixed costs to estimate total expenses for your business.

   Try to lower your variable expenses to make a better net profit margin since your fixed costs can’t be changed.

4. Predict any Contingent or One-Time Expense

   Your one-time expenses may include buying an office or machinery for your business. The contingent expenses are those that you are unsure of their occurrence. These expenses may incur due to the occurrence or non-occurrence of an event.

   For example, you expected your machinery maintenance costs would be $900, but you had extremely high costs on machinery ($2000) as you faced a machinery breakdown that year.

   Now, you can not predict such expenses but must prepare certain funds to meet costs during unexceptional circumstances.

5. Create Your Profit and Loss Statement

   Once you have gathered all your business revenue, fixed costs, and variable costs, including contingent expenses, you need to prepare a profit and loss statement that will help you understand how much profit or loss you will make in the next financial year.

   You need to add all incomes and deduct all costs from your estimated income. You may have a positive or negative amount as a result. If you get a positive amount, you will make a profit per your business budget.

   And, if you get a negative amount, your budgeted revenue and costs will incur a loss for you. Moreover, you can’t stick to your budget 100%, but it will give you an idea of whether you are going in the right direction or not.

6. Prepare a Business Budget

   That’s it. Now you are ready with your business budget. You just need to prepare a budget table, as shown in the example below, and you will have your small business budget ready to help you plan your business activities more efficiently.

   • Business Budget Template

     Particulars	Amount (in USD $)
     Income:
     Sales of Product A	$6,000
     Sales of Product B	$9,500
     Other Income	$2,300
     Total Income (A)	$17,800
     Expenses:
     Fixed Costs
     Rent	$2,900
     Salaries	$2,100
     Bookkeeping	$500
     Insurance	$350
     Total Fixed Costs	$5,850
     Variable Expenses
     Marketing Expenses	$630
     Utility Expenses	$400
     Transportation Costs	$250
     Total Variable Costs	$1,280
     One-time Expenses
     Office Purchase	$5,000
     Office Furniture	$1,800
     Total One-time Costs	$6,800
     Total Expenses (B)	$13,930
     Estimated Net Income (A) - (B)	$3,870

   Thus, the template shows how much this business will make revenue from the sales of products A and B and how much fixed, variable, and one-time expenses this business will incur.

Stay on Top of Your Business Budgeting

Thus, creating a small business budget may seem stressful when you have a lot of other work to focus on. However, with the right approach, you can make your business budget efficient and make it work for your business planning and better decision-making.

Automate preparing your small business budget with Upmterics, where you will get customized business budget templates to suit your industry. The financial forecasting and business planning software can do all the business finance management for you.

Mistakes are the best teachers. Well, not really.

Although you can learn a lot by making mistakes, not everyone gets enough chances to learn everything by making mistakes.

So, what would you do in such a case? Read of course!

When you're starting a small business or startup, it's always a good choice to read up as much as you can.

But what to read, and what not to read?

You don't need to waste your precious time worrying about that!

We've compiled a list of the 12 best books for small business owners and entrepreneurs. Go ahead and find out your next reading obsession.

1. Shoe Dog by Phil Knight

Goodreads rating: 4.47/5

Ever wondered what made Nike what it is today? What was the idea behind the brand that sells a lifestyle instead of shoes?

Why not hear it from Phil Knight himself?

Shoe Dog is a memoir of how Phil Knight got a “ crazy idea” and built it from the ground up, into one of the top shoe brands in the world.

The best part about Shoe Dog is that it isn’t just a bunch of ideas thrown together, but a story of ideas, aspirations, culture, challenges, and eventually success.

The book doesn’t paint a rosy picture of startups and shows what challenges actually look like. But if you have a dream to build something new and unique, it’s all worth it in the end.

A reader's review:

2. No Rules Rules by Reed Hastings and Erin Meyers

Goodreads rating: 4.32/5

Ever wondered what is Netflix’s secret sauce to success? What has made the company a hot topic in business circles?

Well, it goes way deeper than the service, business strategies, and model. It is the company’s exceptional work culture. From unlimited leaves to no questions asked policy, several things make Netflix stand apart.

Want your employees to share your vision and dedication to your business? Maybe take a page from Reed Hastings’s book.

A reader's review:

3. The 4-Hour Work Week by Tim Ferris

Goodreads rating: 3.92

All of us want to live the ultimate life. And sure it takes work to get there. But what if someone told you that you can build your business along with living the life you want to without waiting for retirement?

Tim Ferris tells you just that. The 4-Hour Work Week is an account of Tim Ferris’s experience of how to live your dream life without waiting for it.

It is one of the top books for small business owners who want to have a good work-life balance.

4. Influence: The Psychology of Persuasion by Robert Cialdini

Goodreads rating: 4.20

Today there’s a crowd of businesses clamoring for people’s attention. What would make yours stand out?

Understanding your consumers and giving them what they want. But how would you know what they want?

This is where consumer psychology comes into play, and that is exactly what Robert Cialdini’s Influence comes into play.

It explains everything about consumer psychology in vivid detail and helps you understand what goes on through the brain of your customers.

5. Zero to One by Peter Thiel and Blake Masters

Goodreads rating: 4.18

Did you know that building something small is more significant than reaching great heights with your business?

How you might wonder.

This is what Peter Thiel explains in his book Zero to One.

It takes that one leap of faith to get started, that one leap to keep going. This is what eventually helps you achieve great things.

This book is perfect to help you understand the beauty and the benefits of starting small.

6. Outliers by Malcolm Gladwell

Goodreads rating: 4.18

Is there a huge difference between people who make it, and the ones who don’t? Is success all about luck and sheer genius?

A natural selection that favors some people over others?

Probably not. Through Outliers, Malcolm Gladwell gives solid proof of what makes great people truly great

Overall, the book helps you understand what you can do to succeed as a person.

7. Lean In by Sheryl Sandberg

Goodreads rating: 4.13

Lean In is a series of books by Sheryl Sandberg. Through different editions of Lean In, Sheryl Sandberg explains how people from women to new graduates can assert themselves in workplaces.

It focuses on the power of speaking up, taking things into your hands, and focusing on what you can achieve instead of what you can’t.

If you are a woman entrepreneur who wants to be heard or a graduate with ideas that you want to voice in the business world, then Sheryl Sandberg’s Lean In should definitely be your next read.

8. This is Marketing by Seth Godin

Goodreads rating: 3.97

Marketing is the foundation on which several businesses are based.

After all, if you want to tell people you’re selling something, how would they come up and buy it from you?

Seth Godin is one of the most influential marketers of the 21st century. Through this book, he explains how to implement his seasoned strategies in your business.

9. Nudge by Richard H. Thaler and Cass R. Sunstein

Goodreads rating: 3.83

How often do you go about life in an autopilot mode, make the obvious choices, and do tasks the way people do them without thinking about their implications?

Nudge talks about how a little change, some thought into what you do can make a big change.

And in our fast-paced lives, the brief pause and turn can change several things that letting things be would never do.

10. Thinking Fast and Slow by Daniel Kahneman

Goodreads rating: 4.17

You might have heard about the sales funnel and the different stages of a consumer's buying journey. Exactly what influences our buying decisions. What makes us take one step forward or backward with our decisions?

Thinking fast and slow gives an insight into the buying patterns of consumers and how you can turn them in your favor. This makes it one of the best books for small business owners to help them turn things in their favor.

11. Skin in the Game by Nassim Nicholas Taleb

Goodreads rating: 3.89

Anyone who has built a business would know that it takes courage above all to build one. The risk involved is what makes the effort worthwhile in the end. It is a must-read book for business owners.

The book also touches upon the fact that you have to have some amount of risks involved in the deal to take it seriously.

If you want to understand risks and what they have to offer, Skin in the Game should be your pick.

12. The Psychology of Money by Morgan Housel

Goodreads rating: 4.39

Having a strong concept of finances and money as you go about your business are your biggest assets as an entrepreneur.

Investing, personal finance, and business, Psychology of Money teach it all. Morgan Housel explains everything in a clear and non-repetitive way.

This makes the book a quick and easy read. So if you are looking for a book to help you manage your finances better, then give The Psychology of Money a try.

Conclusion

Reading as a hobby helps you learn from other people, develops your focus, and expands your knowledge as well as your pool of ideas.

This list of books for small business owners has been compiled to cover all aspects of running a business.

One thing you should keep in mind though is that reading something would only be useful if you analyze and apply the same in your life.

So, what are you waiting for! Pick a book, learn from it, and apply it in your business whenever you can.

Brilliant business ideas deserve 2 things for sure - Feedback and Funding.

And if you think you have a good business idea and have some bit of groundwork figured out, you might want to look into business plan competitions.

Now, what is a business plan competition? Why should you participate in one? How to find one that’s just right for your business?

We’ll discuss all of the above and more through this article.

How to Find a Business Plan Competition?

There are several business plan competitions listed on Google which you can look through. Different competitions have different eligibility criteria and guidelines. Go through all of that to know if it fits your business or not.

At the same time, it is important to check the credibility and check for any scams or illegitimate sites.

To make finding business plan competitions a little easier we have compiled a list of 20 popular and credible competitions that you can apply for.

1. Global Student Entrepreneur Awards

   To encourage students across the globe to become entrepreneurs GSEA organizes this competition for students from all disciplines and countries. The main aim of the awards is to draw people towards entrepreneurship, shape their ideas, and become a catalyst for their business’s growth.

   • Eligibility

     The student must be enrolled in a part-time or full-time undergraduate or graduate course.

     The student should be an owner or founder or co-founder of the startup.

     Only one person from the startup can represent it.

     The person should either be 30 or under 30 years of age.

     The startup should be running for at least 6 months on the date of application.

     The startup should either generate $500 or get $1000 as investments at the time of application.

     The startup shouldn’t have reached the final round of the competition in the previous years.

     For more details check out their website.

   • Location

     The competition is held at several locations across the world over months during a school year. The finals among the Top 4 teams are held at Goldman Sachs New York.

   • Rewards

     First Prize: $25,000

     Second Prize: $10,000

     Third Prize: $5,000

     Lodging and travel expenses are covered and additional prizes are handed out at the event.

2. tecBRIDGE Business Plan Competition

   The tecBRIDGE competition is divided into two parts, with one for college students across 14 colleges and universities and non-collegiate for early-stage entrepreneurs.

   • Eligibility

     ( For Collegiate )

     At least one member should be a college student.

     The product must identify commercial solutions through technical processes.

     ( For Non-Collegiate )

     The startup must gross less than $250k in revenue from its start date up to the last tax filing date.

     The product must identify commercial solutions through technical processes.

     For more details check out their website.

   • Location

     It is held in Northeastern Pennsylvania every year. The businesses who win have to establish their headquarters there as well.

   • Rewards

     Prizes worth $100,000 are shared amongst the winning teams.

3. HATCH Pitch

   Through the Hatch Pitch program, you get access to mentorship courses, discounted spaces, funds, education programs, financial consulting, and so on.

   • Eligibility

     Product/ Service must have been launched within 2 years.

     Founders should retain some part of the ownership.

     Must actively participate actively in Hatch Pitch coaching.

     Must receive less than $5 million in funds from third-party investors.

     For more details check out their website.

   • Location

     The competition is held at Entrepreneur space in Dallas.

   • Rewards

     Access to high-level incubators and mentorship.

4. Rice Business Plan Competition

   The Rice University business plan competition is specially designed for college students to present their ideas to investors, get mentorship and help shape their ideas and business journey better.

   • Eligibility

     Students managed or created businesses.

     Consists of at least 2 college students, and one student pursuing a graduate degree.

     Have raised less than $250k in equity capital.

     Have generated less than $100k in any 12-month period.

     For more details check out their website.

   • Location

     It is hosted in Houston at Rice University, graduate school of business.

   • Rewards

     In 2021, the winners were awarded investments worth $1.6 Million, cash prizes, etc.

5. New York StartUP! Business Plan Competition

   This competition is sponsored by the New York Public library to help entrepreneurs from around the world by giving wings to their ideas.

   • Eligibility

     Must live in Manhatten, Staten Island, or The Bronx.

     Your business should be in any of the above places as well.

     The idea or business model must be in the startup phase and shouldn’t have earned more than $10,000.

     For more details check out their website.

   • Location

     The competition is held in New York.

   • Rewards

     Grand prize worth $15000 and Runner Up prize worth $7500.

6. MIT 100k Business Plan and Expo

   This competition was started by MIT to promote innovation in the university as well as the world. It consists of 3 competitions throughout the year namely Pitch, Accelerate, and Launch.

   • Eligibility

     Each team should enter one idea.

     The ideas must be the original work of the participants.

     Fundings received at the time of entrance should be mentioned.

     For more details check out their website.

   • Location

     Hosted in Cambridge MA MIT campus from October to May through the academic year.

   • Rewards

     Pitch: $5000 jury award and $2000 audience choice award.

     Accelerate: 20 finalists get industry-specific mentorship programs with a budget of $1000 each. The top 10 finalists compete for the Audience choice award worth $10,000. The top 3 finalists immediately get into the finals of the launch.

     Launch: The winner gets a whopping amount of $100,000 while the runner gets $25000.

7. FAU Business Plan Competition

   The Florida Atlantic University Business Plan Competition was created for graduate and undergraduate students spanning all continents.

   • Eligibility

     The participants should either be undergraduate or graduate students.

     For more details check out their website.

   • Location

     The competition is held at Florida Atlantic University, in Boca Raton, Florida.

   • Rewards

     First Prize: $5000 and Second Prize: $500

8. NIBS Business Plan Competition

   The NIBS competition is held to help you discuss and give a boost to your ideas. It also helps you get guidance from industry experts.

   • Eligibility

     Entrants must be of legal age to have contracts as per the rules of their country of residence.

     Should not hold any employment apart from their own company.

     The plan should be for a startup business, not an acquisition.

     For more details check out their website.

   • Location

     It is held in the USA.

   • Rewards

     There’s a cash prize for the first three places as well as an opportunity to get an incubator program for the winners.

9. Get Seeded

   Get Seed is a two-part funding program for students in launching their businesses.

   • Eligibility

     At least one student should be from a higher education institution in Utah.

     Should be enrolled for nine credit hours during that semester.

     The funds should be used to take the idea further.

     For more details check out their website.

   • Location

     The business plan competition is held in Salt Lake City in Utah.

   • Rewards

     A micro-grant worth $500 and a seeded grant from $501 to $1500.

10. Pistoia Alliance President’s Startup Challenge

    This competition was designed for startups focusing on digital and health technology.

    • Eligibility

      Entities should be legally formed.

      The size of the company should be less than 50 people.

      Annual sales under $5 million.

      The product should have been launched within 3 years.

      Your country should be free of trade restrictions imposed by the USA.

      For more details check out their website.

    • Location

      You can submit your ideas from anywhere.

    • Rewards

      Five finalists win $5000 and 2 winners receive $20,000.

11. College of New Jersey’s Mayo Business Plan Competition

    This competition is held for students to appreciate new challenges.

    • Eligibility

      The teams should have at least two and bot more than four students from the College of New Jersey.

      For more details check out their website.

    • Location

      It is held at The College of New Jersey.

    • Rewards

      The winners are given mentorship and guidance programs.

12. Next Founders Business Plan Competition

    This competition is focused on startups with an innovative approach to solving social problems and global needs.

    • Eligibility

      It is for Canadian entrepreneurs with scalable, high-potential ventures.

      For more details check out their website.

    • Location

      It is held at the University of Toronto.

    • Rewards

      Up to 25,000 CAD$ in cash for funding your startup.

13. TechCrunch’s Startup Battlefield

    This competition is sponsored by TechCrunch and comprises two levels.

    • Eligibility

      The companies must have a functional prototype of their product or service to present to the committee.

      For more details check out their website.

    • Location

      It is held at different locations.

    • Rewards

      The winner gets $50,000 and two runner-ups get $5000 each.

14. New Venture Challenge

    This competition is held at the University of Chicago, and participants are judged on three bases- Innovation, Product Market Fit, and presentation.

    • Eligibility

      The eligibility information is available on their website.

    • Location

      The competition is held in Chicago, IL.

    • Rewards

      1st Place: $50,000; 2nd Place: $25,000; 3rd Place: $15,000. In addition to that, the winners are also given access to mentorship and resources.

15. New Venture Championship

    This competition is for those with a good business idea. Even if you don’t have a business plan, you can participate as the competition provides optional plan writing services.

    • Eligibility

      The team should have 2-5 members.

      Should have at least one graduate student.

      The students should be pursuing their undergraduate or graduate degrees.

      For more details check out their website.

    • Location

      It is held in Eugene, Oregon.

    • Rewards

      Teams have a chance to win cash prizes ranging from $3000 to $25,000 with additional benefits like the mentorship and rented office spaces.

16. Climatech & Energy Prize @MIT

    This competition is ideal for companies with a core focus on energy, climate change, and the environment.

    • Eligibility

      The team must have more than 2 members.

      At least 50% of the members should be part-time or full-time university students.

      For more details check out their website.

    • Location

      It is held in Cambridge, MA.

    • Rewards

      The winner gets a sizable sum of $1,00,000.

17. U.Pitch

    This competition gives entrants a chance to present their ideas to people from different levels and spectrums in the business space and get an opportunity for investments and mentorship programs.

    • Eligibility

      Entrants must be enrolled in an undergraduate or graduate program.

      The business should be functioning.

      The participants must be 30 or under 30 years of age.

      For more details check out their website.

    • Location

      It is held in San Francisco, California.

    • Rewards

      Prizes worth $10,000 are given.

18. CodeLaunch

    It is a seed accelerator competition for entrepreneurs who have technology startups.

    • Eligibility

      The detailed eligibility criteria can be found on their website.

    • Location

      CodeLaunch competitions are usually held in St. Louis, Missouri, where the organization is based.

    • Rewards

      The winner gets seed fund capital and access to other additional resources.

19. Baylor Business New Venture Competition

    This competition was launched by Baylor to help entrepreneurs discuss their ideas and get advice from judges.

    • Eligibility

      Must be an undergraduate student at Baylor University and McLennan Community College.

      For more details check out their website.

    • Location

      The competition is held at Baylor University, Waco, Texas.

    • Rewards

      The first prize winner receives $6000. The other finalists can win prizes ranging from $1500-$2000.

20. 13th IOT/WT World Cup

    The innovation world cup was started to give startups a chance to display their ideas and business. The competition aims to attract venture capitalists, investors, and potential business partners.

    • Eligibility

      The startup should have a concept of innovative technologies.

      You should have a functional prototype of the product.

      For more details check out their website.

    • Location

      The competition is held in Cleveland, Ohio.

    • Rewards

      You get a chance at winning prizes worth $500,000 and connect with leading tech companies in your field.

Conclusion

Even if you don’t get funded there’s a lot of chance to network, get exposure, and get your ideas validated. Especially, if you are someone who’s new in the business space business plan competitions are a great way to learn the ropes of the trade.

So, go ahead, write your business plan, look up the details, and register for a competition that fits your business the best!

When you enter a new venture, the business startup cost is the most crucial aspect and can be daunting if you don’t plan them well.

You do significant research on the idea and products you are developing but may not be clear as to what all expenses you will incur, how you can save your costs, and how to calculate the same. You may face liquidity or working capital issues going forward.

So, how can you save your business startup from falling out of cash?

This article explains everything you need to know about your business startup costs, how to calculate them, things to consider while calculating these costs, and how to save on them.

Before we jump on to understanding how to calculate the startup costs, let’s try to understand these startup costs and which costs are considered initial startup costs?

Understanding the Business Startup Costs

Your business startup costs are the initial expenses you make to launch your business and get it recognized among many customers. The cost of starting a business help you understand how much money you will need to launch your product to the customers.

The research shows that the restaurants, medical offices, and manufacturing companies are the most expensive small businesses and startups to launch since they require more than $100,000 as their startup costs.

It could be confusing which costs to consider as your initial startup cost. The information below will help you understand the costs regarded as startup costs.

Which Costs are Considered as Startup Costs for Your Business?

Calculating an estimated cost of starting a business is essential and requires your business prudence, whereas understanding which costs to include is a primary requirement before calculating them. The below list can help you understand these costs in detail.

1. Company Incorporation Fees

   These costs include all costs incurred for the company set up, such as registration fees, filing fees for articles of incorporation, federal or state licensing fees, etc. Hence, these are the costs incurred from a legal viewpoint to set up your company.

2. Research and Development (R&D) Cost

   These are the most crucial costs that research the product or service you offer and develop the product as per the idea that originated in your mind. While many startups require substantial R&D costs, others don’t need to incur so many expenses.

3. Equipment Costs

   Most manufacturing startup companies need major equipment to produce their products. The equipment cost includes those plants and machinery costs that you need to start manufacturing your items.

4. Office Space

   Be it a service company or a manufacturing plant, you will need an office either on rent or self-occupied to run your business. Your office space's rent expense or purchase cost is added to your business startup costs.

5. Marketing Costs

   No one knows your product or service when you start your business. To get recognized in the market, you need to advertise your products, and below are the different types of marketing costs added to your costs.

   • Website Development: You incur website development costs when you want to launch your products in the market and use online marketing to make your presence felt across the globe.
   • Content Creation: The content published on the website also costs you as your costs and hence, they are also part of your marketing costs.
   • Advertisement Costs: You will need to advertise your product or service on the web, in social media, in newspapers, or on television, and these costs are your advertisement costs.

6. Inventory

   When you are in retail, wholesale, manufacturing, or trading business, you need to maintain certain levels of inventory in order to meet your customers’ demands. At the same time, you will need to sell them as soon as possible to make them profitable. These initial inventory costs are your startup costs.

7. Office Furniture

   You will need office tables, chairs, air conditioners, storage racks, laptops, etc., for your office, and these are your one-time startup costs.

8. Utility

   While you start your new venture, you will also have to bear the utility expenses such as electricity, internet, telephone, etc.

9. Salaries

   Payroll expenses are another most crucial component of your startup costs. Salaries and other benefits require a significant portion of your expenses.

   Moreover, many founders don’t even take wages initially. However, you should always consider their salary costs in consideration to derive a reasonable estimate of your costs.

10. Consultants’ Fees

    Professional consultants like Certified Public Accountants and legal advisors are required at every stage of your startup’s growth. While starting your new business, these professionals can take care of your following requirements:

    • Company registration
    • Writing a business plan
    • Obtaining loans
    • Raising funds
    • Company valuation, etc.

11. Shipping

    Packing materials, postage, etc., can be your shipping costs if you are a retailer or wholesaler selling and delivering goods to your consumers. These costs may vary for different types of businesses.

12. Taxes

    When you incorporate a company and start making profits, you will be liable to corporate taxes, and other states will have their own sales tax or excise tax policies.

    Different states will have their own sales tax policy; hence, not all states have sales or excise tax implemented, and the rates of these taxes will also vary.

13. Other Small Business Startup Costs

    Apart from the above, the cost of starting a business may include traveling costs, insurance costs, distribution costs, customer acquisition expenses, etc.

    The costs mentioned above cover almost all startup costs for a business, and other costs may include costs that vary from one company to another.

Why Should You Know Your Startup Costs?

Estimating your expenses is vital and requires sincere efforts from each technical person involved in building your startup product. Read on to know the importance of the business startup costs and what purposes it caters to.

• Fundraising: Your new business startup will need initial capital to set up the company and incur other expenses when you are not generating revenue. In such times, you will need to raise funds, and the banks or other investors would require the details of your costs.
  → Download Now: Startup Fundraising Checklist
• Plan for business growth: When you understand your initial setup costs, you can prepare a well-structured strategy for your business growth, as it will give you an estimate of how much more money you will have to put in while planning for growth.
• Strategy for revenue generation: These costs will help you understand approximately when you will start generating revenue and how you can strategize your plans to recover the initial costs and start doing a profitable business.
• Attract investors: Your understanding of your costs will help potential investors know that your research is intense, and you know how to recover your costs and plan to increase the gross margin.

Hence, it is imperative to understand your startup costs and how to save them. Let’s learn how you can calculate these costs.

How to Calculate Startup Costs for Your Business?

There is no complex formula to calculate the costs; you just need to make a total of your estimated costs. However, the estimation procedure requires thought-through research and a comprehensive understanding of what you will spend.

Below are the steps to help you calculate your business startup costs correctly.

• Identify What You Will Spend

  In the first step, you will have to identify what expenses you will incur to launch your business. We already understood a broad category of expenses every startup company will encounter.

  However, specific companies will have special types of costs, such as medical startup companies with pharma and medicinal expenses, in addition to their intense research costs.

  You will also need to get quotations from various suppliers, professionals, and freelancers to estimate these expenses.

• Categorize Your Expenses

  Once you have a tentative list of your expenses, you can categorize them as office expenses, raw material purchases, marketing expenses, capital expenses, etc. However, not all costs can be precisely categorized; hence, you may classify them under miscellaneous or other costs.

  List out all costs that come to your mind in an excel sheet, and from there, you can start categorizing them.

• Make an Estimation of Your Costs

  In this estimation step; you will have to use your general prudence so that your estimations are not far away from the actual expenses. Assuming an average cost for each category is okay since you would not know the actual cost until you incur it.

  Alternatively, you can also allocate a fixed percentage of your budgeted costs and make estimations. For example, if your budget allows you to spend $50,000 on your total costs, you may estimate to spend 10% of the total costs ($5,000) on office furniture and other items.

• Calculate the One-time and Recurring Costs

  It is evident that not all startup costs are recurring, and most of these costs would be one-time. For example, your office furniture costs would be one-time costs while salary expenses are regular.

  You can also make a list of one-time and recurring costs as follows:

  One-time Costs:

  • Office space
  • Company incorporation fees
  • Office furniture
  • Website development expenses
  • Equipment costs

  Recurring Costs:

  • Raw materials
  • Salary
  • Consultants’ fees
  • Inventory
  • Office rent
  • Marketing expenses
  • Accounting
  • Taxes

  Let’s see an example of the business startup costs and how you should present them:

Things to Consider While Calculating Small Business Startup Costs

Your estimated expenses are not the actual expenses, and hence, you will have to be careful while evaluating these costs. The below tips will help you calculate the cost of starting a business effectively.

• Have sufficient funds to sustain your business
• Plan and start acting as budgeted
• Be reasonable, don’t overestimate
• Maintain a spreadsheet for your costs
• Revisit your expenses to check any variances

Your initial expenses may be huge since they will also include those one-time costs, however, there are specific ways through which you can save a few dollars.

How to Save on Startup Costs?

Initially, when you are not generating any revenue, it is important to save every dollar you have and spend it wisely. Below are the tips you can use to save on your startup costs:

• Hire Freelancers

  In the beginning, when you have less clarity on the day-to-day tasks, you can work with the freelancers instead of hiring full-time employees since the freelancers will only charge for the work they do.

• Try Co-working or Home Offices

  You can also save a considerable amount of your costs by working from home or using co-working spaces. Especially, business owners in service industries do not need much office space.

• Follow BYOD Principle

  You can also ask your team members to bring their own laptops so that you do not need to spend much on hardware. The bring your own device (BYOD) concept can help you save your costs, and you can use them to make more meaningful purchases.

• Outsource Certain Services

  In the beginning, you will not have many accounting entries to be recorded, and your other compliances may also not be that frequent. Hence, you may outsource such services to professional agencies instead of hiring full-time accountants or compliance officers.

• Flexible Budgeting

  You can prepare a budget with the flexibility to allow any delay or uncertainty so that you do not have any significant variances when you incur the expenses in real.

• Understand Tax Benefits

  Many times, the government provides specific relief or tax benefits to the newly set up companies. You should understand such tax deductions and benefits wisely to save on your tax expenses.

• Negotiate and Discuss

  It is advisable to negotiate with suppliers, contractors, and freelancers since you also need to run your business. When you discuss various possibilities, you may save on your estimated costs.

• Wrapping Up

  Your business startup costs are the center of attraction for the investors, lenders, and other stakeholders. You will have countless turns or twists while starting your company. You should always consider various situations and estimate your startup costs effectively.

How Can We Help?

We at Upmetrics can help you estimate your startup costs using our software tool. Experience a faster and more efficient way of the business startup cost estimation as we can also help you write your business plan and offer solutions for financial reporting.

Request your free demo to know more about the solutions we offer.

What works for someone else might not work for you.

The same goes for a business plan and the type of services you take to write one.

You might have heard and read about the importance of business plans from various resources, so the next step would be to decide upon the method and budget for writing your plan.

Depending upon your business, you might not need to spend hundreds or thousands of dollars costing business plan. And as effective spending matters for businesses, it is the best practice to go through all of your options and pick the one that fits your business and budget the most.

In this article, we’ll discuss different sources of writing a business plan, and normally how much a business plan writing costs.

1. Hiring a Business Plan Writer

2. Hiring a Consultant

3. Writing it Through a Software

4. Using Combined Services

Hiring a Business Plan Writer

With thousands of things to look after, you might not want to or have the time to write a business plan on your own. In this case, you can hire a low cost business plan writer who’ll write a professional and well-put-together business plan.

• Pros:

  • Time-saving.
  • Well researched with added points.
  • Business plan writers know the jargon and style investors prefer.
  • Let you focus on other aspects of your business.

• Cons:

  • Might look homogenous with other plans in the same industry.
  • You might have difficulty including your own vision in the plan.
  • Would be a big drawback if the writer doesn’t know enough about your industry.
  • Can be difficult to present as you’ve not written it.
  • Doesn’t help you answer an investor's tangent questions.
  • Can be expensive, especially if you’re just starting out.

• Cost:

  A business plan writer costs anywhere between $1000 to $3000. It is the appropriate method for businesses that need above $500,000 in investment and has complex planning and staffing needs.

Hiring a Consultant

One of the most popular options, especially if you are trying to attract a particularly large sum of investment. A consultancy company would help you at every step from research to strategizing, business plan writing, and updating the plan.

But on the downside consultancy services can be pretty expensive and aren’t for every business. The cost of a business plan depends on many factors including the size and complexity of your business idea

• Pros:

  • Consultants are usually experts in the niche and can give out-of-the-box ideas.
  • They look at things from an unbiased perspective.
  • They charge a predecided fixed amount.
  • Help with updating and improving business practices and plans.

• Cons:

  • They handle multiple clients and struggle with availability.
  • They don’t give a guarantee of success.
  • Consulting services are expensive and not viable for everyone.
  • It can be difficult if the company leaves the organization.
  • Many consultants go for generic solutions which might not work.

• Cost:

  Consultancy services for writing a business plan expense anything between $25,000 to $50,000. This also depends highly upon the firm you’re approaching and their level of expertise in the industry.

  Consultancies also charge on a per-hour basis. The rates also depend upon the complexity of the work.

Writing it Through a Software

Writing your business plan with the help of software is the least expensive option on the list. On the downside, you’d have to do most of the work yourself. But that gives you an added benefit of knowing your business, the strategies, and the industry inside out. It also reduces your dependence on external resources.

And although it is time-consuming, writing your business plan yourself helps you get the main essence of planning your business and also makes you sound more credible to your investors.

If you have a large-scale business, writing it on your own might not be viable given the time constraints. Also, it can be difficult to come out of roadblocks on your own.

• Pros:

  • You get to inculcate your plans and strategies better in your business plan.
  • It is the cheapest way to write a well-rounded plan.
  • You can work more independently on your plan.
  • Financial forecast software helps you deal with your finances too.
  • Most of the software services come with step-by-step guidance.

• Cons:

  • It is time-consuming.
  • You might need additional help.
  • Might not be sufficient if you need a bigger amount in investment.

• Cost:

  Software as a business plan writing service can cost anything between $50 to $500 per annum depending upon the plan and software you choose to go with.

Using Combined Services

Now if you don’t want to spend a huge chunk of money on a business plan writer or consultancy, but need a little more help than a business plan software would provide then you can also use a combination of services to write your business plan. If you need more help with the leg work you can do so with the help of a consultant and business plan software.

And if you can do the initial research and create the first draft of your business plan, you can use a combination of business plan software and business plan writer.

This might be a good choice for entrepreneurs who have the initial idea and a rough plan of how to set goals and milestones but would need more help with writing a business plan.

Why Does Taking Part in Business Plan Writing Matter?

All of us know that a business plan is much more than a 20-30 page long document. It captures the essence of your business and acts as a roadmap on your business journey. So, even if you’d save loads of time by using a business plan writer or consultant, your business plan would lag in a personal touch and unique vision.

Also, it is important to note that you can’t rely too much on consultants. Because no matter how good they are at their job, they’re still an external source and can leave your business anytime, and that would be a major setback for your business if you rely solely on your consultant.

Hence, taking part in your business plan writing process would ensure that you have a strong grip on your business from the beginning itself.

Conclusion

In conclusion, if you look through your options you can not only save money but also pick a method that would be the best for your business.

A business plan is perhaps the most important document for your business.

Hence, it is essential for you to think through these 3 steps:

1. Figure out the time and resources you have.
2. Figure out what you can do by yourself and the areas you would need help in writing.
3. After you find out what services you’d need, study the different software, writers, and consultants available on the market.
4. Look through the services and what their previous clients say about them before you go ahead and take your pick.

At the end of the day, do your research, pick the right services, and take part in the process with full force and determination.

After all, your business dreams deserve all of it and more!

Your business’s net income is the metric that will tell you how much you earned in a particular period (year, month, or quarter). An income statement of your financial statement will provide you with an insight into your operating income and net income.

While the operating profit is your income generated out of the primary operations of your business, the net income is a measurement that will indicate how much money you have after deducting all expenses from your income.

Many accountants confuse net income with the operating and cash income, but the net income is not one of them.

Let’s learn how to calculate net income from the balance sheet, its components, net income formula, and operating net income.

The majority of the pre-revenue companies have negative net income (net loss) because initially, they spend and invest money in product development.

In contrast, the significant revenue starts flowing into the business after some period.

Let’s study the net income formula and understand how to calculate the net income from the balance sheet.

Net Income Formula

You can calculate net income using the comprehensive method and the simplified method.

• Comprehensive Method

  In this method, net income is derived by deducting the cost of goods sold (COGS) and expenses from the business's total revenue. You can calculate the net income using the below formula:

  Revenue - Cost of Goods Sold - Expenses = Net Income

  Net income is often referred to as ‘net profit,’ or ‘net earnings,’ or many call it ‘bottom line’ since it appears at the bottom of the income statement. You simply need to take all income you earned and deduct all expenses you incurred in a specified period for which you want to calculate your net income.

  Net income is used to incur daily costs, pay off your business debts, make capital investments, and pay shareholders or retained for future use.

• Simplified Method

  This method of calculating net income uses gross income and deducts total expenses from the same. The simplified formula for net income is listed below:

  Gross Income - Expenses = Net Income or, Total Income - Total Expenses = Net Income

  The simplified method works on the logic to deduct all expenses from the total income received for your business. It is the simplest way to measure the profitability of your startup.

Your net income can be positive or negative, and when it is negative, it indicates that your expenses were higher than the income you generated for your business.

Let’s understand the net income formula with the help of an example:

​Net Income Formula: An Example

Suppose a clothing retailer in Houston, Green Leaf LLC, wants to calculate his net business income for the calendar year 2021. He has the following details with him:

Let’s help the retailer in calculating his business net income using both methods:

• Net Income Calculation Using Comprehensive Formula

  Revenue - Cost of Goods Sold - Expenses = Net Income

  Hence, $85,000 - $33,000 - ($12,000+$2,500+$5,500+$1,900+$1,100+$1,000) = $28,000

  The net income of the Green Leaf LLC is $28,000.

• Net Income Calculation Using Simplified Formula

  Gross Income - Expenses = Net Income

  Where, Gross Income = Revenue - Cost of Goods Sold = $85,000-$33,000 = $52,000

  And Expenses = $12,000+$2,500+$5,500+$1,900+$1,100+$1,000 = $24,000

  Net Income = $52,000 - $24,000 = $28,000

Key Components of Net Income

You will need certain minimum items from the balance sheet to calculate the net income of your business. Let us break down the formula and understand each component of the net income formula to calculate your net income accurately.

• Revenue:

  You need to know your business's total revenue to derive how much net income you have generated in a period. Revenue refers to the income you generate from your business, and it will include all other revenues, such as profit from the sale of an asset.

• Cost of Goods Sold

  When you deduct the cost of goods sold from the revenue, you get the gross income. The cost of goods sold (COGS) refers to the expenses incurred to run your business's main operations, such as raw material costs.

• Expenses

  From the gross income, you must deduct the other expenses to derive the net income. These expenses include office rent, utility expenses, etc.

Why is Business Net Income So Important?

Apart from measuring the business profitability, your business net income will help you understand how efficiently you used your resources to generate revenue for your business.

While negative net income is unfavorable for any business, for new startup businesses, it is quite normal to have negative net income in the initial 2-3 years.

However, if it continues longer, it is an alarming signal that the business may not be successful. Hence, your business’s success lies within your income statement. Your income statement analysis will allow you to manage your expenses and put effort into increasing your net income.

Operating Net Income Formula

Since the operating net income is a net income before deducting interest and tax expenses, you can calculate it by adding these expenses to the net income:

Alternatively, your operating net income can also be derived as follows:

​Operating Net Income Formula: An Example

Let’s take the same clothing retailer’s example where his interest expense is already given in the table amounting to $1,100 and his tax expense of $1,000 for that period.

In this case, his net operating income = $28,000 + $1,100 + $1,000 = $30,100.

Or, net operating income = $85,000 - $33,000 - ($24,000-$1,100-$1,000) = $30,100

Concluding Thoughts

It is quite simple to calculate the net income if you have all the necessary details. However, interpreting your net income and taking the right actions after calculating your net income makes a huge difference.

Your net income can be used to calculator multiple ratios, and these ratios can help you understand the financial performance of your business. Calculate your net income accurately and use it wisely because that will lead you to do a successful business.

How Can Upmetrics Help?

At Upmetrics, we have smart solutions to help you calculate your net income and provide insightful analysis of the operating efficiency of your business. We have developed user-friendly software that will require minimal effort from you as the maximum work is done using various tools in our software.

The source and uses of funds statement explain where a company's money came from and how the organization has put it to use in the past and how they will use the funds in the future. It contains the cash inflows into the company, the cash received, the cash outflows from the company, or the money spent.

So, what purpose does it serve?

Mostly, lenders will ask for these statements when you apply for a business loan. It will also help your investors understand where the funds have been used.

If your sources and uses of funds statement are accurately prepared, it can communicate well with the readers, and hence, it is quite crucial to prepare a compelling sources and uses of funds statement.

This article explains the sources and uses of funds statements and the step in creating the statements with examples.

These statements are widely used for

• Business loan purposes,
• Attracting investors, and
• Predicting the impact of changes in the balance sheet

The Sources and Uses of Funds have two parts,

• The first part is the sources from which the company gets its funds, and
• The second part is the uses, application, or spending of the money.

Let’s understand both sections of the statement in detail.

Uses of Funds

Often called ‘the application of funds, uses of funds reflect how an organization used the money it received from various sources. The uses of funds can also be understood as the cash outflow since it is the money spent for various activities performed to achieve the organizational goals.

It generally consists of the following components:

• Money Required for Operational Activities

  Organizations will need cash and working capital to run the business and perform day-to-day activities.

• Opening Quantities of Supplies, Equipment, and Furniture

  The opening balance of the supplies, equipment, and furniture tells us where the organization has already spent its money.

• Purchase of Land and Building

  The amount spent on acquiring land and building for business use is a huge capital expense and results in cash outflow.

• Initial Startup Costs

  These costs Include rent, deposits paid for the rented building/apartment, machinery acquisition costs, initial payments for insurance, company setup costs, etc.

• Other Working Capital Needs

  These include other operating costs such as the rental expenses of the leased machinery, repairs and maintenance expenses, outsourcing costs, etc.

Sources of Funds

Businesses need capital or funding to run the operations and when the new business is set up, it requires sufficient funding to incur initial start-up costs. Hence, the sources of funds also include the money your investors have given to you.

Below are the other elements of the sources of the funds for most businesses.

• Owner Contributions

  Owners of the businesses bring specific amounts of capital to start the company and they also contribute more capital as and when needed from time to time.

• Sales of Stock

  It includes the sale of finished goods and any other inventory that will not be used by the company.

• Sales of Assets

  The assets that the companies sell due to discontinuance of some of the operations or assets becoming non-operatable are another source of funds.

• Cash Income

  Any other cash income generated from the sale is also considered one of the sources of funds.

Steps to Create the Sources and Uses of Funds Statement

One of the essential tasks of an organization in preparing the financial statements of the company would be to prepare the sources and uses of funds statement. It is because the statement reflects the efficiency of the business in depicting how effectively funds were utilized from the available sources.

The uses of funds section is prepared first, and then the sources of funds.

Let’s learn how to prepare the uses of funds section of the sources and uses of the funds statement.

Steps to Create Uses of Funds

1. Note down all the costs included in the uses of funds, such as plant and machinery, initial startup costs, suppliers and marketing expenses, and other working capital costs.

2. Add all the numbers and make a total to name ‘total of startup costs’ as shown in the example below.

3. Once you have added all the uses of funds costs, write an estimate of

   • The capital costs required for purchasing the buildings, machinery, and vehicles and

   • The working capital requirements to fund day-to-day operations.

Steps to Create Sources of Funds

This section lists all the sources of funds depicting from where the money has come to fund the business.

1. List the contributions received from the owners and the investors.

2. Write the security that you offer for the loan you wish to secure.

3. Any other sources of funds that you can use to fund the business in case you cannot pay the loan.

Sample Sources and Uses of Funds Statement

While preparing the statement for sources and uses of funds, please note it has to be simple, and easy to understand. If you complicate the statement by adding difficult terms or complex numbers, readers may misinterpret the statement and you may lose a potential investor or a bank loan.

Statement of Sources and Uses of Funds:

The Bottom Line

As you grow your business, you may need more funds to meet the business expansion costs, and hence, it is important not only the startup companies but the well-established businesses as well to craft a compelling statement of sources and uses of funds.

How Can We Help?

We can help you prepare the statement of sources and uses of funds faster and more accurate along with other reports such as financial statements, ratio analysis to help you better understand the financial position of your company

Request your free demo at Upmetrics, to input only the minimum elements so that we can compute it for you.

Although a eureka moment is amazing, you can’t keep waiting for it to happen.

After all, checking the viability of your business, and solving its problems, periodic slumps and loopholes need immediate attention. You need to think on your feet and find a solution, and a viable one on top of that.

But how would we do that? Through market research.

Market research helps you understand whether the market needs your product or not when you start a new business, but also when you are trying to expand or improve your existing business. It helps you understand exactly where you’re going wrong and how to solve that.

Then again, sampled surveys are biased and not everyone can burn the cash to collect in-person data.

So, to help you conduct effective market research we have compiled a list of the 8 best market research tools to help you research better, faster, and more economically.

1. Statista

If you aren’t a fan of complicated numbers and long paragraphs of research data, then Statista might be just the right market research analysis tool for you. The website collects data from various resources and converts it into charts and graphs to make it easy for you to understand.

Also, Statista divides its data based on relevance with different related questions to your field. For example, if you have a B&B business, and want to find out the average per night cost of a B&B, there’s a chart for it.

Another benefit of using Statista is that the charts are updated constantly. So, if you have a link stored from a year or two ago, you don’t need to worry about its relevance as the data is updated constantly.

But also keep in mind that Statista doesn’t conduct its own research, but collects data from several other resources.

Pricing: Free; $39 per month, billed annually: $1950 ( One-time 30 day access)

2. Tableau

Finding the or creating visuals for your data can be quite a job. But with Tableau, it no longer needs to be that way. With this tool, you can access data from any online source and create charts and other visual representations of it.

This makes it easier to store and analyze data and to present it to your stakeholders and make your ideas and analytics easier to understand.

Tableau was created with a vision to make data analysis more accessible to people through visualization. And the best part is, that the software is constantly upgraded to take it one step closer to human analytical creativity.

Pricing: Tableau Viewer $12; Tableau Explorer $35; Tableau Creator $70

3. Brandwatch

Social media networks are probably one of the biggest marketing tools of the 21st century. But keeping up with everything that happens on social media, even for the branding aspect can be tough.

Brandwatch keeps track of several brand conversations that occur across various social media platforms and gives you valuable data that you can use to improve your social media and marketing strategy.

You can also track market trends, brand research & brand reputation, and more across various aspects of the business. The site also offers tools like competitive analysis and data democratization.

Above all, Brandwatch is one of the top market insight tools on the internet.

Pricing: Free; Pro $800; Enterprise $3000

4. NeilsenIQ

NeilsenIQ is a consumer intelligence consultancy that works with your business to find the best consumer insights, distribution channels, and customer data and eventually helps you create a range of products or services that align with your customer's needs. Which eventually helps your business thrive.

It also helps you analyze your product launch's internal and external conditions and predict your sales forecasts. Nielsen also runs surveys to gain customer insights into your products as well.

What sets Neilsen apart from the other market research softwares is that it works as a consultant more than a self-service software. Hence, it is good for brands with bigger product launch budgets.

Pricing: Available on request.

5. Upwave

Upwave helps you create charts and visual data to represent it to your stakeholders and helps you create customized surveys for data collection.

The biggest advantage of Upwave’s marketing research tool is that it collects data from your actual target audience, instead of getting answers from people who are paid for their answers and this helps you avoid skewed results.

You can create as many surveys as you want once you subscribe to one of the plans. The basic plan has a limit of 6 questions per survey, you can add any number of questions with the more advanced options.

Pricing: $2 per study participant (Basic); $3 per study participant ( extended); $4 per study participant ( advanced)

6. Questback

Questback is another excellent tool to help you collect and analyze data, and eventually create meaningful solutions out of it. Be it creating surveys or presenting your data in a meaningful way, Questback can help you do all of it.

Questback helps you get meaningful insights at every stage of the engagement cycle. It captures all kinds of feedback from ad-hoc, process-based, scheduled, and on-demand feedback.

Overall, Questback helps you gain insight and act upon it at every step of your journey so your decisions are smarter, better, and more efficient.

Pricing: Starter Free; Business- Pricing available on request; Enterprise- Pricing available on request.

7. Attest

Attest is a great software if you know who your target audience is. Because Attest survey allows you to access data from 110 million people across 49 countries and make your surveys as niche as possible for your business.

Apart from that, the data has a great quality as it goes through three layers of quality measures. Also, you get your survey results within days making it one of the most efficient tools for market research out there.

Attest is great for anyone who has a partial or full idea of their target audience and would like to collect more data and analyze it.

There are also tools like

• Answer quota: which helps you set qualifying factors to improve the quality of your survey
• Statistical significance calculator: This helps you analyze how one factor differentiates two groups. Eg: The difference between groups of people who prefer Chinese or Italian food
• Tracker surveys: Sends your surveys multiple times to keep track of changing trends.

Pricing: Free; Professional- starts at $25000 ; Premium- starts at $44000; Enterprise- Pricing available on request

8. Remesh.ai

Remesh is an AI-based market research & customer research tool that helps you create conversation-based surveys for your customers. Your customers can start a conversation with the system and give you feedback on your product or service.

You can also add open-ended questions, polls, images, and videos to get a more in-depth response.

The biggest advantage of this tool is its speed and the possibility to make your surveys more interactive.

Pricing: Available on request

Conclusion

As no two businesses are built the same, there’s a high possibility that your market research needs would be different too. Hence, it is a good practice to go through all of your options and select the top market research tool that checks off most of your business and marketing needs.

The software you choose would also be heavily based on the type of your target audience, the amount of time they have, the pace at which you need results, and so on.

Most of the above software services offer a free demo or consultation call, hence you can get to experience the tool firsthand before you start using it.

It is essential to do your market research and keep updating your data to stay at the top of your game.

If you are planning to start or grow your business, you might have heard about the importance of business planning countless times. And yes, it is necessary to have a plan. After all, it’ll be your roadmap to success.

But how would you go about it? Where will you start? And most importantly is there a tried and tested process that can make your job easier? What if we told you there is such a process?

And through this article, we’ll walk you through everything from what is business planning to the steps of the business planning process.

Steps of Business Planning Process

Although there’s no sole right way to go about the process of planning your business, here’s a compilation of steps that’ll make your planning process faster and easier.

1. Carry out your Research

The first step to creating a business plan is to do thorough research about the business and industry you are trying to get into. Tap into all the information you can get about your target audience, potential customer base, competitors, market and industry trends, cost of business, etc.

You can give a form to your research by asking yourself the following questions:

1. What are your goals?
2. Where does your business stand currently?
3. What are the prevailing market trends?
4. What strategies is your competitor following?

You can find your answers by conducting market surveys, talking to customers and industry experts, designing good questionnaires, reading articles, blogs, and news updates about your industry and the related ones, and so on.

Also, it is a good practice to conduct a SWOT analysis for your company to understand how your company’s strengths and weaknesses would help you stand apart from your competitors based on the current market statistics.

2. Make a Framework

Once you're done with your research the next step is to make a framework or a set of strategies for your business based on your research and business goals. You can either design strategies from scratch or reframe previously tried and tested successful strategies to fit your business goals.

But remember that you’ll have to tweak strategies to fit your unique competitive advantages and goals. Hence, strategies that are already being used can act as a good foundation, but it is essential to remember that you’ll have to expand upon them or improvise them for your business.

This step can be completed by taking a deep dive into your customer’s buying motivations and challenges that your product can help solve. Based on that, make a marketing plan, operations plan, and cost structure for your business at least for the first few years of your business.

3. Formulate your Financial Forecasts

No matter how tedious finances might seem, they are an integral part of any business. When you map out your finances it is essential to note down all the costs you’ll incur as you grow and run your business for the next five years and what would be your potential revenue, and if or not it would leave room for profit.

You can get your financial forecast by adding your financial assumptions to a financial system which will give you your cash flow statements and give you an idea of what amount of funds you’ll need to start and run your business for the first year.

This step is especially helpful if you want to acquire funding for your business. Nonetheless, it helps you prepare to deal with the financial aspects of your business.

A financial statement essentially provides details of a company’s expenses and profits. It also provides an overview of the company’s current financial stance, including its assets and liabilities.

Through this section try to write down and explain how you plan to use your investments and how would the same give a return.

4. Draft a Plan

As you’re done with creating business strategies and planning your finances, it is time to draft your business plan and compile everything into a single document. As you are done with all the technical aspects, this step should feel relatively easy.

But if you need help drafting a business plan and making it look presentable, you can subscribe to a business plan software that comes with predesigned templates and tools to make your work easier.

5. Recheck and Improvise

Now as you’re done with writing your plan, it is a good idea to give enough time to edit it. Check for any unclear sentences, irrelevant phrases, or confusing terms.

Take suggestions from your team members who are familiar with the functioning of your business. Finally, proofread for any grammar or punctuation errors. One of the most popular and useful pieces of editing advice is to put your work aside for a while and then look at it with fresh eyes to edit it better.

6. Create an Impressive Business Plan Presentation

Now, as you’re done with writing your business plan it is time to create a presentation that leaves an excellent impression on your audience. Highlight all the important and relevant points.

Also, add references for your investors like your financial reports, resumes of your key team members, snippets of your marketing plan, and past sales reports to have a well-rounded presentation.

Conclusion

It is true that starting a business is intimidating. It includes a bunch of emotions, chaotic ideas, and a will to take risks. ( Risks are a part and parcel of starting a business, no matter how much you plan, but yes planning helps you prepare for it.) But in the end, all of us know that all of it is worth it if you have a profitable business in the end.

And business planning is something that takes you one step closer to your idea of success. Moreover, a plan keeps you going in the face of challenges and adversities, and helps you push yourself a little harder to achieve your dreams when things get tougher.

Above all, a business plan helps you take action and turn ideas into a real and functioning business. So, what are you waiting for? Go ahead and start planning!

And while you’re at it do check out Upmetrics’s business planning software to make business planning easier and faster.

Startups and tech companies are no longer just a Silicon Valley thing.

With new ideas and innovations blooming in every corner, startups have become synonymous with something out of the ordinary and unique.

And, isn’t that something all of us want to achieve? Something that has never been done before? Something that brings about a revolution of sorts in the industry?

Then again there is a popular statistic that 90% of new startups fail.

And of course, setting up a business, startup or not isn’t for the fainthearted. It takes loads of planning, strategizing, and constant analysis of how well your business is doing.

Moreover, it is hardly easy on the financial side too.

But before you give up on your long-cherished startup dream due to the dreadful statistics and data, we’d like to tell you there’s always a way around it.

With a deep dive into the statistics, the reasons why startups fail, and how you can avoid that as a startup, we’ll try to get you to the coveted 10% per cent through this article.

How Many Startups Fail: Startup Failure Rates

Here’s what the startup spectrum looks like according to data and statistics:

1. 75% of venture-backed startups don’t succeed.

2. Less than 50% of the businesses stay in operation until their fifth year.

3. 33% of the startups reach the 10-year mark.

4. Cash flow problems are the major reason for startup failure. ( Almost 82% of the startups that fail, do so because of cash flow problems.)

5. The information industry has a failure rate of 63%.

Although the statistics are usually alarming, it’s always a good practice to have a look. It makes you aware of the market condition and prepares you to take the biggest challenges head-on. Moreover, a closer look also helps you understand what these numbers mean for your business. Here are a few more specific statistics on startups:

1. As we’ve discussed earlier, 90% of new startups fail
   • Out of which 20% fail in the first year itself.
   • 34% fail in the first two years.
   • And only 20% make it to the 15-year mark.
2. Only 40% of the startups become profitable
   • Most startups operate at a loss.
   • Startups with a cofounder are 3 times more likely to succeed.
   • The major hurdle for most startups is cash flow problems. 

3. Startup failure rates are mostly the same across different industries

   As the reasons for startup failures are the same across industries the rate of startup failure across industries is similar as well.

Reasons Why Startups Fail

From the wrong product-market fit to the lack of strong leadership there are several reasons for a startup’s failure, and yes the wrong time and place can be a factor too. And although you can’t control all the factors, there are a lot of aspects that you can pay attention to and prevent from becoming a reason for your startup’s failure.

• Lack of Funds

  As a new business that is continuously growing and expanding, lack of funds is a common problem. Be it for setting up inventory, building your team, or buying equipment, you’d need finances, and that too at the right time. One possible solution is to seek funding from a reliable source as you begin and keep a check on your cash flow, profits, and other related financial concerns.

  Also, planning your finances in advance and having approximate projections of cash flow, profits, and balance sheets can help you avoid financial hassles.

• Wrong Market

  Sometimes it isn’t your business, but your target market. This means: you have a good product/ service at hand but are targeting the wrong audience. In fact, according to statistics 42% of the startups that fail, do so because of the wrong product-market fit.

  Hence, it is essential to do thorough market research, carry out surveys and focus groups, analyze what you find and keep a constant check on your market’s responses. This helps you understand if you are working with the right market and in the right direction or not.

• Lack of Research

  From ending up in the wrong market, designing a product no one needs to overspending or underspending on various resources, lack of research is a root cause of several problems that businesses face.

  By doing your research you’ll know what you are getting yourself into, and be better prepared for challenges you might come across.  

• Bad Partnership

  A bad partnership can be anything from a lack of equal contribution and collaboration to frequent disagreements and lack of consensus. These things often go unnoticed and are a very common reason for startup failures.

  → Download Now: Small Business Partnership Contract Template

  Hence, it is essential for you to ensure that you have partners who not only have complementary skills but can also think on the same wavelength as you and can have constructive debates over various subjects instead of arguments. 

• Bad Marketing

  Many successful businesses around the world thrive on their larger than life marketing strategies. So, we can safely assume that marketing strategies are an integral part of any successful startup or business.

  But what could go wrong? From targeting the wrong audience, giving out a vague or unclear message to being all over the place, several things can go wrong due to a bad marketing strategy. Hence, it is essential to pay attention to the finer details and devise a proper marketing strategy.

• Lack of Expertise

  Although many of us learn along the way to starting and growing our business, having a certain level of expertise is necessary to enter and make a place for yourself in any industry. Hence, you should ensure that you learn whatever you can before you get into an industry.

How to Avoid Failing

Now as we’ve discussed various reasons for startup failure, you might wonder how you can avoid failing? Although there’s not just a single right way to run a startup, there are several methods and steps that you can follow to increase your chances of success. 

Some of which are as follows:

• Set Realistic Goals

  The first step toward having a thriving startup is to set a clear and realistic goal. Having a goal gives you a direction to work in and prevents your efforts from running astray. It also motivates you and gives you a solid reason to work for.

  Thus, the first step is to have a clear and realistic goal.

• Do your Research

  Now as you’ve set a goal, it’s time to do your research and find out where your business would fit into the industry, is your product needed, does it have a sizable market, does this industry have good growth potential, and what are the challenges people face in the industry.

  This helps you do more productive work and stay prepared for both challenges and opportunities.

• Plan your Business

  One of the best ways to security loopholes in your business idea, do your research right, and formulate good strategies is to have a business plan. A business plan gives a framework for your business and helps you navigate through your business journey smoothly.

  Hence, it is always a good practice to get your ideas and research about the various aspects of your business on paper before getting started.

• Analyze the Risks ( And Be Prepared)

  Risks are an inseparable part of doing anything new and the same holds for a startup. But that doesn’t mean that these risks would necessarily have a bad impact on your business.

  If you analyze common risks associated with the industry and prepare for them well in advance you can easily avoid them or even turn them in your favour. Research can come in handy for you in this aspect as well.

• Be Passionate

  Follow your passion, This is perhaps the most overused advice. But what we want to say is that trying to find your ultimate passion and wasting away your life behind it is in no way ideal, you need to pursue your startup idea with an unrelenting passion to do better and to know more about the industry.

  This will not only reduce your chances of failure but also make the process of doing business better. Passion also helps you stay motivated during downsides and problems in your startup journey.

• Don’t Give Up

  Finally, the most important thing for business success is not to give up when you face obstacles and tough times and to work harder to overcome slumps instead of feeling demotivated. 

Future of Startups

Although you might not really know what the future holds for your business, there are a few trends that you should watch out for, and possibly include in your business if you can:

1. Startups are growing outside of Silicon Valley, and the majority of them would be out of it in the future.

2. Subscription-based services and products are expected to grow at a high rate in the coming years.

3. Personalized marketing and a customer-centric model is one of the most futuristic things you can do with a business.

4. More startup entrepreneurs would be recent college graduates. 

5. Technology would be heavily used for bookkeeping and financial records.

6. Partnerships and collaborations amongst businesses are expected to increase. 

Overall, the future of startups is exciting and full of potential if you go about it the right way.

Conclusion

Above all, it is important to know the statistics, the risks involved and to plan and strategize before you go ahead and start your business, but it is also equally important to execute your idea with precision and have faith in what you want to and can achieve.

At the end of the day, you must also keep in mind that even if the majority of startups fail, there’s still a huge chunk that succeeds and brings about innovation in the industry they are in.

So, what are you waiting for? Do your research, plan your business, and execute it with confidence.

In the meanwhile, remember that someone somewhere is rooting for your success!

The unique value your business adds to the world matters more than anything.

Yes, the quality is important and so is execution and planning. But it all boils down to what’s exceptional and unique about your business in the end. It is something that makes your business truly remarkable out of thousands of others.

But wait a minute, what exactly is a unique value proposition? What are its elements? Above all, how to create a unique value proposition for your business and use it to your advantage?

Well, let’s find out.

A value proposition commonly does these 3 things for your business:

1. Explains how your product/ service is useful to your customers.
2. Clearly defines the benefits your product offers.
3. Describes your competitive advantage.

Your value proposition is the first thing that your customers notice on your website. Also, it acts as a foundation for your marketing efforts including everything from blogs to social media.

Why is a Value Proposition Important?

As we’ve discussed earlier, the value proposition is one of the most important elements of your business. But, why?

Because a value proposition is the first message your customer receives about your business. And a good value proposition ensures that your customer understands your brand properly.

Most importantly, it helps your customer decide whether your product is worth their time and research or not.

The Elements of a Value Proposition

Popularly, a value proposition consists of four basic elements: A headline, a sub-headline, a visual element, and three to four bullet points.

Although there’s no right or wrong way to write a value proposition, the following steps can help you write an excellent value proposition:

1. Headline: This explains the major purpose of your business in a clear and precise manner.
2. Sub-headline: This would consist of an explanation of what you offer, who can use it, and why they should use it.
3. Bullet points: You can follow up the sub-headline with major features of your product/service. These features are the ones that make up the cornerstones of your product.
4. Visual element: In today’s attention economy, where several brands are grappling for a person’s attention, you can make your job a little easier by adding a unique and self-explanatory visual element.

Apart from having the above elements, your value proposition should be three things: Simple, Clear, and Bang on.

How to Create a Unique Value Proposition?

Even though the value proposition consists of four sentences in total, all of us know that research, effort, and thorough understanding of your business and customers goes into getting it right.;

But hey, don’t worry. We have a stepwise procedure to make your job easier.

Here’s how you can write a well-balanced value proposition for your business:

• Figure out your target audience’s main problem:

  A lot of businesses tend to create problems for solutions, instead of creating solutions for problems. A fatal mistake, and you'll be surprised to know the number of people who commit it. But the good news is that it is easy to avoid this mistake.

  By conducting thorough research on your product, the market, and understanding your audience’s most pressing concerns you can avoid the hassle of having the wrong product or focusing on the wrong market.

  

  You can do your research in several ways including talking to your marketing and sales team, running A/B tests on your website, and looking at reviews on your and your competitor’s website.

  For example, let’s assume that you are a dropshipping business that offers global delivery. And your target customer is looking for an efficient and reliable service to get their products delivered across a certain region. Then your service can solve their problem.

• List out the benefits your product offers

  The next step is to list out the benefits your product offers in a clear and precise way and explain how each benefit helps your customer.

  

  Continuing the above example, you can define how your dropshipping services are cost-effective, efficient, and reliable.

• Explain why these benefits matter

  Now you’ll try to figure out and describe why your customers should care about the said benefits and how these benefits would add value to their lives.

  If we take the above example, you can highlight that as your services are reliable your customers wouldn’t have to worry about missing packages, destroyed products, and so on.

• Associate your customer’s problems with your solution

  This is a major step in deciding what your value proposition would look like. As you’ve analyzed your customers and your features, it is time to try and understand how well your product would solve your customer’s problem, if at all.

  If you find a fit, then you can go ahead and write your value proposition, if not you need to go back to step two and make tweaks and changes so your solution fits the customers' needs better. This step helps you ensure that you have a good product-market fit and a value proposition that speaks to your customers.

• Differentiate your benefits from your competitors

  Think about this, what sets you apart from thousands of others offering the same product? Why should the customer choose you?

  And the factor that differentiates you from your competitors and makes you better in some way is your unique value proposition.

  It could be anything from quality price, after-sales services, or customer experience.

  After this, all you need to do is write a clear value proposition in a tone and language that urges your customer to take action or grabs their attention.

Value Proposition Canvas

A value proposition canvas is a visual tool used to understand how your product can be placed around your customer’s needs. A value proposition is mainly used when you are planning to launch a new product or update an existing one.

You can create a value proposition canvas for your product in a few simple steps:

• Step 1: Create your customer profile:

  The first step towards creating a proposition canvas is to make a customer profile. In this profile, you’ll focus on all the aspects of your customers’ lives where your product can fit in. It is also a good practice to study how these factors impact their lives and what kind of solution they want.

  For example, if you sell washing powder, you would try to understand what problems your customers face while washing their clothes, what aspects they look for in a washing powder, what price range they prefer, etc.

  You can further divide this step into three segments:

  • Customer Jobs: The task your customer is trying to accomplish with your product or service comes under the customer jobs category. Due to this task, your product holds a purpose or a value in your customers’ lives.

  • Customer Expectations: In this section, you’ll try to explain what your customers expect to get out of your product or service. What problem do they want you to solve, what aspects do they want you to cover, and so on.

  • Customer pain points: The pain points are the challenges your customers go through due to the problem you’re trying to solve with your product. In this segment, you’ll try to understand what parts of your consumers’ lives are impacted by the problem, what is the degree of the impact, and so on.

  This helps you understand the kind of solution they want as well as their consumers’ buying motivations.

• Step 2: Craft a value map for your products and services

  In this step, you’ll describe how your business helps the consumer in 3 steps.

  Which are as follows:

  • Gain creators: These are the aspects of your products/ services that satisfy your customers’ wants and make their lives better in some way.

  • Pain relievers: This segment includes the features of your product/ service that relieve your consumers’ pains described in the first step. Again, describe this point in a way your consumer can easily relate to.

  • Products/ Services: In this segment, you’ll describe all of your major products and services. These should also be the ones that bring the highest value to your customers.

• Step 3: Find out your value proposition-customer fit

  The last step is to combine the findings of the previous two steps and analyze how well they fit each other. This helps you understand how well your solution works for your customers, what changes you can make, and how you can accurately describe your proposition to your customers.

Value Proposition Examples

We all know that a value proposition is much more than a mere statement. Hence, it is good to get at least a little bit of inspiration before getting started.

A few examples of well-written value propositions are as follows:

Zoom’s value proposition enforces and reinforces what the company offers without leaving any room for confusion.

• Trello

  

  • Headline: Trello helps teams move work forward.

  • Sub-Headline: Collaborate, manage projects, and reach new productivity peaks. From high rises to the home office, the way your team works is unique-accomplish it all with Trello.

  • Visual Element: You might have noticed how each element of Trello’s value proposition complements the other.

• Zoom

  

  • Headline: Enabling the Hybrid Workforce

  • Sub-Headline: Explore how the Zoom platform seamlessly brings together remote and in-person teams, for work that goes wherever you do.

  • Visual Element: Zoom’s value proposition enforces and reinforces what the company offers without leaving any room for confusion.

Conclusion

Writing a good value proposition might seem like a tough task in the beginning, but all you need is a good bit of research about your customers’ problems, a clear understanding of your product, and a thorough analysis of how they fit together.

Above all, your value proposition should reflect your dedication to making your customers’ lives a little bit happier or a little bit better.

Whether direct or indirect cash flow method, your cash flow statement may not always represent the information you want to share with your investors and other stakeholders. Still, it is one of the most crucial statements to financial reporting. 

The cash flow statement is underestimated because of the lack of knowledge of the purpose it serves and the cash flow method selected for the same. However, it is a primary piece of the puzzle to gain insight into your company’s liquidity.

And, how do you get the information you need? 

It starts with having the correct procedure to provide the best cash flow statement for your company when you have it available. That’s why you got to choose between direct and indirect cash flow methods. 

In this article, we’ll go through what are direct and indirect cash flow methods and the key differences between the two.

Never take your eyes off the cash flow because it’s the lifeblood of business. - Sir Richard Branson, business magnate, investor, author, and philanthropist.

However, creating a cash flow statement that will appeal to your investors will depend on which cash flow method you select. Let’s deep dive into understanding what each method is and what purpose they serve. 

Direct Cash Flow Method

The direct technique presents operating cash flows as a list of incoming and departing cash flows. The direct method, in essence, subtracts the money you spend from the money you receive.

The direct technique is one of the two methods used to create a cash flow statement for a business. Instead of converting the operational section from accrual to cash accounting, the statement of cash flows under the direct method employs actual cash inflows and outflows from the company’s operations. 

The cash flow direct technique solely measures cash received, which is often from customers and cash payments or outflows, such as to suppliers. Organizations calculate the cash flow by netting the inflows and withdrawals. 

The income statement method is another name for the direct approach.

The following are the three sections of a cash flow statement:

• Operating operations include the selling of goods or services, the purchase of supplies or materials, the payment of business expenses, and the payment of staff salaries.

• Investing operations, such as the purchase or sale of assets and the payment or collection of debts

• Financing activities involving stocks, bonds, or dividends are examples of financing activities.

The cash flow from operating activities is the only section of the statement of cash flows that will change in presentation under the direct and indirect methods. 

• Direct Cash Flow Method Example

  The direct approach records the cash receipts and cash payments made during the financial period. A working example is presented below:

  Cash Flow From Operating Activities:	Amount USD
  Cash received from the customers	57,000
  Wages and salaries paid	(18,000)
  Cash payments made to vendors/suppliers	(22,000)
  Interest income and dividends received	5,000
  Income tax paid	(9,000)
  Interest paid	(3,500)
  Net Cash Flow From Operating Activities	9,500

Indirect Cash Flow Method

The indirect approach displays operating cash flows as a profit-to-cash flow reconciliation, and it signifies that you consider depreciation in your computations.

To calculate cash flow from operating activities using the indirect method, take the company’s net income and add or subtract non-cash items. Business owners use cash flow statements, investors, creditors, and stakeholders to evaluate a company’s performance. 

The indirect way of presenting a company’s cash flow statement is based on net income or loss, with non-cash revenue and expense components added to or deducted from that figure, resulting in cash flow from operational activities. 

The indirect technique displays the cash flow statement as a function of changes into current assets and liabilities.

• Indirect Cash Flow Method Example

  As mentioned earlier, we will start with the net income and reach the cash from the operating activities in this method. Let’s see an example of a cash flow from operating activities using the indirect cash flow method:

  Cash Flow From Operating Activities:	Amount USD
  Net Income/Profit	20,000
  Less: Increase in Accounts Receivables	(2,000)
  Decrease in Tax Payable	(11,000)
  Add: Depreciation	3,500
  Decrease in Inventory	1,500
  Increase in Accounts Payable	900
  Net Cash Flow From Operating Activities	12,900

Direct vs. Indirect Cash Flow: Key Differences

Below are the key differentiating points of preparing a cash flow statement using the direct or indirect method.

• Reporting

  The primary distinction between the direct and indirect cash flow statements is that operating activities generally report cash payments and cash receipts occurring throughout the business in the direct method. 

  In contrast, asset and liability changes in the indirect method are adjusted to net income to derive cash flow from operating activities.

• Consistency

  Many accountants prefer the indirect technique because it is easier to produce the cash flow statement with information from the other two typical financial statements, the income statement and the balance sheet. 

  Because most businesses utilize the accrual method of accounting, the data on the income statement and balance sheet will be consistent with this technique.

• Accuracy

  The indirect approach of preparing a cash flow statement takes a long time and has specific accuracy difficulties because such a statement uses many modifications. 

  The direct technique of generating a cash flow statement, on the other hand, remains the most powerful method of preparing a cash flow statement, and it takes less time to create the statement because of the adjustment and segregation of cash-based transactions from non-cash transactions are absent. 

  Based on this attribute, it generally gives a more realistic picture of the business’s cash flow status than the indirect technique of the cash flow statement.

• Adjustments

  The indirect technique is more complicated than the direct method since it uses net income as the base and makes appropriate cash flow adjustments. 

  One of the modifications is the consideration of non-cash expenses. Depreciation, a non-cash item, is often added back to the net income in the indirect method, followed by additions and deductions resulting from changes in liabilities and assets.

  In contrast, there are no such changes in the direct method in the direct approach. The cash flow from operations is generally prepared by accounting for cash receipts and payments in the direct method. 

  Cash receipts are typically documented as client receipts, whereas organizations record payments to suppliers’ employees and quote payments to cover taxes, interest, and other expenses.

• Clarity 

  The Financial Accounting Standards Board (FASB) advises that organizations utilize the direct method to provide a more accurate picture of cash flows in and out of business. However, if the organization uses the direct method, it is still recommended to reconcile the cash flow statement to the balance sheet.

Conclusion

The corporation can use either a direct method or an indirect cash flow technique for reporting purposes. It depends entirely on the situation and the compliance criteria that the company must achieve in terms of reporting and regulatory standards. The popularity of the indirect way of cash flow generally outnumbers that of the direct cash flow method.

How Can We Help?

Upmetrics can help you create compelling financial statements for your business using an automated software tool that will be faster, easier, and more flexible. 

Request your free demo and start the financial journey of your business with us.

Imagine the following scenario. You have a brilliant product idea, you do a little bit of research, ask a few friends, but when you launch the beta version of the product you don’t get the expected response.

Possibly because it does not have the right product market fit.

But hey, you don’t need to worry. Improving your product-market fit is usually about a few quick fixes, a little bit of more research, and a few tweaks in your target market segmentation.

Moreover, analyzing your product-market fit before launching your product helps you ensure that you don’t waste your efforts with either the wrong product or the wrong market.

But now what is product-market fit? And how would you achieve it? We will discuss all of this and more through this article.

As you start working towards launching your product/ service you might have heard of this term at least once. But what is it exactly?

According to Forbes, if your products get ripped out of your hand by eager customers then you have a good product market fit.

Advantages of Analyzing Product Market Fit

Now that we know what product-market fit is, you might wonder what are the advantages of going through the hassle of surveying people, analyzing their habits, and much more? Why is product market fit important?

Well, the most foundational advantage is that you highly increase your chances of business success.

The most common mistake startups do is to solve a problem no one has.” - Paul Graham

Finding your product market fit helps you avoid this mistake easily.

Apart from that, product market fit has the following advantages:

1. Lesser Customer acquisition cost: As the product is just the right thing for the market it is likely to gain a lot of traction through word of mouth publicity and free media coverage, reducing your promotional and customer acquisition costs to a considerable level.

2. Faster growth: As you have a product-market fit, your product is bound to receive a good response and that is bound to help you grow at a fast rate.

3. Higher customer retention: As your product fits your customers' needs and demands perfectly, you’ll get a higher customer retention rate. Look at it like this, if your customers are already happy with your product, why would they go through the hassle of experimenting or trying to find a new product?

   This eventually helps you lower your customer retention cost and lets you have more revenue to spend on business growth.

4. Optimal Scaling: Scaling after you find the product-market fit is much better and more optimal for your business, as you have lower customer acquisition and retention costs. Again, as your company isn’t losing a huge chunk of revenue on these expenses, your scaling would be optimum and actually profitable for your business.

Now as we know about the Sureshot advantages of product market fit, the next question is, How would you achieve product market fit?

How to Achieve Product Market Fit?

This is probably the single most important question we would like to discuss in this article. And although achieving product-market fit would be different for everyone and would involve a lot of trial and error, there are a few things that can help you along the way.

In the words of an actual customer, “ Build what I do, not what I say.”

Finding product-market fit is all about analyzing and drawing from consumer behaviours, identifying their pain points, and addressing them in the most optimal way possible.

Product-market fit framework can be easily defined through the product-market fit pyramid given below:

1. Identify your target customers: The first step is to identify your target audience. Ask yourself who are you making these products for? Who can find good use out of your products? What is their age, occupation, geographic area, income group, buying behaviours, etc? You can also do so by identifying multiple target segments and zeroing down on the segment closest to your ideal customers through further research.

2. Identify your customers' pain points: Once you’ve identified your target market the next step is to identify what are their problems, how do these problems affect them, and what kind of solution are they looking for? You can also try to find out if solutions for the said problem exist in the market or not, and how your solution can serve your customers better than the existing ones.

   You can do so by carrying out surveys, reading customer reviews on your competitor’s products, carrying out focus groups, and so on.

3. Describe your value proposition: Describe how your product would benefit your customers. Explain in what way it will answer their needs and make their lives easier.

   Here are a few examples of value propositions from popular companies:

   Uber - The smartest way to get around
   Apple iPhone - The experience IS the product

   You can look at many more such examples. For a good value proposition, define your brand’s purpose as clearly as possible and deliver it to your audience in a precise way with little or no room for misconceptions.

4. Define your minimum viable product feature set: Now you’ll define the features of your minimum viable product that can be used to achieve the said value proposition. Describe how the features work clearly and precisely for every stage of your customer’s buying journey.

5. Make your MVP prototype: Now as you have decided upon everything else, now it is time to make your MVP prototype. The prototype is much cheaper than the actual product. It is basically a minimum-cost sample that can give your customers an idea of how your features work.

6. Test your MVP with real customers and get their feedback: The final step to knowing your product-market fit is to test your MVP with real customers and know what they think about it. Prepare a set of diverse questions for your customers to get feedback that is as unbiased as possible.

If you don’t find the right reaction, you should go back to step 2 and analyze how your product can be optimized or changed to serve the market better, what are the loopholes and how you can fix them.

Overall, a product-market fit framework is all about making the product, testing it, analyzing its performance, fixing the loopholes, and trying it again until you are satisfied with the results.

How to Analyze Your Product Market Fit

We’ve discussed the importance of achieving and analyzing product market fit throughout the article. And here are quick steps that can help you analyze product market fit the right way:

1. Measure your product market fit: This approach is one of the simplest ones to analyze your product market fit. You can measure your product-market fit by measuring your customer acquisition rate, retention rate, and the number of referrals you receive.

   Among all of the above, customer retention rate is the most accurate way of measuring your product market fit.

   If you have a 40% customer retention rate then you have a product market fit" - Ash Maurya, the author of the popular business planning book Running Lean

2. Don’t push your features: As we’ve discussed earlier, product market fit is all about how eagerly your customers take your product from you. Hence, there should be a pull, not a push. i.e., Your customer should readily want or ask for the features you are selling them, you shouldn’t be the one forcing the features on them.

   Apart from that. The process is also a lot about taking customer feedback and improving the old features instead of adding a ton of new ones.

3. Prioritize feature backlog: Prioritize feature backlogs, be it for adding new features, improving old ones, or fixing bugs or loopholes. This helps your customer utilize the best version of your product as soon as possible, and reach your product market fit faster.

Conclusion

So, from this article, you can draw out that product market fit is essential. Be it for a startup or a business that is already up and running. In fact, product market fit can become the primary reason for your business’s success.

All you need to do is to find an underserved need, make a product, test it and improve it.

Above all, the primary thing to finding product market fit or success is to go ahead and take action.

The sales team spends 2.5 hours each week of their selling time in estimations and predictions. However, they can typically achieve less than 75% accuracy by an effective sales forecasting technique.

Forecasting sales is an important business task. A business leader needs accurate sales predictions to enable business leaders to make better decisions relating to setting targets, hiring, cash flow, and budgets.

Meanwhile, inaccurate sales forecasts for sales managers bring uncertainty that makes timely detection of problems in the sales funnel impossible.

This article discusses particular methods, examples, and pointers to create a viable sales forecast.

Sales Forecasting Methods

There are several methods for forecasting sales for your company, and a company chooses a method depending on its requirements.

Most organizations simultaneously employ sales forecasting strategies to obtain more projections. It can provide you with both the best-case and worst-case scenarios.

• Length of Sales Cycle Forecasting

  The forecasting approach for the sales cycle length uses data by the time it takes a prospective customer to convert into a paying customer.

  This form of forecasting is objective because it does not rely on the emotions of your sales staff. It is ideal for businesses to track when new customers enter their sales pipeline.

“The most important thing is to forecast where customers are moving, and be in front of them.” - Philip Kotler, an American Author

• Lead-Driven Forecasting

  This algorithm analyzes previous sales data from each lead source to predict the future. You'll need the following measurements: Leads per month for the preceding month. The average sales price varies depending on the source. Divide the total number of leads required in a given period by the average lead value.

  The average sales cycle may vary depending on the lead source. Other business efforts may pact your conversion rates. Modify marketing plans in response to new information or trends. It syncs them to verify your predicted lead volume and conversion rates are correct.

• Opportunity Stage Forecasting

  This sales forecasting models predict the likelihood of an opportunity closing based on the prospect's position in your sales process. In this technique, you anticipate future sales by multiplying the amount of each opportunity by the probability of that opportunity closing.

  Expected Revenue = Deal Amount x Probability to Close

  This method needs a CRM system that automatically assigns win probability for each stage, essential for an accurate forecast.

• Intuitive Forecasting

  The intuitive forecasting method depends on your faith in your prospects' opinions. Your salesman is the ideal person to ask whether the sale will go through or not. If the sales representatives are optimistic, they may make exaggerated predictions, and there is no way to evaluate the statistics.

• Test-Market Analysis Forecasting

  The forecasting method of Test-Market Analysis allows you to roll out your product or service to a specific set of people depending on their demands. You can use the rollout findings to produce a more accurate future market projection.

• Historical Forecasting

  Historical forecasting does not account for dynamic market developments. For example, if your competitors executed a promotional campaign, you might see a drop in sales. Using this strategy, you anticipate the MRR, assuming a 10% annual growth rate.

• Multivariable Analysis Forecasting

  Multivariable analysis forecasting is a fantastic choice if you want the most accurate forecasting method. It considers elements from different sales forecasting methodologies, such as opportunity stage forecasting and individual rep performance.

  Because it requires complex calculations, this strategy may be impractical for small enterprises.

  To bed, the methods of Sales Forecasting, check out the Sales Forecasting examples.

Importance of Sales Forecasting

• Sales forecasting is all about accessing how much time you have left in your budget to spend on new items and services.

• Accurate estimates impart market credibility to publicly traded corporations.

• When sales leaders rely on forecasts, privately held enterprises gain confidence in their operations.

• Sales forecasting identifies potential issues and allows you to avoid or mitigate them.

• You can research and discover that there aren't enough leads created for the sales team to convert.

• Sales predictions can also assist in hiring and resource/inventory management decisions.

• Assume your sales estimate predicts an increase in demand.

Sales Forecasting methods Examples

• Ex. 1) Using Current Funnel

  Assume you have three open positions this month: One with a brief phone call with an expected value of $2,000. Another believes it is worth $3,000 as he received a thorough demo, while another had an offer with a $2,400 estimated value.

  The following possibilities could be there: "Phone Call" marks a 30% likelihood of closure. "Demo" may close at 40% possibility while "Offer" has a 70% likelihood of closing.

  To get a total sales prediction, you need to multiply the probabilities by the predicted value of the contract and add them all up to get $ 3,480, as shown in the following example:

• Ex. 2) Using Lead Scores and Multiple Variables

  You can use a table to forecast your sales using lead scores and multiple variables. Use average opportunity sizes to calculate the anticipated value of any specific chance:

  Divide your leads into three groups of varying qualities: A, B, and C. These variables impact the chance of a closing deal.

  Assume that the organizations with 50 or fewer employees close at a little lower rate, whereas companies with employees more than that have more probabilities of closing the deal.

  Lead Score	Close Rate	Close Rate	Expected value per Opportunity created (average sales price = $ 8,000 )
  	0-50	51-100	Company size' 0-50 employees	Company size' 51-100 employees
  A	25%	50%	$ 2,000	$ 4,000
  B	12.50%	25%	$ 1,000	$ 2,000
  C	2.50%	3.80%	$ 200	$ 300

• Ex. 3) Using Historical Data

  Assume you had $300,000 revenue last month and that your sales revenue has risen at a rate of 12% per month over the previous year. Your monthly churn was approximately 1%.

  Your projected revenue for the following month will be:

  ($300,000 * 1.12) – ($300,000 * .01) = $333,000

  It is derived by multiplying the past month’s income by the projected growth, and from the resultant amount, you need to deduct the churn.

Factors Influencing Sales Forecasting

• Economic conditions affect every firm and market. When the economy is in a slump, people/businesses lose money and are less likely to buy, whereas people are more likely to invest and buy when the economy is booming.

• Policy changes or implementing new laws/regulations can benefit or hinder your firm. You must consider these when forecasting your sales for the coming month.

• Changes in your product might have a significant impact on your sales estimate.

• Factors such as new technology advancements, design, competitors running promotional efforts, or new businesses entering the fray might modify and affect the industry's market share - which will factor into your sales estimates.

4 Tips That Will Help You Forecast Your Sales Effectively

Improving the accuracy and efficiency of your sales projections and forecast technique is dependent on several elements, including good organizational coordination, automation, reliable data, and an analytics-based process.

1. Review Historical Data and Analyze Future Trends

   To forecast your sales, you will need to understand the historical details about similar products or services you are selling had. You will also need to be careful about the future trends to prepare from now itself.

   The product you are selling has a raw material component that will undergo a scarcity in the future; you will need to have a backup plan.

2. Select Sales Forecasting Method

   You must select the method that best depicts your product or service to maximize your sales prediction. While predicting sales may look easy, selecting methods is more complex.

3. Understand Your Product or Service

   If you are selling products or services of different categories, you need to identify them to predict their numbers better. If you include a product you no longer sell, your sales prediction may lead to erroneous results.

4. Multiply Sales Price and Quantities

   Your sales price is fixed, and pre-determined. Hence, you need to estimate the number of units you will sell through the year. The prediction of the sales volume and its multiplication with the sales price will give you the sales prediction.

Final Words

A Sales forecaster must combine approaches with the managers' knowledge and experience. The need is not for improved forecasting methodologies but better utilization of the available tools.

While applying any forecasting technique takes patience, at Upmetrics, we help you optimize your sales forecasting process. Request your free demo.

Working capital (WC) is derived by deducting the company's current assets from current liabilities. Although a large amount of working capital helps the firm's smooth functioning, excess WC can indicate inefficient management.

This blog explains what is working capital, the components of working capital, and how to calculate it.

Components of Working Capital

The components of working capital include accounts receivables, cash, and bank balance, inventories, and accounts payables. Current assets and current liabilities are the two most crucial components of a company's WC.

1. Current Assets

   

   Current assets are more liquid than fixed assets because they can be converted into cash quickly within 12 months. Examples of current assets include cash and cash equivalents, inventory, accounts receivables, etc.  

   Also, read Fixed Assets Vs. Current Assets to understand more about the current assets and how it differentiates from the fixed assets.

2. Accounts Receivables

   

   An excellent receivables management policy ensures prompt collection and avoids bad debts. Accounts receivables account for a large portion of the current asset and, as a result, working capital. A prolonged accounts receivable period delays cash collection.

3. Cash and Bank Balance

   

   Proper cash management empowers the company to manage its operational process. The business entity's efficiency depends on its free cash flow (FCFF) generation. Better cash management allows businesses to obtain trade discounts and enhance the cash conversion cycle.

4. Inventory

   

   The company's success measure is its quick sales and inventory replacement. The low inventory indicates that the firm is at risk of losing revenue, and excessively high inventory levels indicate the company's waste of operating capital.

5. Current Liabilities

   

   Current liabilities refer to the company’s short-term obligations due in less than 12 months. Accounts payable, short-term debt, current duties, and taxes are examples of current liabilities. 

   Below is the most used current liabilities component to calculate the working capital. 

6. Accounts Payable

   

   Companies strive to preserve optimal cash flows by balancing payments and receivables, and companies may postpone payments for as long as it is reasonable to safeguard good credit ratings. In an ideal world, a company's average time to collect receivables is far less than its average time to manage payables.

The first and foremost requirement of working capital, therefore, is to acquire and maintain inventories." - Dr Anil Lamba, best-selling author, and financial literacy activist.

How to Calculate Working Capital?

The amount of accessible capital that a firm may utilize for day-to-day operations is the working capital. It will tell you how liquid are your current assets and how efficiently your operations work.

Cash, marketable securities, and inventory are examples of current assets; accounts payable, accrued obligations, and short-term debt are current liabilities.

You can calculate NWC with the help of the following formula:

It gives you an idea of how liquid your current assets are to cover the short-term obligations due within 12 months. If it is positive, it generally means you have sufficient liquid funds to meet current liabilities.

But, if the net-working capital is negative, it shows your inefficiency to cover the short-term liabilities. Moreover, excessive working capital is difficult to dispose of, predominantly if it comprises a significant amount of obsolete inventory.

• Calculating Current Ratio

  Working capital can also be determined by calculating the company's current ratio. The current ratio divides the current assets with the current liabilities. The position of companies with a high current ratio is better to pay off their current liabilities than companies with a low current ratio.

  The below formula is provided to calculate the current ratio:

  Current Ratio = Current Assets / Current Liabilities

  • Example of Working Capital Calculation

    ABC Co Ltd. reported $63.45 B in current assets for the fiscal year ending December 31, 2021. Current assets comprise holdings for sale, cash and cash equivalents, prepaid costs, short-term investments, inventory, marketable securities, and accounts receivable.

    ABC Co Ltd. also reported $19.72 B in current liabilities for the fiscal year ended December 2021. Liabilities to sell, Accounts payable, accrued income taxes, accrued costs, current maturities of long-term debt, and loans and notes payable constitute the company's current liabilities.

    The current ratio of the company will be 3.22 ($63.45 / $19.72). A higher current ratio is considered good. The current ratio of more than 1 indicates that the company has enough current assets to pay its debt.

• Working Capital Outcomes - Positive or Negative

  WC can be positive (current assets exceed current liabilities) or neutral (current assets equal current liabilities) and negative (current liabilities exceed current assets). Positive working capital means more money coming in and less money going out.

  The company may have negative working capital due to the following reasons:

  • A firm makes significant one-time cash payments
  • Increasing accounts payable owing to necessary credit extension
  • Reduction in receivables

  The Outcome of a Positive Working Capital

  • The business has sufficient finances to pursue new prospects
  • The bank is happy to provide loans to the company
  • Improved Customer satisfaction
  • On-time delivery

  The Outcome of a Negative Working Capital

  • Several loan denials
  • Reckless expenditure
  • Failure to make payments
  • Bankruptcy

  Nevertheless, positive WC is not always advantageous for the business. Negative WC can be generalized as upcoming doom.

  Should You Be Worried about Negative Working Capital?

  Nevertheless, a company's negative WC might be favourable depending on the type of business. Negative WC might also indicate that the company's working cycle is short and that its return on investment on finished goods converts to cash before the supplier's payment due dates.

  For instance, the high inventory turnover rates of fast-food franchises and supermarket stores produce revenue quickly. But heavy equipment and industrial manufacturers have difficulty raising funds rapidly, which could be the reason for deficits.

Importance of the Working Capital in Business

• Working capital to a business is what oil is to machinery, and it is essential for the company's daily work. A well-run business should have enough WC on hand to cover its expenses for a year.

• By looking at a company's working capital, you may determine if it can develop organically or seek extra funding from banks or investors.

• One of the most significant benefits of examining a company's working capital condition is predicting potential financial problems. If a company with billions of dollars in fixed assets can't pay its payments when they're due, it may soon find itself in bankruptcy court.

• In the best of conditions, a lack of WC may put a firm under a financial strain, causing it to borrow more and make more late payments to creditors and vendors.

• All of this might result in a worse corporate credit rating and less investor interest in the long run. As the cost of capital rises, a lower credit rating means banks and the bond market will demand higher interest rates, lowering revenue time.

• WC ensures that a firm can pay its employees and suppliers. It may also support corporate expansion without having to take on debt. Working capital might make it simpler for a firm to qualify for loans or other credit types if it needs to borrow money.

Conclusion

The business must not confuse its short-term working capital requirements with longer-term, permanent requirements. For instance, the company cannot use it to buy machinery or land or hire permanent personnel, and these are expensive and need a variety of financing options.

If a company has to pay project-related expenditures or temporarily reduce revenues, it may enhance its working capital. Adding to current assets or lowering current liabilities are two strategies for closing the gap, and taking on long-term debt and selling liquid assets for cash are two choices.

At Upmetrics, we have the solutions to help you with efficient working capital management. With proper resource allocation and planning, we can work together to end your working capital woes.

If you’re new to the balance sheet, comprehending each of its components might seem like a daunting task. While there are current assets and fixed assets on the balance sheet, the question may arise why current assets are called current and why fixed assets are called fixed or non-current?

The primary difference between the two is their capacity to convert into cash quickly.

But the distinction does not end there. This blog will explain the two asset categories, in brief, to show their relevance on the balance sheet, along with an explanation on the depreciation of fixed assets while also highlighting the fixed assets vs. current assets key differences.

The company’s investments in other firms to develop over time are fixed assets. The company organizes its balance sheet as per its accounting policy which is why there is no one-size-fits-all solution, and thus, it differs from one organization to the next.

Which Assets are the Fixed Assets?

Let’s understand what is included in the fixed assets section of the balance sheet.

• Plant and Machinery, which is a high-value capital item
• Vehicles
• Computer and Software
• Furniture and Fittings
• Land and Buildings, where there is no depreciation charged on land

Fixed Assets on the Balance Sheet

Property, plant, and equipment (PPE) holdings appear on the balance sheet on the assets side or under the non-current assets heading. When the firm makes the initial purchase and sells or depreciates the asset, these tangible assets appear in the cash flow statements. Non-current assets, including fixed assets, are defined in a financial statement as those with advantages projected to endure more than one year from the reporting date.

"The net amount for property, plant, and equipment is achieved after subtracting accumulated depreciation from the fixed assets’ original cost." - Mariusz Skonieczny, founder of Classic Value Investors

Depreciation on the Fixed Assets

Things also age, wear out, or become obsolete. When a company purchases and installs a fixed asset, the countdown to its useful life begins. The depreciation is referred to the wear out of the asset due to its usage over a period.

According to the US GAAP, there are four ways to depreciate an asset, of which straight line and declining balance methods are the most popular ones. Let’s take an example to calculate depreciation under both methods.

A company bought machinery costing $15,000 in January 2020. The machine is expected to work for ten years with a scrap value of $1,000 at the end of 10 years.

Under the straight-line method of depreciation, the depreciation amount is calculated as follows:

Hence, the depreciation in the above example will be $1,400 (15000 - 1000 / 10 years) as per the straight-line method. Moreover, depreciation of $1,400 will be applied for ten years.

Under the declining balance method, the depreciation percentage is calculated to apply to the written-down value each year.

The depreciation percentage in the above example comes to 9.33% ($1400/$15000 *100). Hence, we will apply 9.33% each year on the written-down value of the asset.

For example, in the second year 9.33% is applied to$13,600 ($15,000 - $1,400).

Which Assets are the Current Assets?

• Let’s understand what is included in the current assets section of the balance sheet

• Cash and Cash Equivalents include cash at the bank and cash on hand

• Inventory, which is the closing balance of the inventory at the end of the financial year

• Accounts Receivables, which are the debtors or customers of the company

• Prepaid Expenses, which are the expenses paid in advance

• Short-term Investments, that have a maturity period of 12 months or less

Current Assets on the Balance Sheet

Managers, analysts, and investors will examine a company’s current assets situation, particularly in comparison to current liabilities, to see if it has adequate liquidity to satisfy short-term commitments like payroll and bills. The examples of liquidity ratios are quick and current ratios.

Fixed Assets Vs. Current Assets - What Are the Differences?

Now, let us understand why fixed assets are called fixed or non-current and why current assets are called current, and the critical differences between them.

• Meaning

  The current assets are the ones that you can convert into cash more quickly than the fixed assets. Fixed assets are long-term fixed assets (PP&E) with a useful life of more significant than a year.

• Period

  Fixed assets have a useful life of more than one year, and they are generally long-term assets.

  On the other hand, current assets have a shorter liquidity period of less than one year. For example, inventories are usually sold within a year, and hence, they come under the heading current assets.

• Depreciation

  Fixed assets tend to depreciate over time, and there are specific methods to calculate depreciation on fixed assets as per the US GAAP. Whereas current assets do not depreciate or reduce in value. However, accounts receivables are adjusted for any doubtful recovery.

• Liquidity

  Noncurrent assets (fixed assets) are challenging to convert into cash quickly enough to cover short-term operating needs or investments. Current assets are more liquid and can be converted into cash within one year.

• Revaluation Reserve

  In the case of fixed assets, the business creates a revaluation reserve when the asset value increases. But, there is no formation of such a reserve in the case of a current asset, which is the primary distinction between a fixed asset and a current asset.

• Finance

  Fixed assets are typically financed by a company’s long-term funds or debts, whereas short-term funds or debts are utilized to finance the company’s current assets.

• Pledge

  Fixed assets help provide the pledge as security when a company plans to obtain any financial assistance from banks or otherwise. However, you cannot pledge current assets against any loan.

• Sale of an Asset

  The sale of fixed assets results in a capital profit if sold at a profit and capital loss if sold at a loss. Such a profit or loss is reported under the extraordinary items on a company’s profit and loss statement.

  But when current assets are sold, the result is revenue, profit, or loss and reported under other income or expense headings depending on whether profit or loss is generated.

Capital investment in fixed assets that produce real goods is the actual driver of long-term economic growth, and until slick financiers hijacked the country with 'new economy' mumbo-jumbo based on computer models and hype, most Americans understood this. - Richard Karn

The Bottom Line

To sum up, it is not about the type of asset acquired, but rather the purpose of acquisition, i.e., if the company holds the asset for resale, it is a current asset. In contrast, if the asset is acquired to assist the firm in operations for an extended period, it is a fixed asset.

Request a free demo at Upmetrics and enter only the bare minimum of data so we can calculate it for you. We offer you accounting software that creates accurate financial statements.

Small company owners have a plethora of opportunities to pursue; all they want is a profitable small business idea to get things going.

Before putting in your efforts, resources, and time in your small business idea, you need to identify your interest or passion and then get into it.

Are you still confused and don’t know where to start from and which is the right small business idea for you? Don’t worry, we have got you covered!

To ease things down a bit for you, we’ve put up a list of the 20 best small business ideas. All the ideas are quite a in trend right now. Best of all, all the ideas will also not require much of your investment.

All you need is a bit of research and a lot of dedication to pull things off! So, without any further ado, let’s get started!

Top Profitable Small Business Ideas You Should Check Out!

1. E-commerce shop/marketplace

It's no surprise that eCommerce is on the upswing when the world is self-isolating at home and consciously avoids visiting stores and shopping malls.

So, creating an outstanding eCommerce store is the first and most profitable small business concept.

An eCommerce site can make it financially practical for you to follow your passion, whether it's selling all those paintings you've been doing or gorgeous scented candles.

2 Personal training

Personal training has long been a popular small profitable business idea, and the outbreak hasn't changed that.

Working for a large corporate gym or renting a large location to turn your passion for fitness into a business isn't necessary.

You can work as a personal trainer by providing one-on-one sessions in your clients' homes, through online seminars, or even in public parks. Making exercise more accessible to your customers could be the key to helping you grow your business.

3. Career coaching

A career counselor is yet another profitable small business idea if you have in managing others' careers and professions.

Many people require job or professional assistance from time to time — and finding the proper mentor may be extremely beneficial.

People are understandably unwilling to leave their comfort zones and embark on a new adventure, which is something a career advisor can assist with. This will make their career & yours as well.

4. Business consulting

If you've worked in the business sector for a long time and are well-versed in business knowledge, an independent business consultant may be the right career for you!

You can get compensated to talk at industry events, serve on a panel of advisers for a company, or offer your experience to define the plan of an existing company.

Working as a freelance business consultant is a terrific way to earn a substantial income whilst functioning on your terms.

5. Food truck

People who enjoy cooking or experimenting with cooking often fantasize about opening their own restaurant. However, not everyone can finance such a substantial investment.

Don't be discouraged, though. If you're short on cash, starting a food truck business could be one of the best low-cost business ideas.

All you need to do is put down a deposit on a food truck and start cooking wonderful food to skyrocket your business.

6. Dropshipping

Dropshipping is an extremely popular and lucrative small business concept. In dropshipping, you sell products but do not manufacture, store, or ship them.

The following are the stages to starting a dropshipping business:

• Find any eCommerce vendor and partner up with them.
• Building an eCommerce website or even a Facebook or Instagram profile would work.
• Begin displaying your items from these suppliers on what you wish to sell.
• Make use of a variety of marketing platforms to promote your website.
• Acquire orders.
• Purchase from the supplier and request them to deliver the product to the customer's location.

7. Baby Sitting

This is another excellent small business concept through which you may make a lot of money. Because of the surge in the number of working couples, this idea is in trend right now.

All you really need are a few toys, beds, and mattresses to get started. Also, add some disposable diapers, antibacterial creams, and a first-aid kit to avoid any problems after hand.

However, be sure to follow your city's and state's registration, licensing, insurance, and inspection regulations.

8. Pet care

Did you know that 68 percent of families in the United States have at least one pet?

People spend a lot of money on their pet grooming, daycare, and, among other things. Animal lovers undoubtedly can't think of any better business idea than spending the entire day with the animals.

You could be a dog walker, a cat sitter, a chicken caretaker, a horse feeder, and so forth to start & scale this small business idea.

9. Accounting & bookkeeping services

Business owners may not have the time or resources to establish and maintain their accounting systems.

So, if you have the expertise to start your own accounting and bookkeeping firm, it is one of the finest and most profitable small business ideas for you.

You'll handle bills and payroll, produce expense reports, and create balance sheets and other accounting records as a bookkeeper.

10. Cleaning services

The increased care about health in the home and hygiene in newly reopened offices is in high demand and will attract a large number of customers.

To increase your earnings, you can couple it with a variety of services such as disinfection, dusting, waxing, vacuuming, and so on.

You could start a cleaning service on a budget if you have a strong work ethic and are prepared to get your hands dirty. Alternatively, if you want to grow your business, recruit a few workers or contractors.

11. Teaching

Another most successful small business idea to start is tutoring kids in your region or even from anywhere in the world (via online classes). It is a low-cost business idea as you only need knowledge and enthusiasm to get started!

You can inform your neighbors, relatives, friends and even market it online before beginning the tuition. Start tutoring in any one subject with which you are skilled enough, or you can even cover all the subjects.

12. Landscaping services

As per the 2020 report of US landscaping services, this industry is constantly growing. Grooming, tree trimming, tree removal, and seasonal decorations have become necessities now.

A landscaping business might be profitable if you have the know-how of this work and acquire the right equipment to do it.

Tree trimming and removal companies work with a variety of clientele, including homeowners, commercial clients, and government agencies. You'll mow lawns, plant flowers, and even create sophisticated landscape designs for houses and businesses.

13. Vacation rentals

Airbnb and VRBO have made it much easier than ever to make money from your idle vacation home—or even your spare bedroom.

Furthermore, being an Airbnb host is not difficult, and the need for these rentals has only grown exponentially in recent years. As a result, if you live in a popular tourist site, you may easily make money by renting out a room in your home for visitors.

After you've started making money, you can grow by acquiring more properties and renting them out.

14. Customized printing

Print-on-demand is one of the simplest ways to earn money online. It is like drop shipping in which the supplier prints your designs on the products you select before delivering them to your consumers.

Customers nowadays adore personalized products. You can easily sell a wide range of things, including apparel, accessories, homeware, jewelry, and more.

15. Paid reviews

Startups, businesses, and individuals are frequently on the lookout for people who can write product or service reviews in order to convince customers to buy.

If you enjoy writing and are seeking small profitable business ideas, this could be a good & profitable idea. You can start by creating an account on a freelancing website or directly contacting companies.

You can also publish an article on their products or services if you have your own website.

16. Makeup Artist

A make-up artist is yet another simple and among the best profitable small business ideas.

This business offers considerable freedom and has the potential to add to your bank balance. This might be the right career for you if you know how to work wonders with creams, lipsticks, and shadows.

Before opening a physical salon, start by working as a trained professional for an on-demand beauty application or as a door-to-door freelancer make-up artist.

17. Movers

Whether you have to shift your home or office, it entails a wide range of tasks and is quite difficult for homeowners or company owners. To avoid this hassle & reduce the time required, individuals are hiring movers and getting things done! It is a sucessful small business idea that you can explore.

So, does this sound like you? If yes, then start a small moving company and get into action.

18. Thrifting

Thrifting and upselling items have become the new normal, and consumers seem to be really in thrifted items. So, why not turn it into a profitable small business idea?

If you have a knack for recognizing jewels in the trash, go to your local store, select some clothes or other accessories, set up an eBay or Instagram account, and start selling.

You can even ask people to sell their goods in your store and you can earn commission out of it.

19. Tax consulting

Corporate taxes could be one of the most difficult aspects of running a company and business owners don’t want to get into this! So, if you have expertise with all tax-related things, you can start with this most profitable small business idea.

Furthermore, many firms will require tax advice all year, which means your skills will be in high demand during tax season and even beyond.

20. Handyman services

Handyman work is also a wonderful way to get started because homeowners and business owners frequently want their services.

As a handyman, you have two options: handle a wide range of repairs or specialize in certain areas, such as plumbing, electrical, locksmithing, home security installation, or HVAC maintenance. It all relies on your set of skills, employment experience, and specific licensing.

Find the Best & Profitable Small Business Ideas!

So, here is a wrap for the 20 most profitable small business ideas. And we hope this guide has provided you with useful information, tips, and ideas for starting a small business.

Also, if you are starting a business, make absolutely sure you tackle a particular problem for a particular audience. Among all the hassle & getting things in place, don’t forget to have fun while doing business.

If you are looking for some amazing attractive small business templates, have a look at some free ones available.

The financial ratio analysis is a great tool you can use to analyze the financial performance of your business as it sets the correlation between two or more components of your financial statement. It provides you with an insight into the company’s liquidity, profitability, and operational efficiency.

This blog aims to explain what is ratio analysis, its interpretation, formula, and uses of ratio analysis.

What is Financial Ratio Analysis?

The finance managers gather all information from the company's financial statements to statistically conduct a Financial ratio analysis. They extract all numerical values from the company's financial statistics, market surveys, and economic progress to ascertain two critical attributes to operate a business:

1. The Company's Performance

• The accounting or finance department scrutinizes the company's financial record to analyze the company's performance over a fixed timeframe. 

• The uses of ratio analysis are that its comparison with the concern's past financial records detects its monetary value drifts.

2. Comparison with its Competitor's Performance

• Financial ratio analysis reports the company's standing against its competitors. 

• Information about the competitor's performance is critical for the business.

• Such a comparison indicates the company's position in the market. 

• It guides the business on what it should do to continue to perform well in the market.

• Small businesses can make the most out of the financial ratios to track their financial performance.

"One can say that figures lie. But figures, when used in financial arguments, seem to have the bad habit of expressing a small part of the truth forcibly." - American Stock Broker and Author Fred Schwed

Types of the Financial Ratios

There are many kinds of financial ratios depending on the data sets that financial ratios provide. In this article, to facilitate a better understanding of the topic, the financial ratios are classified into five silos as follows:

1. Liquidity Ratios

These financial metrics take the companies' current liquid or quick asset holding into account to ascertain its ability (liquidity) to repay its short and long-term debts as they fall due and its margin of safety. It indicates whether the business can fulfill its current debt obligations with the asset it holds or if it needs to raise external credit to pay off its liabilities. 

• Current Ratio

  It is a ratio that calculates the liquidity of your business to understand the capacity to meet short-term obligations. 

  A current ratio below 1 indicates poor liquidity of the business, and if it is more than 1.5 it is considered a good current ratio.

• Acid-Test Ratio/Quick Ratio

  The financial analyst considers the quick assets such as cash, marketable securities, or cash receivables to derive the acid-test ratio. Less liquid current assets like prepaid cash expenses or inventory are removed.

  The Quick Ratio of 1 or more is considered good for business but if it falls below 1, it shows the business may struggle to meet higher current obligations against its lower liquid assets. 

• Cash Ratio

  The cash ratio ascertains the liquidity of your business if you meet your short-term obligations by using only cash and cash equivalents and no other current assets. 

  There isn’t any precise benchmark for a cash ratio as it follows a conservative approach of using cash and equivalents only to repay its short-term debt and other current obligations. 

  So, for example, if your business has a cash ratio of less than 1, it does not mean your company is inefficient in meeting current obligations, you will still have other current assets such as inventory, prepayments, accounts receivables to meet your current liabilities. 

• Operating Cash Flow ratio

  This ratio is used to understand how liquid are your operations to cover the near-term obligations. It uses the cash generated from the operating activities to understand whether it is sufficient to meet the obligations occurring during the next 12 months.

2. Leverage or Solvency Ratios

The Leverage financial ratios compare the company's debt with its assets to know if the company is financially strong to carry on trade for the long term. For this purpose, the elements to consider are the long-term debt and interest thereof against the long-term assets, like equity and earnings. 

• Debt Ratio

  The debt ratio measures how much portion of the total assets are financed by the debt. Debt ratios mostly change from company-to-company such as a capital-intensive company may represent a higher debt ratio. 

  However, a higher debt ratio is unfavorable to your business as it shows that majority of your assets are financed by the debt. 

• Debt to Equity Ratio

  The debt to equity calculates how much debt the company is using to grow A higher debt to equity ratio is not favorable for a business, for it indicates the possibility of default. The debt to equity ratio predicts how the equity capital will cover liabilities at the time of its liquidation.

• Interest Coverage Ratio

  The interest coverage ratio indicates the margin of safety for a specific period. It is the number of times a company can pay interest on its debts with its current earnings. It would help if you had a high ratio of 1.5 or more to ensure that the company will have no issues paying interest on their debts.

  The financial metric uses the company's earnings before interest and taxes for calculation.

• Debt-Service Coverage Ratio (DSCR)

  The DSCR shows the financial stamina in closing its debts on time, and a high ratio indicates that it will not default in such payments. It means the business has earned sufficient income to cover the debt obligations that are due within 12 months. 

  Where the net operating income is derived by deducting certain operating expenses from the operating revenue of the business, the current liabilities will also include the current portion of the long-term debt (e,.g., interest payable for a long-term loan within 12 months).

3. Profitability Ratios

The Profitability Ratio is a metric to indicate the capacity of the company to earn profits against the revenue.

• Gross Margin Ratio

  These ratios show the company's gross profits against its net sales, and it is the earning after deducting the merchandise costs. 

  A higher gross profit ratio represents that the company’s operations are profitable and your business is efficiently using its resources.

• The Operating Margin Ratio

  The ratio measures the operating income of a business against its net sales, and it is an excellent indicator of the company's operational efficiency. 

  When this ratio is high, it represents that the company is stable and capable of covering its expenses from its primary operations.

• Return on Assets (ROA)

  ROA measures the profitability of your business against the total assets the capital that you invested in the company assets is generating desired profits for your business. A lower ROA shows your investment in the assets is not profitable enough. 

• Return on Equity (ROE)

  The ROE measures the return percentage on the amount invested in the business. It indicates how efficiently a company is making profits using the investors’ money. 

4. Efficiency Ratios

These ratios rate the company's efficiency in using its assets and resources to increase returns from sales.

• Asset Turnover Ratio

  It measures how effective your business is in utilizing its assets to increase sales. A company that uses its resources wisely can effectively grow its sales, and the asset turnover ratio is a measurement to indicate that effectiveness. 

  A low asset turnover ratio is unfavorable as it shows you did not efficiently use your assets to produce revenue. 

• Inventory Turnover Ratio

  This ratio indicates the number of times the company uses, sells, or replaces its inventory in a specific timeframe. For example, if an inventory turnover ratio is 10, it means the company can sell its inventory ten times in a given period. 

  The faster the inventory is sold, the more efficient company’s sales and operations are. A high inventory turnover ratio is favorable, while a low ratio indicates its poor performance in selling its inventory. 

• Accounts Receivable Turnover Ratio

  These ratios show how quickly the company's customers pay in a specific period. 

• Days Inventory Outstanding (DIO) Ratio

  DIO refers to the number of days the inventory of your business requires to be converted into cash. The inventory turnover ratio tells you frequently your inventory gets converted into cash, while the DIO suggested within how many days it converts into cash. 

  A lower DIO is better for your small business as it represents you are efficiently selling your inventories without keeping them longer in the warehouse. 

5. Market Prospect Ratios

These ratios are of immense value to investors to judge the future market rates of stocks and shares depending on their dividend measurements and current earnings.

• Price-Earning Ratio

  It provides insights to the investors on the company’s share price as against its earnings. In simple terms, the P/E Ratio or the Price Multiple shows how much an investor would be willing to pay per share considering the company’s earning per dollar.  

  Hence, if your business has a higher P/E ratio, the investors will be ready to pay more amount for the share price of your company because they expect it to grow in the future.

• Price to Cash Flow (P/CF) Ratio

  The price to cash flow ratio is a measure of your company’s current share price to its operating cash flow that indicates the value of your share related to your operating cash flow.

  Where the market capitalization is derived by multiplying the number of outstanding shares with the share price. 

  A low P/CF ratio represents the stock's undervaluation; however, in the early stage of your business startup, you may have a higher P/CF ratio due to lower cash generation and future growth prospects, you may have a higher P/CF ratio.

• Market to Book Ratio

  Calculates your company’s current market value to its book value. It is mainly used for insurance, banking, real estate, and investment trust companies' valuations. 

  A higher market-to-book ratio indicates that your company's stocks have outperformed, while a lower ratio represents undervaluation. 

Uses of Ratio Analysis

• Ratio analysis interests many as it reveals whether the financial status is financially sound, weak, or questionable, and it is a number one decision-aiding tool.

• It helps the managerial level make the correct decisions; predict, plan, communicate and validate the financial statements while also coordinating and effectively controlling the business.

• The investors and creditors analyze the ratios to measure the financial health of your business and how efficiently you are improving your business.

• Investors and shareholders choose the company only if they have favorable ratios.

• The favorable ratios encourage creditors to offer more extended credit periods to the business.

• Employees eagerly watch ratios to know if the company is doing well with the hope of earning higher salaries.    

• The Government assesses the overall strength of the industry through financial ratio analysis.

• Significant variations in ratios help auditors make the necessary inquiries for tax computations.

Conclusion

Financial Ratio Analysis is the technique of analyzing and interpreting financial statements, and it is essential for making the right management decisions. It is not the ultimate result but a means to understand the financial status by recognizing its weaknesses and strength. 

Request your free demo at Upmetrics to input only the minimum elements so that we can compute it for you. We offer you accounting software that creates accurate financial statements and automatically calculates ratios to reveal whether your company is financially strong, weak, doubtful, or poor.

How to Start a Boutique Business

The next step for your fashion and design inclinations with clothing is plunging into a boutique business of your own. Before the era of ready-made clothes, boutique businesses were, in fact, quite the norm for any kind of clothes shopping.

While different brand outlets and ready-to-wear clothing manufacturing have made boutiques less popular for regular wear, boutiques have a newfound significance for clothing of a specific fit!

Thus, boutique shopping has become synonymous with style and fit now rather than just plain old clothing. Some boutique businesses also present a combination of both pre-made and to-be tailored clothing. This helps customers get an idea of styling options available, as well as get the fit they desire.

A boutique business is no longer one with all the age-old standard elements. In fact, there are many reasons why the boutique model is revolutionizing to fit modern-day requirements.

Things to Consider Before Starting a Boutique Business

If you’re thinking about how to start a boutique business or starting a clothing line of your own, there are many things you need to consider and get in the works before your official launch. Here are some things to think about before getting started:

• Your Unique Boutique Offerings

  

  The first thing to think about when it comes to your boutique business is how it is going to stand out amidst the rest. For modern-day boutiques or clothing line businesses, the sky is the limit.

  You can find your USP or what you want to be known for by revisiting why you want to start your business in the first place.

  Your boutique can be the go-to for fitted creations from popular references or perhaps known for its own unique design and style offerings. You can also cater to specific styles and occasions-based dressing.

  Formals for events, casual and new styles, wedding dresses and suits - there are many niches for which a wide clientele can be built. As a first step, figure out your unique offerings!

• Boutique Type and Buyer Persona

  

  With a focal idea in mind, you will then have to understand the type of boutique business you want. While many clothing lines and businesses cater to different buyers, a niche boutique business can do really well with a well-defined buyer’s persona.

  A business tailored for women’s dresses or men’s suits can have a niche buyer group on its own.

  Especially with growing competition in the market, sticking to a niche might do more good than you’d think.

  You can either choose to operate a regular buyer boutique or operate a sell retail-based business.

  A consignment-based venture can also be fruitful if you’re sourcing from an inventory-centered store. With a healthy budget and an adept team, you can also run a franchise boutique that can have a wider reach right off the bat!

• A Boutique Business Plan

  Once your vision is clear, you now proceed to draft a structured business plan. Why a business plan? There are many specifics within the planning of your business that are much more than “this or that” questions.

  From employees to material sourcing, all aspects need to be decided way before you’d get to take your first order.

  A good business plan includes a blueprint of each aspect from initial funding, material selection and sourcing, profit goals, employee management, design aspects, retail store aspects, prompt marketing, and much more.

  You can refer to this - Boutique Business Plan Template to start out with proper business planning!

• → Download Now: Boutique Business Plan

  Store Location and Sectioned Layout

  

  This is something you can plan in detail within your Boutique business plan. Especially if you’re planning to operate as an all-in-one design and retail store, the location and layout of your store are of supreme importance.

  The location of the store must be more easily accessible than a workshop, or independent production location should be. Your boutique store, in all probability, would be a hub for client entertaining, portfolio presentation, design and stitching, and sales all at once.

  The layout of the store should be appropriately sectioned to ensure a proper workflow from entertaining the client, showing design samples, selecting fabric, to trying on ready-to-wear pieces.

  A waiting area for the next customers and a soothing ambiance will make your customers’ shopping experience a great one!

• Funding, Pricing, and Legal Aspects

  Even before you lay the first founding block for your business, how you are planning to fund your business and what profits you expect in the first quarter are to be considered. A business can stay afloat in the long term only if it is profitable.

  Funding options can include personal investment, partnerships, loans, or getting investors on board. You also need to decide on pricing aspects for your products and services while drafting your business plan.

  If you have a rough sketch of your product catalog ready, you can gauge the same on the basis of competitor's data and robust market analysis. Alongside these aspects, you need to take care of the basic legalities of your business.

  This includes registering the business under the right category, and ensuring all locality permits and legal operative permissions as a fully functioning business.

• → Download Now: Starting A Business WorkBook

  Design, Operations, and Marketing Teams

  With all the groundwork laid out for your venture, you will need to demarcate duties and operations depending on the scale of your business. Many boutique business owners operate as stand-alone designers and sellers.

  For an intermediate-scale business, it is likely that you’d need designated teams each for the design, production, and client management operations. These can be scaled up or down as per the changing requirements of your business.

  Before your launch week or even weeks prior, your marketing professional or team must ensure your brand identity is conveyed through adept social media pages.

  Your online presence will not only ascertain your genuineness and popularity in the growing months but also bring in your first customers at a great rate!

Summing Up

Your boutique business can be as simple or fancy as you’d like it to be. Focus on just one genre, or extend your services across all kinds of designs and clothing. With a growing clientele and improved performance in certain niches of boutique, you can easily narrow down some profitable niches or buyer types after a few months of operation.

In any case, whatever you do, happy customers are likely to fuel the business to great heights. Great craftsmanship and good planning are two things that will help in this aspect. Upmetrics can help you explore some targeted planning templates to make sure you have everything you need sorted way before your big boutique launch!

Marketing (both online and offline) is essential for your small business to succeed in this competitive industry and fulfill your sales funnel.

But, many small business owners wonder whether they can market their business effectively with less budget and fewer resources.

The simple answer to this is YES!

But, How?

Don't be concerned! We have the answer to your how.

There are several easy and inexpensive small business marketing ideas that will help you establish your brand presence.

And that's exactly what we'll talk about in this article. We'll go through some of the most effective, practical, and cost-effective ways to market a small business.

Let’s dive in right away!

1. Social Media (literally) Drives Lots of Customers!

The key to establishing trust in social media is by providing genuine content and being present regularly. If your content is solely promotional, potential clients will lose trust in you, and the platform algorithm may hide your content.

Instead, use your time to produce educational, inspirational, and entertaining material.

Social media is about the people. Not about your business. Provide for the people and the people will provide for you. - Matthew Goulart, Founder of Ignite Digital

You can post product comparisons to highlight how your product is unique or also some inspirational quotations that your target consumer could enjoy. Even go for a meme that makes light of the issue your company is trying to solve.

Social media improves the interaction with your audience, resulting in more leads and profitability.

2. Building relationships are an Underrated Small Business Marketing idea.

Relationships are (really) the most underrated small business marketing idea. Building genuine relationships and emotional touch with your customers will help you convert better leads.

However, building relationships is a broad term, and there are a variety of ways to build authentic customer relationships, such as -

• Deliver a speech or engage with an audience at a state or national level organized events.

• Collaborate with other businesses, which can result in a healthy partnership, and you can also avail the benefits of cross-promotion.

• Organize workshops to demonstrate your products & services and invite prominent buyers to attend these seminars for better relationship building.

• Take part in community events to promote your visibility in the market.

• Participate in charitable activities and events to boost your brand presence while also fulfilling your social responsibility.

3. SEO is the Best Tool for Your Small Business Marketing.

If you have your own business, you have googled your website online.

And now, you're undoubtedly wondering, "How can I rank on Google?", "How can I enhance my Google ranking?" There are many elements that influence why a particular site or page ranks in the search engine's top results.

Relevant keywords, keyword positioning, content size, high-quality content, page loading time, post consistency, and other characteristics decide the SEO rankings.

Give them quality. That is the best kind of advertising. - Milton Hershey, Entrepreneur

A professional and interactive website can function as a 24-hour salesperson; you simply need to leverage it wisely.

Publish quality content in the form of blogs or articles on your website. Writing about topics that people are looking for on Google and tying them to your product/service is a purposeful aspect of any successful content marketing strategy.

4. Local Advertising Still Has the Lots of Potential

We know that online advertising is quite trending, and has immense potential, but that doesn’t imply that offline advertisement is dead.

Offline advertising is also a powerful small business marketing idea and you should leverage its potential accordingly.

Check out these amazing local advertising techniques to drive crazy sales for your business -

• Create a personalized pamphlet that you can hand out to customers during each transaction.

• Be featured in the local paper. Even now, when the internet has taken over the advertising industry, some people still choose a newspaper with their morning coffee who could be your potential consumer.

• Consider putting your service or product on billboards across the area where you do business.

• Make the most of your business cards to make it easy for people to contact you.

5. Leverage the Power of Videos & Live Streaming.

Video marketing is too much in trend right now, and for legitimate reasons: video content generates revenue 49 percent faster than non-video material, and 52 percent of marketers consider video to be the most effective type of content.

Among the most popular forms of videos right now is a live stream, which enables you to stream a video in front of your audience in real-time. It's a fantastic method to interact with and connect with your target audience.

Another benefit of using video (particularly for small businesses) is that it provides a way to reach a wide audience without spending a fortune.

Because, at the end of the day, all they truly need is an emotional connection, not expensive technology or visuals.

6. Customers Love Coupons, Discounts & Incentives.

Offering coupons, discounts, and contests is a fantastic method for increasing brand loyalty and grabbing clients' attention.

Who doesn't want to save some money? By providing coupons, loyalty programs, and special discounts, you can give customers the feeling that they are getting a better deal on a specific product or service.

Quick advice on how to offer fantastic discounts:

• Make personalized offers to a specific demographic (millennials, mothers, newlyweds, etc.).

• Partner with other stores to give discounts that are mutually beneficial; for instance, you can pair up with theaters or restaurants so that customers can utilize your coupons.

• You can even provide your consumers with a free trial to demonstrate your product or service and persuade them to purchase from you.

7. Email Marketing is yet Another Beneficial Small Business Marketing Technique.

Email marketing is a vital part of your small business marketing ideas. In fact, 73% of millennials would like to receive business interactions through email.

This method of communication is quite easy, free, and flexible for both new and existing consumers. You start by making a list of your email subscribers and then selecting the best email marketing tool for the work.

Experiment with sending out newsletters once you've set up an email marketing service. Also, make sure to send emails regularly.

8. In-person, Networking Nill Works Wonders.

Many people avoid professional networking because it can feel like a sales pitch. But, if done properly, networking will prove to be quite beneficial for small business marketing.

In-person networking allows you to engage directly with a potential client while also providing reference chances, both of which have greater conversion rates.

Networking is an investment in your business. It takes time and, when done correctly, can yield significant results for years to come." - Diane Helbig

The key to effective in-person networking is to customize your communication as per the demands of your customers. Potential clients don't care about how good you are; they’re interested in how you can help them.

To do so, ask questions to learn about their wants, goals, and obstacles, and then pass over your business card to help them with their specific requirements when the time comes.

9. Social Proofs Are a Very Powerful Brand Awareness Tool.

Social proof is like herd psychology. It operates on the assumption that individuals will follow the herd. Social proof is priceless when it comes to advertising, and it's a fantastic approach to draw a large audience.

Recommendations - Having a strategy in place to gather testimonials is a terrific approach to use social proof and will boost your brand's reputation substantially.

Reviews - Whenever you receive a positive review from a customer, promote it on your website, try ads, opt for social media, and much more.

Badges and Awards - Showcase your badges or awards across all of your marketing channels when you win.

Shares on social media - If your articles receive a lot of comments or views, it's a great opportunity to show the number.

10. Start a Referral Program to Witness the Power of “word of Mouth!

If you want to market your small business effectively, creating a referral program could help you gain even more clients or consumers.

First and foremost, you must determine your objectives. Do you need increased visitors, a longer subscriber retention rate, a better client lifetime value, or something else?

After your goal is clear, you can better catch their attention.

You can leverage your current consumers to attract new clients to your small business with word of mouth. Simply provide them with some incentives in exchange for referring your services to others.

77% of customers are likely to connect with you if someone from their family or friends recommends it. This is the ultimate power of word-of-mouth.

Wrapping up!

You really have a long way to go to build your solid brand presence, but any efforts you make will significantly impact your small business marketing.

On top of it, if you are creative, you may reach out to a large number of potential clients and develop your business without breaking the bank.

So, you can experiment with these small business marketing ideas to see which ones perform best for your company. Once you've determined which platforms are beneficial for your company, you can begin investing more and more in that marketing plan.

One of the most critical reasons for failing a startup is running out of cash due to its mismanagement. Organizations can have a sustainable business by improving their cash burn rate and runway. Whether established or a startup, every stage requires funding to perform routine operations and expand the reach.

This article will explain the cash burn rate, how to calculate burn rate along with its burn rate formula, and how to reduce it to have a sustainable business.

So, let’s get started!

What Does it Indicate?

A low burn rate is always preferable for the investors as it shows that the company is depleting its cash at a lower rate, indicating that funds will sustain until it starts giving positive cash flow.

Companies with high cash burn rates are likely to conceive a situation of financial distress.

Startups that burn cash are burning equity.” Kunal Shah - Founder of CRED

• How to Calculate Cash Burn Rate?

  Two concepts prevail in the investor's community, to have a basic understanding of a company's spending needs and liquidity position, cash burn rate, and cash runway.

  The cash burn rate formula is relatively straightforward to calculate, especially when a company's cash flow statement is available in hands. You can calculate cash burn rates using two methods - gross cash burn rate and net cash burn rate, so let’s look at each type to know how to calculate them.

• Gross Cash Burn Rate

  Gross cash burn is the total operating expenses of an ent, and it is calculated by summing up all the expenditure that attempts to make sales. In other words, a gross cash burn rate will give you an idea of how much your company needs to perform the main activity of your business.

  The operating expenses will typically include factory rent, direct wages, and other related costs to carry out the business’s main activity.

  Suppose a business needs $125,000 to perform operating activities (except for office and other expenses), then the gross cash burn rate would be $125,000.

• Net Cash Burn Rate

  The net cash burn rate considers sales income, and it determines the net burn rate by subtracting all expenses from the sales income of that month.

  Let’s say you sold products worth $50,000 in a month, and the total expenses of that month were $370,000, then your net cash burn rate would be $320,000 ($50,000 - $370,000).

  Similarly, if you want to know how much time you have until you go out of cash in your business, you should use the cash runway formula. It helps you determine a t to focus on increasing positive cash flows and how much time we have to make the business profitable.

  For example, you have $500,000 in banks or hands. And, your gross cash burn is $100,000 per month, then your cash runway will be five months ($500,000 / $100,000). It means you have five months until you will go out of money.

Importance of a Cash Burn Rate

• The investors decide whether to invest in a startup business based on the company’s cash burn rate.

• It tells you whether the expenses made are generating any positive cash flow or not.

• The rate gives you an idea of how much time you will have until you run out of money to carry out your business.

• Businesses can compare their spending efficiency that derives cost per output by using cash burn methods.

• For any start-up or sick business unit which is not generating any cash inflow, calculating the burn rate would be a valuable tool to set objectives and attempts to achieve them.

Now let’s look at the steps to reduce or maintain a desirable cash burn rate to run your business effectively.

8 Key Tips to Keep Your Cash Burn Rate Low

• Cut Down Redundant Expenditures

  Eliminating non-essential costs & expenses can help to cut down redundant expenditures. Also, observing & eliminating the lack of sincerity in work done by the employee by evaluating efficient payroll will help reduce the cash outflow.

  Putting a pause at voluntary over time can help keep staff budget intact. Outsourcing partial and task-based jobs could be a better strategy to limit your cash outflow.

• Aim to Increase Profit-margin

  Price raising can help get more cash inflow without bearing extra cost or outflow. Retaining existing consumers & getting repetitive sales may help increase profit margin while reducing the cost of acquiring a customer.

  Besides, launching a similar range of products in a new variety and exploring new markets could help businesses increase profits.

• Increase Cash Sales

  With the ease of getting EMI approvals and online shopping at your fingertips, the world is heading towards credit purchase. Credit purchases are strategically best to acquire new consumers; this is a heavy cash burden.

  Promoting cash sales might not sound good but is undoubtedly beneficial for cash inflow. Offline presence is a fantastic way to drive more cash sales. Also, early booking & advance payment offers could positively affect the cash inflow with sales.

• Get Extended Credit Periods to Make Repayments

  Suppliers significantly influence cash flow; paying early or high credit rates can heavily affect. Calculating the cost of money will help decide payment schedules for suppliers, and paying bills later and with slow frequency might help keep cash flow stable. Asking for more credit periods from suppliers is beneficial for reducing cash outflow.

  

• Get Additional Funding

  More funds facilitate businesses to be playful with cash flow. Getting additional funding for a business increases cash inflow while keeping the cash outflow & essential expenses parallelly the same. However, the cost of acquiring new financing should be carefully observed.

• Manage Debt Efficiently

  Debt is the business burden that asks for repayment in a specified period. The business faces serious cash out at the time of repayments, as they do not have any confirmed source cash inflow.

  Refinancing debt means applying for a new debt instrument or loan with better terms than previous debt. It also allows repaying previous debts and sets off the liabilities. This method of repaying debt is also known as debt consolidation.

• Try Just-in-time Inventory

  A just-in-time inventory system is a management strategy that allows a company to keep a minimum amount of inventory on hand to meet the demand. Application of just-in-time inventory system, business doesn't need storage & management for the stocks, which helps save cost & outflow of extra cash. It reduces the cost of damaged inventory.

• Short-term Credits for Major Purchases

  Short-term financing means the financing for the smaller period of less than one year, and it helps the businesses generate cash for work in progress and operating expenses. Short-term credits could be for 15 days, two months, or 7 to eight months.

The Bottom Line

The cash burn rate is crucial for start-up companies because they may not generate profits initially, and hence, the cash flow will also not be positive.

So, the cash burn rate will help you understand whether you are on track to generating positive cash flows and how much time you have until you use all the money you have.

Request your free demo at Upmetrics, where we help you generate cash burn rates automatically from our quick and easy-to-use software to help you achieve your business goals faster.

An income statement is one of the most pivotal financial statements that explains the net income earned by your business during the accounting period.

While the balance sheet shows the net position of your assets, liabilities, and shareholders’ funds on a particular date, the income statement provides you with an overall picture of how much business you have done during a period.

However, understanding the profit and loss account and reading the income statement efficiently requires extensive knowledge.

As small business owners, stakeholders, or potential investors, you will need a basic understanding of how income statements are prepared and read efficiently.

In this article, we will deep dive into what is an income statement, what goes into an income statement, and 7 key considerations on how to read profit and loss statements efficiently.

Moreover, the Securities and Exchange Commission (SEC) also requires certain businesses to submit the financial statements to them, and the income statement is one of them.

An income statement often referred to as a profit and loss statement, provides information on the financial performance of a small business during an accounting period. At the same time, the balance sheet provides information on the small business's financial position.

The preparation of an income statement is the first step in preparing the business's financial statements. Once the net income is derived, the balance sheet is ready, and once the balance sheet is prepared, the cash flow statement is prepared.

As we have now understood what an income statement is, let’s move on to our next section on understanding what we need to prepare an income statement, i.e., what goes into an income statement?

What Goes into an Income Statement?

An income statement, as stated before, requires five components - revenue, gains, expenses, losses, and net income.

However, each part has further sub-components and knowing what falls in each category will help you accurately report your net income to your stakeholders.

So, let’s learn what goes into an income statement and consider them for small businesses.

• Revenue

  The total income earned by a small business during an accounting period is referred to as the business's revenue. However, there are two broad categories of revenue to classify as operating and non-operating revenue.

  Operating Revenue refers to the income earned by a small business from its principal activity. For example, a car manufacturer’s operating income will be the sales revenue generated from the sale of cars.

  In contrast, Non-operating Revenue refers to the income generated from other than the principal activity of the business.

  For example, when a car manufacturer sells some scrap material, the scrap's income will be considered a non-operating revenue.

• Cost of Sales

  The cost of sales refers to the expenditure made by the small business to earn operating revenue. In the same example of the car manufacturer, when he makes expenditure on buying spare parts to manufacture a car will be considered as an operating expense.

• Gross Margin

  When you deduct the cost of sales from the operating revenue, you will get the gross margin. A high gross margin indicates that the business can retain more capital and have sufficient money to pay other expenses and debt obligations.

  Gross Margin = Revenue - Cost of Sales

• Non-operating Expenses

  They are incurred to run day-to-day transactions of a business. For example, the salary of a sweeper or tea and refreshment expenses are non-operating expenses.

  

• Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA)

  The EBITDA is derived by deducting non-operating or other expenses except for the interest, tax, depreciation, and amortization expenses from the gross margin. It indicates the overall performance of the business as it considers the net income before deducting interest, tax, depreciation, and amortization expenses.

  EBITDA = Gross Margin - Non-operating Expenses except Interest, Tax, Depreciation, and Amortization

  Or

  EBITDA = Net Profit = Interest + Tax + Depreciation + Amortization

• Additional Expenses

  Additional expenses will include interest expense, income tax expense, gains or losses from the sale of exceptional items, and depreciation or amortization expense.

• Net Income/Profit

  The net income or the profit is the most crucial element of the income statement as it gives the outcome of the profit and loss statement. Net income shows whether your business was profitable or not. Net income is derived as follows:

  The net income could be positive or negative - if it is positive, then it is a net profit, and if it is negative, it is a net loss.

  Net Income = EBITDA - Additional Expenses

The number one problem in today’s generation and the economy is the lack of Financial Literacy.” - Alan Greenspan (Past Chairman of Board of Governors of Federal Reserve System, USA)

Income Statement Sample

5 Key Considerations on How to Read Profit and Loss Statement Efficiently

Reading a profit and loss statement efficiently requires some basic knowledge of the income statement to understand the business's flow and performance. Below are some critical considerations to understanding the profit and loss statement efficiently.

• Understand the Total Turnover

  The total turnover consists of operating and non-operating revenue. Having an idea of how much total operating revenue your business has made will make a massive difference in understanding the sales performance of the small business.

• Check the Gross Profit Percentage

  Understanding gross profit margin helps you make certain business-related decisions such as how to improve the operational efficiency of the company, how to improve the overall business performance, etc.

  

• Look for the Highest Source of Revenue

  From which source the company made revenue the most is a crucial aspect to understand whether the company has done the business that it proposed to do or did it earn revenue from any other sources.

• Check the Exceptional Items Section

  When a company incurs an expense that is exceptional and non-recurring, it is shown under the Exceptional Items section, such as legal settlements.

  Reviewing this section will give you an idea that the company does not incur such expenses every year, but it has to incur these expenses due to some extraordinary conditions.

• Consider EBITDA

  Profit before interest, tax, depreciation and amortization will give you the net income had these expenses are not incurred.

  Sometimes, these expenditures are so huge that the net profit after deducting these three expenses will be significantly less and will give you a different picture of the performance of the business.

Conclusion

The income statement acts as a benchmark of how well the company did in a particular accounting period, and you can also compare the results with your competitors. It is an indicator of your business's ability whether it will be profitable in the long run or not.

Our software will automatically create accurate financial statements and analysis and charts of the business performance.

Request your free demo at Upmetrics, where you can get financial reporting, including cash flow, profit and loss statement, balance sheet by just entering minimal information.

Before you start developing your product for your startup business, you will need these two financial tools - budgeting and financial forecasting. They will help you create a business strategy and funding from the investors.

Projected financial statements are the basis for any business’s feasibility, so prepare budgeting and financial forecasting to create a sustainable business plan.

Budgeting and Financial forecasting are often confused as they both more or less estimate the financial revenue. Still, there are specific key differences in its purpose, usability, duration, final outcome, and practical application.

This article will help you understand what is a budget, what financial forecasting is, why they are essential for your startup, and the critical differences between budgeting and forecasting, along with the steps to create effective budgeting and financial forecasting.

So, let’s start with understanding what is a budget?

Types of Budget Most Commonly Used for Startups

• Master Budget

  A master budget is an overall business budget showing smaller and specified parts from the operational and financial budgets. It gives the management an idea of how they should plan their business activities.

• Financial Budget

  The financial budget allows you to understand the overall financial position that you should expect your business to have in a specified duration, such as budgeted capital, budget sales, projected revenue, expected liabilities, and budgeted total assets for the company.

• Operating Budget

  The operating budget will give you an idea of how much operating revenue and operating expenses you will need for a specified period. The operating revenue and cost refer to the income and expenses directly related to your business.

  For example, if you manufacture paints, the revenue from selling color paints is your operating income, but the revenue from scrap is not your operating income.

• Cash Flow Budget

  A cash flow budget is prepared to know the money that comes into the business and goes out. The estimation of the cash flow is done using revenue and expense forecasts.

  → Download Now: Free Cashflow Calculator

• Static Budget

  A static budget uses a fixed amount of revenue and expense throughout the year, giving you an idea of how much money you will receive and how much money you have to spend. Not-for-profit entities use it as they are given a fixed amount to use.

  Apart from the above types, there are other types of budget based on the requirements of the business startup, such as fixed cost budget, revenue budget, labor budget, expenditure budget, etc.

Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.” - Joe Biden.

Why is Budgeting Important for Startups?

• Budget acts as an effective financial management tool for your business plan and helps you understand where you will be in the coming years.

• The budget helps you compare your actual results with the budgeted outcome to understand your business financials against what you expected/planned.

• Budgeted numbers are critical components to preparing a variance analysis that will help you understand your actual performance against your budgeted targets.

• Early detection of any deviation from your budgeted plan will enable you to determine the reasons for the deviation and improve the performance.

Types of Financial Forecasting Startups Use for their Businesses:

Below are the most common types of financial forecasting every startup business performs:

• Revenue Forecasting

  Revenue forecasting helps you understand your revenue trends based on the projections and historical information available.

• Expenditure Forecasting

  Expenditure forecasting projects various expenses that need to be incurred to run the business based on the current trends and historical data.

• Cash Flow Forecasting

  Cash flow forecasting forecasts how much money your business will have and how much cash will go out.

Why is Financial Forecasting Important for Startups?

It helps you understand how your business will grow considering the current market trends and allows you to consider the competition for the product or service you will sell.

When you have a forecast, you will try to achieve or outperform the forecasted figure that sets a goal for your business.

It is the most flexible way to predict your finances as it can rapidly incorporate the changes.

But then budget and forecasting look similar; how are they different from each other? Let’s find out what are the key differences between budgeting and forecasting.

Budgeting Vs Forecasting: Key Differences

Purpose

The budget tells you what levels of sales, expenses, and other assets and liabilities you want to achieve in a particular time frame. In contrast, the forecasting will tell you what you will achieve considering the current trends and past data.

Underlying Concept

The budget considers past data to predict and set certain levels for sales, expense, capital, asset, and liabilities so that you can compare your actual performance against the budgeted plan. On the other hand, forecasting considers market trends and analysis to understand how your business will achieve the forecasted revenue for a specified period.

Flexibility for Revision

The budget is generally not revised once it is made as it, later on, compares the actual performance to find out the variance; hence it is not much flexible. In contrast, the forecasting is quite flexible and revised as specific trends change in the market to consider them into your forecasted revenue and expenses.

Practical Use

A budget is a tool to control your financial and operational performance, whereas a forecasted revenue can be used to develop your budgeted financials.

Duration

The budget is mainly prepared for 12 months or less, whereas a financial forecast could be 3 to 5 years. Sometimes, financial forecasting is also done for three months or six months.

Outcome

Budget prepares budgeted financial statements while forecasting provides projected financial trends for revenue and expenses.

Business Plan

Budget gives you an overall business plan for capital, assets, liabilities, revenue, expenditure, cash flow, etc., whereas forecasting gives a business plan primarily for income, expenditure, and cash flow.

Correlation

Forecasting is an integral part of budgeting as it provides inputs to prepare an overall budget. In comparison, forecasting does not cover budgeting as it is done independently.

How to Prepare an Effective Budget and Forecast for Startups?

1. Collect historical details and current market trends and align them with your business goals.

2. Analyze the product market, related trends and consider them for forecasting.

3. Make assumptions and forecast the revenue, expenses, cash flows based on the details gathered.

4. Use the forecasted numbers to prepare overall budgeted financial statements.

5. Revisit the underlying assumptions and market trends for any changes.

The Bottom Line

Budgeting and financial forecasting are the two pillars on which you can understand and estimate your company’s financial performance for a particular period. An effective budget and forecasting can help you achieve your targets and make it possible for you to go as per plan.

Request your free demo at Upmetrics, where you can customize your financial forecasting with simple steps. It will automatically create effective financial forecasts and simplified financial summaries for your business.

Choosing a legal structure of a business is one of the critical decisions a business owner makes. Business structures influence the daily operations of a business, the taxes a business owes, and the amount of personal risk business owners are exposed to. They also determine how much capital an owner can raise.

Now that we understand what a business structure is and its importance, let’s compare and study the various types of structures.

But before we begin, here’s a glimpse of what we’ll learn:

1. What Is A Business Structure?

2. Types Of Business Structures

3. Comparison Chart of Legal Structure

4. Key Factors of Structuring Your Business

5. The Best Business Structure

Types Of Business Structures

There are broad divisions for business structures - Informal business structures and formal business structures.

1. Informal Business Structures

   Informal business structures consist of Sole Proprietorship and Partnership. The key characteristic of such a structure is that they don’t offer taxation benefits or personal liability protection.

   Let’s learn more about them in detail. Shall we?

   1. Sole Proprietorship

      The sole proprietorship business structure consists of a single individual and is the easiest to set up. This is the default structure for a business that has been conducting activities and has not yet registered itself.

      According to a report by the IRS - “Sole Proprietorship Returns, Tax Year 2018”, the number of sole proprietorships in the United States of America was approximately 27.1 million. This makes it the most common legal structure in the country.

      Under a sole proprietorship, the owner and organization are considered as a single entity. This means that both assets and liabilities owned by the firm are considered that of the owner.

      Sole proprietors can conduct commerce in their own name or under a trading name.

      KEY HIGHLIGHTS:

      • Easy to set up - Simplest and easiest business structure to set up.
      • Fewer Formalities - There are no board members or partners. Therefore, there is no need for shareholder meetings or voting.
      • Low Cost - Relatively inexpensive to set up.

         

      • Tax Deductions - The business owner and the business are considered as one entity. Therefore, owners are eligible for business tax deductions such as health insurance deductions.
      • Low Risk - Forming and dissolving a proprietorship is easy and involves less paperwork.
      • Zero liability protection - Sole proprietors are considered self-employed. This results in them not getting any liability protection.
      • Difficulty in securing credit - It is relatively difficult for sole proprietors to secure loans since they do not have a substantial credit history.
      • Difficult to sell the business - Sole proprietorships are attached to an individual. In case the business owner no longer exists or decides to not run the company, the business ceases to exist. This, therefore, makes it difficult to sell the business.

      Recommended for:

      Independent contractors or individuals are best suited for a sole proprietorship. Many home-based businesses too are best suited. Examples include mom-and-pop stores, freelance writers, and landscaping companies.

   2. Partnerships

      They are the simplest business structure that comprises two or more (maximum 20) business owners. There are two types of partnerships - limited partnerships (LP) and limited liability partnerships (LLP).

      Limited Partnerships (LP) consist of one general partner and other partners (limited partners). The general partner has unlimited liability for the losses and debts of the company. While the limited partners have protection against company debts and losses.

      On the other hand, in an LLP, all partners have limited liability protection against company debts and losses.

      Partnerships and sole proprietorship have one thing in common i.e. - the owner and the business is considered as a single legal entity.

      KEY HIGHLIGHTS:

      • Easy formation - Requires no legal formalities and involves less paperwork.
      • Increased credit - Two or more partners help secure more credit.
      • Special taxation arrangement - Partners of the firm report their respective share of business profit or loss in their income tax return.
      • No liability protection - Partners are considered legally liable for debts and obligations of the business. In case of a default, their personal assets can be seized.
      • Costly - It is a bit costly compared to a sole proprietorship since an attorney is needed to review the legal agreement between the partners

      Recommended for:

      A business looking to pool in more resources - capital, expertise. Accounting and family-run law firms are great examples.

2. Formal Business Structures

   These consist of Corporations and LLCs. Its key characteristic is that they offer personal liability protection, tax benefits, easier access to capital, and increased trustworthiness.

   To know more about them, let’s dive straight into them.

   1. Corporations

      In corporations, unlike proprietorships and partnerships, the owner and business are two separate legal entities. A corporation can therefore own assets and sell ownership rights as equity. It is formal and involves greater compliance.

      If an organization plans to list its business publicly, they need to be registered as a corporation.

      KEY HIGHLIGHTS:

      • Personal liability protection - Provides maximum liability protection compared to other legal business structures. The shareholders are, therefore, not personally liable for any debts or losses incurred by the business.
      • Transfer of ownership - Shareholders of a corporation have increased flexibility to transfer ownership.
      • Access to capital - It is easier to raise funds and scale a business.
      • Double taxation - Business income is taxed twice. Once on the income of the corporation and second, on dividends earned by the shareholders.
      • Increased compliance - Compliance activities such as voting, elections of company directors, and a formal meeting is required.
      • Higher cost of formation - The cost of incorporation is higher compared to other legal structures.
      • There are various types of corporations. Let’s understand them in greater detail.

      1. C Corp

         It is the standard corporation under the IRS (Internal Revenue Service) rules. C Corps are held legally responsible, taxed, and earn profits as a separate legal entity. It offers the strongest protection to its owners from any liability or losses.

         Unlike other business structures, C Corp pays income tax on their profits. In a few cases, C Corporations are taxed twice (double taxation) - first, when the company earns profits, and second when the dividends are rolled out to shareholders on their tax returns.

         All major companies such as Amazon, IBM, Walmart, and Apple are C Corps.

         Recommended for:

         Medium or high-risk businesses that need to raise money. Or, plan to go public or eventually get sold.

      2. S Corp

         S Corp or Small Business Corporation may consist of 100 shareholders and functions similar to a Partnership. The S Corp structure was designed to avoid double taxation. This means that S Corp is not subject to corporate tax rates and profits or losses are passed on directly to the owners.

         S Corps exists as a separate legal entity and are undisturbed in case a shareholder sells their share or leaves the company.

         Recommended for:

         Business owners looking to combine the benefits of corporations with the tax advantage of partnerships. If a business is risky in nature, owners can also avail of limited liability protection.

      3. B Corp

         B Corp or Benefit Corporation is driven by both mission and profit. They are taxed similarly to C Corp but are different from them in terms of purpose and accountability. Shareholders are responsible to ensure that public benefit and financial profit both occur hand in hand.

         Recommended for:

         Businesses looking to earn profits along with benefiting society.

   2. Close Corporation

      Close Corporation resembles B Corp but does not have a traditional corporate structure. The operations of a Close Corporation do not require a board of directors and can be overseen by a small group of shareholders.

      Recommended for:

      Family-owned businesses or business owners looking to hold a company privately while enjoying limited liability.

   3. Non-Profit Corporation

      If an organization's work benefits the public and it functions to do charity, religious, scientific, or literary work, it is known as Non-Profit Corporation.

      There are tax exemptions available for Non Profits provided they apply to the IRS.

      Non Profits have stringent rules regarding their profits, how they use them, and to whom they distribute them. For example, NonProfits can’t distribute profits to political agendas.

      Recommended for:

      Businesses that focus on benefiting the public than earning profits.

   4. Limited Liability Company (LLC)

      An LLC is a hybrid business structure. It combines the best features of both business organizational structures - partnerships and corporations. It reduces the tax burden, and business compliance while ensuring personal liability protection for business owners. Both profits and losses are passed through to the business owner's income.

      KEY HIGHLIGHTS:

      • Limited liability - Members are protected from personal liability for acts performed by the LLC. Personal assets of business owners are protected in case the LLC files for bankruptcy.
      • Flexible membership - Members can be individuals, partnerships, or corporations. There is also no limit to the number of members.
      • Management structure - LLC has the flexibility of being managed by members or a management group. When an LLC is managed by members, the owners oversee the day-to-day business operations. When managed by managers, the LLC acts similarly to corporations i.e. business management becomes the responsibility of directors rather than owners (shareholders).
      • Costly - An LLC is costly in comparison to sole proprietorships and partnerships. Many states also impose a recurring fee for annual reports and/or franchise tax fees.
      • Transferable ownership - Often difficult to transfer in comparison to corporations. In a corporation, ownership can be increased by simply selling stocks. While in an LLC, the approval of members is needed to add or alter ownership percentages.
      • Regulations - LLCs are governed differently by each state. Therefore, regulations sometimes become a disadvantage.

      Recommended for:

      Business owners with medium/high-risk businesses who want to protect their personal assets. Also, owners looking to pay lower taxes compared to corporations.

Now that we have a brief understanding of the various types of business structures, let’s compare and understand the differences.

Legal Structure Of A Business: A Comparison Chart

The above comparison would help us understand the major differences between the various business structures. But before you decide on a business structure, the below-given factors need to be kept in mind.

Key Factors To Keep In Mind While Structuring Your Business

Taxes: Sole Proprietorship, partnership, S Corp, and LLC owners categorize their business income as personal income. Whereas, income accrued under C Corporation, is separate from a business owner’s income.

So, in the early stages of growth, a small business owner can choose a sole proprietorship or partnership. This helps avoid double taxation. After achieving better results, a business can be restructured to C Corp to reap its benefits.

• Liability: A corporation carries the least personal liability while sole proprietors carry the most liability. Depending on the nature of your business and the risk involved, a specific business structure can be chosen to protect personal assets.
• Hierarchy: The legal structure of a business determines whether a business has a board of directors. In corporations, a board of directors needs to be appointed while sole proprietors have the flexibility to do away with such complications. Depending on the growth stage and specific objectives of your business, an appropriate legal structure can be chosen.
• Raising Capital: If you wish to raise capital for your business, a corporation could be the best choice. On the other hand, if you prefer flexibility and ease of doing business over raising capital, a sole proprietorship could be the best choice.

What Is The Difference Between LLC And S Corp?

An S Corp has a separate legal entity where the owners act as shareholders. While in an LLC, the members are the owners. LLC combines the pass-through-tax benefits of a partnership with the limited liability of a corporation.

LLCs can have unlimited members while S Corp are restricted to 100 shareholders. A non-U.S citizen can be an LLC member. While, S Corps cannot have non-U.S citizens as a shareholder. LLCs can be owned by corporations, unlike S Corps.

LLC owners cannot be taxed as employees. While S Corps tax their owners as employees. LLC have no obligation to maintain meeting records while such is not the case with S Corps.

What Is The Difference Between LLC And C Corp?

The management is simple for an LLC while corporations are more formally structured. There is are no meetings required for an LLC whereas corporations require formal meetings. The ownership is distributed freely in the case of LLCs while stock represents the ownership in a corporation.

A C Corp pays its own taxes while in an LLC members pay taxes on their share of profits. In the event of a personal lawsuit, a creditor can seize a shareholder’s stock and company assets, in the case of a C Corp. In the case of LLCs, legal provisions protect an LLC member from losing ownership and company assets. Also, stocks of a C Corp are publicly traded, unlike LLCs.

Should I Make My LLC An S Corp?

S Corp provides tax benefits, unlike LLCs.

If you have an LLC, you are liable to pay self-employment tax.

As an employee, you would pay 7.65% of your paycheck as self-employment tax. The employer makes an equal contribution. In an LLC, the owner is self-employed. So, both the employer and employee pay 15.3% tax.

On an income of $100,000, $15,000 (15.3%) of self-employment tax is paid.

S Corps on the other hand do not have to pay self-employment tax. The corporation is treated as a separate entity that employs you.

The self-employment tax is, therefore, levied on the salary the owner pay themselves. It is usually 1/3rd of the total income earned. In this case, 15.3% is applied on 1/3rd of $100,000 ie $5,100.

In conclusion, if your business earns more than $50,000 in net income(not revenue), switching to S Corp is beneficial. Since S Corp incurs more fees - tax filing fees, and accountancy charges, it is best to register as an LLC if you earn less than $50k in net profit.

What Is The Best Business Structure For A Small Business?

Usually, small business owners opt for a sole proprietorship, partnerships, and LLCs more often than a corporation. If a business owner wants to test their business while keeping operations simple, a sole proprietorship would be the best choice. If there are multiple business owners and the business requires more capital investment - a partnership would be the best choice. But if the owner wants liability protection - LLCs would be a perfect choice.

In Conclusion

Choosing the best legal business structure is a critical decision for your business's growth journey.

The business structure affects everything - the ability to attract capital, personal liability, taxes owed, and day-to-day paperwork.

Business owners should analyze their situation, and restate their objectives and long-term vision because each business is uniquely different.

Do you have a startup business idea in your mind but are unsure of presenting the financial side of your business idea? Don’t worry; you are reading the right article that will help you understand everything about preparing financial projections for startups.

Preparing the financial forecast is crucial in attracting investors, generating leads, or securing a bank loan. However, predicting numbers for the next three to five years is pretty challenging when you have not even started your business-presenting realistic financial statements to investors, stakeholders, or potential customers.

This article will explain what is a financial projection, its key components, including the projected balance sheet, projected income statement, projected cash flow, and how to create financial projections for startups.

Assumptions Before Starting Financial Projections for Startups

Before jumping on to making projections, you must consider a few factors such as critical assumptions, scenario analysis, and the purpose of your financial statements.

Scenario analysis helps you create two to three sets of financial statements for various possibilities, such as if the business goes well for all five years if the company works at breakeven, and if the business picks up from the third year.

The purpose of your financial projection has a crucial role to play. For example, if you are preparing financial estimates for banks or financial institutions, or investors, you have to be very careful in predicting your numbers - realistic yet growing.

However, if you are preparing the projections for your internal purpose, you will more focus on the expense and the revenue side of your statements.

Assumptions are the very basis of your financial projections. You have to assume certain things as you have not started your business, and the actual scenario may deviate from what is projected. Let’s understand which assumptions you need to make.

Revenue Forecast

The financial projections for startups will start from a revenue or sales forecast assumption, and you have to assume a realistic growth rate at which you expect your sales or revenue to grow each year.

For example, you may assume your revenue will grow at a 10% rate every year, and it is not mandatory to have the same rate for each year. You need to understand your market, and based on the number of units you would want to sell, you can predict different growth rates for other years.

Expense Forecast

As your revenue grows, you will expend more - pay more salary, spend more on office infrastructure or pay more tax. Expense forecast assumption will require you to assume an expense growth rate at which your expenses will grow every year.

For example, you may assume your expense for the first two years will grow at a 7% rate, while the last three years may grow at a 10% rate considering your revenue levels. The expenses you project may be more than your revenue, and it is completely fine.

As a new business, you may not make enough revenue, and your expense side might be higher than the revenue.

Key Components of Financial Projections

For any financial forecast; projected balance sheet projected income statements, and projected cash flow statements are the essential components without which the financial forecast is incomplete.

Some financial statements also include ratio analysis, primarily when applying for a bank loan.

Projected Income Statement

The projected income statement represents your sales and expense forecast which is the most crucial statement for the investors for decision-making. It is the statement that will decide whether you will get the funding or not.

The projected income statement starts by projecting sales for the first five years of your business by applying an assumed growth rate. You will deduct all the projected expenses from the revenue using the assumed growth rate.

The net result of deducting all expenses from the revenue will give you a projected net profit. A high-level projected income statement will not have segregations such as operating profit, gross profit, profit after tax, profit after interest, and depreciation and profit available to equity shareholders.

But if you are projecting everything in detail, you must include these details in your projected income statement.

Projected Balance Sheet

The projected balance sheet will have three major elements - proprietor’s/company’s capital, assets, and liabilities. Remember one accounting rule of assets = capital + liabilities.

Your projected balance sheet will represent what assets you will hold for the first five years, how many liabilities you will have, how much capital you will be raising, and at what pace it will grow.

Investors will be keen to know the capital section of the balance sheet as they will be investing their money into your business; they would want to know at what rate it will grow.

Projected Cashflow

A projected cash flow statement will provide your investors with the information on how much cash (on hand and in the bank) you have, how much money you will receive from revenue and what cash expenses will you make to run your business.

The projected cash flow statement will enable your investors to understand how much net you will receive and where you will use all your money. If you are using too long credit periods, it may impact his investment decision.

Why are Financial Projections Important?

• It enables decision-making for your investors, banks, and other stakeholders.
• Provides you with financial planning for the next three to five years so that you can focus on executing your business idea.
• Cater's long-term strategic planning for your business as the first few years are already projected.
• It helps you set goals as your revenue goals are clearly defined in the projected income statement.
• It enables you to identify your expected profits or remunerations as capital projections in the projected balance sheet.

How to Write Financial Projections Effectively?

A financial forecast for a startup needs lots of research, study, analysis, and great team efforts to make it look realistic, predictable, and optimistic. Here are some tips on preparing effective financial forecasts for your startup business.

Perform Market Research

Have a clear idea of which market you are targeting and conduct thorough research of your target market. Studying your competitor’s strategies and business models will also help you predict your revenue for the initial years.

Set Clear Revenue Targets

Whether or not your business idea works, setting clear goals on revenue will help you make serious efforts in making your business idea successful. If your revenue targets are clear, all other steps of the financial forecast will follow smoothly.

Use Reasonable Assumptions

Assumptions are the foremost requirement for preparing projected financial statements. You have to use reasonable assumptions to provide realistic projections to your investors and potential customers.

Develop a Sustainable and Fair Business Model

The business model helps you and investors understand how to make money and your strategy to achieve your revenue targets. A sustainable business model will strongly impact the decisions of your investors, and it helps prepare your financial forecast as you already have a definitive strategy to follow.

Be Realistic with the Numbers

The purpose of the financial statements should not be to receive the desired funding; they should always be realistic and show achievable results and forecasts. The more natural your financials are, the more chances you will have to get the desired funding from the investors.

Final Thoughts

Although many financial forecast templates are available, preparing compelling financial projections for startups using accurate software or application is essential. Robust financial statements developed using the right tools and under the supervision of the finance experts add more value to the numbers.

Upmetrics can help you efficiently prepare realistic, robust, and sustainable financial projections for startups that will attract more investors and serve as a strategy for you to follow to meet your organizational goals.

Choosing a business location is one of the key decisions you'll have to make as an entrepreneur. Doing so shouldn't be based on a personal whim but rather on a detailed understanding of your needs and limits. To do this, you need to understand how you can choose the right location.

In this article, we’ll see how to pick the right location for your business, and the factors that influence your decision.

“The precept that location is key to the success of a business applies to art, and even to life itself: we thrive or wither depending on how nourishing our environment is.” – Yann Martel

How to pick the right location for your business

Picking the right business location depends greatly on what you want that location to do for you.

Asking the following question can be a great start to conducting your location analysis:

• What is the size of your future shop or office?
• What are your infrastructure requirements? Are you looking for a place to set up shop or to build your own office?
• What’s your budget to set up the new location?
• Do you need to be closer to a particular supplier for raw materials?

Depending on your business, your requirements will vary. Once you've identified your company needs, look at the factors that affect your business location to get a better idea of your options.

Factors influencing business location

Several factors determine how your business functions and sustains itself. These are some of them you should consider before picking your business location:

1. Proximity to target customers

In most cases, it pays to be in a location where there’s a high demand for your product. However, depending on your business type, you can decide whether you need to be near your target customers.

For instance, if you’re planning to start a restaurant, it might be more profitable to be in an urban locality where people eat out frequently. Conversely, if you plan on starting a manufacturing business, being close to your target customers might not be a priority.

Regardless of your business type, your proximity to your customers becomes more significant if:

• Your product life cycle is short
• Your transportation cost is high
• Your products are fragile
• Your products require after-sales services

2. Competitors’ location

Picking a location closer to a competitor can impact your business in many ways. Done wisely, it can even turn out to be a good strategy.

If your products have a competitive advantage, setting up shop near your competitors can work in your favour. Not only can you capture their market share, but also provide your customers with a sense of choice.

Here are the benefits of setting up your business near a competitor:

• A healthy competition will fuel innovation.
• You can leverage your competitors’ marketing strategies for your benefit. Since they have already pulled in customers to the area, you don’t have to spend a lot on advertising yourself.
• Being close to your competitors allows you to strategize better and understand what works and what doesn’t in the market.
• If you happen to build a good relationship with your competitor, you can even collaborate with them.

If you’re afraid that your competitors’ offerings may outperform yours, you may choose other locations that will place you in the centre of the market.

3. Talent acquisition

It’s not just customers and suppliers you need to worry about when picking a location; you also need to consider your recruitment needs.

If you plan to build a team, you need to check the following:

• Are there enough talented workers in the area you can hire?
• Does the location have good transportation and other facilities?
• Will the location help boost your staff’s productivity?
• How far is the location from the nearest residential area?
• Will you be reimbursing your staff’s travel expenses?

4. Operating and other costs

The location of your business will greatly influence the expenses you will have to incur.

Some of those expenses to look out for are:

• Transportation of raw materials
• Product delivery
• Inventory costs
• Parking fees
• Labor costs
• Electricity costs
• Water costs

5. Taxes

There are a variety of taxes you would have to pay once you've set up your business. These vary depending on state and location. Moreover, some areas favor particular industries, creating favorable tax conditions. So, it’s essential to consider the same before deciding on the location of your business.

A few of the commonly levied taxes on businesses are:

• Sales tax
• Income tax
• Property tax
• Corporate tax

6. Government incentives

Most young entrepreneurs are constantly on the lookout for funding and support. The good news is that some local and state governments do offer help. This can be in the form of financial incentives, low-interest loans, tax relaxations, and other benefits. 

Make sure to research these before you lock your decision.

Some websites where you can find relevant info are:

• U.S. Chamber of Commerce
• U.S. Small Business Administration
• USA Government

7. Government laws and policies

Converse to the last point, there could be several government laws and policies that may restrict or negatively impact your business activities. Make sure to consider these before finalizing your business location.

Some of the aspects you should look into are:

• Licenses and permits
• Labour and employment laws
• Trade barriers
• Building codes
• Environmental regulations
• Advertising regulations

8. Local zoning ordinances

Local authorities have fixed rules and regulations regarding land usage—these laws are called zoning ordinances. Check if your plans of using and modifying the property comply with local laws to avoid running into problems later down the line.

Some locations have laws that deny permits for specific industries or restrict certain business activities. So, verify with the local municipal corporations or similar authorities to ensure you’re allowed to do business in that location.

9. Local community

While opening your business, it’s crucial to consider the impact of the local community on your business.

Asking the below questions might help you:

• Is the community welcoming of small businesses?
• Does your business benefit the community in any way?
• Are the local values compatible with your company’s values?
• Will you be able to foster long-term relationships with the community?

10. Safety and security

Feeling safe and conducting your business without any disturbances is critical.

Enquire about the following while looking for a location:

• Is the crime rate in the area high?
• How well is the policing system enforced?
• Is there a danger of theft or burglary? Will your inventory be secure?
• Is it a safe place for you and your employees?
• Will you need to upgrade the property to safeguard your business?

Choose the right location for your business

Going through a myriad of business location ideas can often cause decision fatigue due to the irreversibility of the action. However, you can increase your chances of success by evaluating your options via extensive research. 

Examine the above factors to analyze your compatibility with your desired location and identify potential fits to check if it’s viable. Make sure to take your time to avoid making the wrong investment. You can even consider hiring an advisor or professional to help you with this process.

It takes correct nurturing for a seed to turn into a tree. In the same manner, a business needs nurturing to expand and grow. For a business, strategic business planning plays this role. Strategizing directs your business to the right path and eliminates factors that cause a setback. 

It helps you achieve the desired goal by breaking it down into smaller steps. In the long run, implementing such a process can yield maximized results and increase the growth potential of your business.  It also helps you look at your business ideas and dreams in a different light and makes them look more realistic.

So, if you have big business ideas and want to make them real then strategic planning can help you. How? Well, read on to find out.

What to Include in a Strategic Business Planning Process?

Planning is a long-term commitment for your business. You not only have to create a well-rounded plan but also update it frequently. Hence, it is essential to make it the right way.

A good plan consists of the following elements:

• A Long-term Vision Statement: This statement consists of where and how you want to see your business in the next 5-10 years.

• A Statement of Top Objectives: This element involves setting specific goals for your business such as increasing the market share by 15% or getting the big clients. 

• External Factors: This includes external factors or factors out of your control that are likely to affect your business such as demand of products, financing possibilities, etc. 

• An Implementation Plan: This includes creating an action plan that aligns with your business goals.

• Arranging the Resources: Next up businesses arrange the resources they’ll need to carry out the task. This helps you ensure that you’ll have all the resources your business would require on time.

• Timely Analysis and Evaluation of Business Outcomes: A strategic business plan needs to be evaluated for its performance and analyzed for any required modifications. Business conditions change frequently. To accommodate that, the strategies should also be modified regularly.

Understanding the current market position of your business, implementing SWOT analysis, setting clear goals for the future, and incorporating an action plan, are necessary procedures to help you achieve outcomes equivalent to your efforts.

Benefits of Implementing Strategic Business Planning

The strategic business planning process helps you make your business futuristic and ready for challenges. And although there are several things that a good strategy can help you with here are a few major ones for your reference:

Provides a Clear Picture of Business Goal

Clarity is crucial to business success. By planning and strategizing, you set your goals and actions to reach there. Strategic business planning also requires you to have a focus on your current business position and evaluate it regularly. As a result, you know where your business stands, what are the hindrances on the path, and what you need to do to climb the next level.

Enhances Business Efficiency 

The goals and the action plan are the two pillars o creating strategies that work. Because these elements are already stated, employees can get clear communication on what needs to be done. Their roles and responsibilities are set specific to the desired output. Thus, any chaos is eliminated and the efficiency of business increases. 

Increases the Employee Morale

As the tasks are communicated clearly to employees, they do it in a better and more efficient way. They know what they need to do and it gives them a sense of responsibility towards the business. Which in turn helps them feel like an integral part of the business and encourages them to perform using their full potential. 

Multiplies the Business Growth

The process is set with a futuristic vision in mind. By taking logical and well-analyzed steps, business threats can be handled well, and opportunities can be magnified. In addition, the support from employees and the coordination between various departments of your business brings stability to the table. With such harmony in place, your business growth can multiply sooner than anticipated. 

Strategic Business Plan Example

Often there seems to be confusion between a strategic business plan and a business plan. In reality, both have vast differences. A business plan sets the planning for short-term to medium-term visions and goals. While the latter includes medium-term to long-term vision and goals of your business. 

Also, one planning strategy does not fit all businesses. Here are different strategic business plan examples. You can choose the one that suits your business the best.

• A SOAR Analysis: This analysis is an updated version of the SWOT analysis as we discussed above. SOAR means Strengths, Opportunities, Aspirations, and Results. The two eliminations of SWOT - Weakness, and Threat are replaced with positive ones here. This gives SOAR analysis a more positive outlook compared to SWOT.

• The Five Forces: This example is quite in-depth. It touches on the external factors that can affect your business. The Five Forces considered in this analysis are the power of suppliers, competitive rivalry, the power of buyers, the threat of a new entry, and lastly the threat of substitute products. It helps your business gauge the current scenario of the market, make changes and improve accordingly to succeed. 

• STEEPLE: It stands for the following.

  • Social: Any change in demographic or lifestyle trends or patterns.
  • Technological: New technological advancements that can help your business improve or grow.
  • Economic: The inflation rate, rate of interest, etc. of the country you are conducting your business in.
  • Environmental: Any change in the way regulators and consumers perceive sustainable development.
  • Political: Change in government, regulations, taxation, etc.
  • Legal: Changes in legal aspects and systems that can affect your business.
  • Ethical: Implementation of ethical policies and moral standards.

• NOISE: This analysis is the acronym for Needs, Opportunities, Improvements, Strengths, and Exceptions. NOISE is an improvement-based method. It has a futuristic view and helps your business identify the opportunities to become efficient and better.

• CORE Analysis: A CORE analysis, as the name suggests, looks at the core of a business - finance. Your business’s capital raised, invested, ownership scenario, the risk involved, investor relation, etc. are crucial to this method. They are a foundational part of the CORE analysis. Performing this analysis helps you get a clear understanding of the financial health of your business.

Making a Strategic Business Plan

The strategic planning process can ask considerable effort, time, and resources, but investing in it will put you ahead of the competition. It can be intimidating at first as it involves a thorough analysis of different factors involved. But it also helps your business develop a clear vision and mitigate the risk factors.

The best part of this process is that even small and medium-scale businesses can implement it just like large ones. You just have to make sure that your strategies align your business goal with actionable steps to speed up the overall business growth.

Whether you’re a startup or an established company, raising capital is one of the hardest feats of entrepreneurship. Just having a viable business idea is not enough to score funding; you also need a great pitch to convey its viability.

In this article, we’ll see what is a business pitch, its different types, how to write one, and essential tips for writing a great pitch for your company.

A business pitch should be clear, compelling, and catchy. It should focus on the value you create via the products or services you offer. Business pitches can be long or short, depending on the audience and the context it is presented in.

Types of business pitches

Although presenting your business idea in depth is ideal, investors might not always have enough time to go through the whole thing. That's why you need to size your pitch depending on their availability.

Broadly speaking, there are three different types of business pitches:

1. Elevator pitch

The term elevator pitch comes from the idea that summarizing your pitch shouldn't take longer than the duration of an elevator ride. That's about 30 seconds to two minutes.

Within this short time window, you need to describe your product, the problem it solves, and why it's worth investing in. The goal here is to pique the investor's curiosity to know more, so you can get an appointment to elaborate on it later.

“The purpose of an elevator pitch is to describe a situation or solution so compelling that the person you're with wants to hear more even after the elevator ride is over.” – Seth Godin

2. Short pitch

If an investor likes your elevator pitch and wants to hear more about your business idea, they might invite you for a quick meet. This would be the time you cover all the essentials like your products, their USPs, your team, etc.

If the length of your pitch is between 5-10 minutes, it’s called a short pitch. If you’re taking part in a startup competition, your pitch should be no more than five minutes.

3. Long pitch

A long pitch, usually no longer than 20 minutes, provides a bigger picture and is your last chance to persuade an investor. It includes vital info about your company such as financial forecasts, sales, market share estimation, fund request, etc.

If an investor has asked you to present your long pitch, it’s a good sign. It means your idea sparked their curiosity and they’re willing to fund you, but they need a final push to seal the deal.

How to pitch your idea to investors

Going into a meeting with investors without proper preparation is a sure-fire way to get rejected. To stand a good chance at succeeding, there are a few things you need to do. Let’s see what they are.

1. Research the investors

A lot of entrepreneurs tend to pitch their idea to every investor they come across. However, you’re more likely to get funding if your idea resonates with their preferences.

That’s why it’s ideal to research your audience before creating a pitch.

Here are a few things to know about your prospective investors to tailor your pitch:

• Which industries do they usually invest in?
• Which geographical locations do they invest in?
• Do they invest in startups or established companies? What stages are they interested in?
• What is their average investment amount?
• Do their personal values match with yours? Does their investment track record align with your company vision?

2. Create the presentation

A pitch deck is what you send to prospective investors prior to fixing an appointment. Its purpose is to pique their interest and outline what you will cover during your full presentation if given the chance.

A presentation deck is what you use during the full presentation of your idea. It acts as a visual representation of what you’ll be speaking about.  When doing so, it’s recommended to follow the 10/20/30 rule by Guy Kawasaki. It’s a simple technique to make your presentation presentable.

According to it, your presentation:

• Should have a maximum of 10 slides
• Should be shorter than 20 minutes
• Shouldn’t have fonts smaller than 30 points

3. Organize sections

After you’ve pitched your offering, you need to present all the crucial details about your business idea. The goal here is to convey viability, profitability, and scalability.

These are the essentials every business pitch should have:

• Target customers
• Available market and target market sizes
• Marketing and sales plan
• Competitive analysis
• Product-market fit
• Financial plan
• Investment request
• Usage of the funds
• Team

4. Showcase personal values

When investors listen to your pitch, their primary focus is not just on your business idea but also on your personality. This is because a partnership is not only about profitability but also reliability. Investors look for certain qualities in you, your co-founders, and your team to access your company culture.

These are some of the ways they will analyze you and your team:

• What do you stand for as a person?
• How is your relationship with money?
• Do your skills complement your co-founders’ skills?
• How well do you accept feedback and criticism?
• Are your forecasts reasonable or exaggerated?
• Are you aware and concerned about social issues?

5. Tell a story

Humans are wired to remember stories rather than facts. That’s why you should leave enough room for storytelling in your pitch instead of packing it with just facts and statistics. This helps provide your investors with perspective and a chance to engage with you on a personal level.

Once you have their attention, you can add credibility to your story and display competence via facts, statistics, charts, etc. This way, you address both the emotional and the analytical side of the investor.

“Your audience is waiting for your stories. They have memory slots tailor-made to light up and remember you.” – Steve Woodruff

6. Present a roadmap

To make your pitch stand out, present a roadmap of how you envision your business to grow. This will help investors see that you have a growth mindset and have planned ahead to scale your business.

You can convey this through the following:

• Present the goals you want to achieve in the coming years
• State your business risks and your strategy to offset them
• Mention your exit strategy

Tips for creating a business pitch

1. Avoid jargon

A business pitch doesn't need to be exhaustive. Keep it simple, clear, and concise. Unless specifically requested, don’t bother your prospective investors with the details they didn’t ask for. Also, try to limit your use of industry jargon and buzzwords as much as possible since doing that might fuel some misunderstanding.

2. Use realistic projections

Investors want to know how profitable your business is and how you'll steer your business towards growth. You convey this via your financial projections. 

Understandably, it's tricky to make accurate predictions of future revenue and expenses. But you can still estimate and present realistic numbers based on past data and adequate research.

Many entrepreneurs underestimate expenses, but seasoned investors are quick to notice this. So make sure you've considered everything.

3. Use bottom-up forecasts

Estimating future financial performance often comes down to which method you use to get your numbers. While the top-down method is faster, easier, and makes for impressive numbers in pitch meetings, investors are well aware of its fallibility.

Conversely, the bottom-up market analysis method is slower and harder, but yields more concrete and reliable projections. It uses specific parameters to arrive at a general forecast. In a lot of ways, it gives a more accurate picture of your business’s future potential.

4. Practice your pitch

Like we mentioned before, your presentation lasts only 20 minutes and it’s up to you to make the most of this time. So it’s important to practice as many times as necessary to ensure you’re using the time to get your point across accurately and not going off-topic.

5. Carry complementary documentation

If your presentation managed to charm the investors, they will likely ask to see supporting documentation. They may ask for your executive summary, mission statement, or even your entire business plan. Make sure you have these documents ready.

6. Accept feedback and refine your pitch

Regardless of the outcome of your presentation, if the investors have any suggestions, accept them with a positive attitude. If time permits, you can even ask for feedback voluntarily. This way, you’ll be able to refine your pitch for the next prospect.

Score funding with a business pitch

Selling your business idea is an art you need to master if you wish to scale your company. Create a pitch as per your needs to get your point across clearly and accurately. Follow the above steps and tips to create a compelling pitch to motivate investors to lock their decision.

It’s not an easy feat to turn an idea into a business. Although being a solopreneur sounds exciting, it can quickly become overwhelming. You can only ride solo for so long, after which, teaming up with an ideal business partner will become necessary to ensure continued success.

The right partner-up will nurture your business and share your workload. However, it can be challenging to find someone whose personal ethos aligns with yours. In this article, we’ll see how to find business partners and the qualities you should look for.

How to Find a Business Partner?

Every entrepreneur has unique preferences for a business partner based on their vision, personal values, and company requirements. But the process of finding business partner is similar. Here are the eight steps you should follow while searching for a business partner.

Step 1: Refine your business idea

Before looking for a good business partner, make sure that your business idea is attractive enough for someone to hop on board. To do that, it’s a good idea to refine your business plan once in a while to conform to new market trends.

Conversely, if you’re looking for a partner who will help you do all this, it’s imperative to make it clear to the potential candidates. Regardless, it is important to have at least a one-page business plan to present to your potential business partners.

Step 2: Define your requirements

Once you have a solid outline of your business idea, you move on to listing down your preferences for your business partner. Here, there are two things to consider:

1. Compatibility with your business: Depending on your business idea, your requirements change. For instance, if you plan on starting a SaaS company, you need a partner who has adequate knowledge in that particular field.
   
   Further, your requirements also depend on the stage where your company is. If you're an established company, you would be looking for a partner who has enough experience in the industry rather than a young entrepreneur.


2. Compatibility with you: It is ideal to have some similarities and differences between you and your partner to make you a balanced team. Simply put, your partner should complement your strengths and offset your weaknesses.

"Fight for the things that you care about, but do it in a way that will lead others to join you." – Ruth Bader Ginsburg

Step 3: Build your online presence

Just as keen as you are to know everything about your business partner, they would be too. This is why you need to have a credible online presence for your potential business partners to learn about.

You can build your online presence via a dedicated website and by remaining active on platforms like LinkedIn, Instagram, Twitter, etc. These will help potential candidates to discover you on the internet, verify your identity, and further contact you.

Step 4: Get the word around within your network

One of the easiest ways to attract potential candidates is by letting your online and offline network know that you are looking for a business partner. You can use your contacts to get referrals to connect and converse with interested candidates.

On top of that, talking to your fellow entrepreneurs helps you know how they found their business partners. By talking to multiple people, you can create a knowledge pool and choose ways that you think can work the best for you.

Step 5: Begin the search

Once you have a business plan, a solid online presence, and have put the word out in your circles, you can start looking for a business partner at these places:

1. Within your industry: You can find like-minded people in business conferences, entrepreneurial communities, workshops, courses, etc. Whenever you’re a part of them, always be on the lookout for capable candidates.


2. Colleagues: Choosing a business partner from your coworkers can be a great idea. As you have experience working with them in the past, you can be sure that you will get along well.


3. Online: Search within your network, hire headhunters, scan recruitment portals, etc.


4. Friends and family: You can find a business partner within your friends and family circle too. Although the partnership dynamics may affect your relationship and vice-versa, this is also an option to consider.

Regardless of where you search, make sure to keep in mind all the requirements you have jotted down in step two.

Step 6: Analyze potential candidates

Once you've identified a few potential business partners, inquire about them as much as possible. This will help you verify their identity, their credibility, understand their expertise in your industry, and review their work history.

If you think someone is competent enough, set up an interview to get to know them as a person. Having multiple conversations with your potential partner can help you understand their values and beliefs, and their overall outlook towards business and life in general.

Step 7: Test compatibility with a trial period

After the interviews, if you have found someone who fits your needs, set up a trial period. While things might look all fine and dandy on paper, anything can go wrong in reality. Hence, this step is crucial to ensure your partnership will stand the test of time. 

A trial period will help you:

• Understand the dynamics of the relationship
• Review their skills and expertise in person
• Evaluate the value they add to your business
• Avoid the risk of choosing the wrong partner

Step 8: Finalize partnership terms and sign an agreement

After the trial period, if you feel the partnership is beneficial and sustainable for you and your company, you can seal the deal by signing an agreement. Here, you draft all the terms and conditions of the partnership.

Your partnership agreement should include the following:

• Name of the partnership
• Term of the partnership
• Purpose of the partnership
• Roles and responsibilities
• Percentage of ownership
• Division of profit and loss
• Decision-making power
• Conflict resolution
• Exit strategies

6 Qualities to Look for in Your Business Partner

A business partnership is often compared to a marriage, and rightly so. This is because in both cases, the parties involved function as a team, their actions affect the other person, and their finances are interdependent. 

Therefore, it’s crucial to find a partner who is a good fit for your personality and vision. While choosing a partner, look for the following qualities:

1. Similar beliefs and entrepreneurial spirit

Having a partner who understands your beliefs and your way of doing business is paramount. If you and your partner are not on the same page, it can be challenging to make decisions. This can create instability in management and hinder your company’s growth.

2. Different perspective

While having a similar vision is vital, it is necessary to have contrasting perspectives in a partnership. If you and your partner always agree on everything, there might be a chance you are overlooking alternate ways of approaching a problem.

Find someone who understands your methods but also suggests better options when appropriate to help you look at things in a different light. This will broaden your opportunities and increase your chances of success.

3. Complementary skills

Entrepreneurs often have expertise in multiple skills. However, it is unlikely that a person could know everything a company needs. Hence, it is essential to choose a partner who has the skills you lack.

For instance, if you're an expert in marketing and finances but struggle with interpersonal skills, find a partner who can compensate for that deficit.

4. Strong social network

Choosing a partner who has a strong personal brand and is a part of multiple social circles can help your business get more exposure. It can also increase your client base, strengthen your company’s brand, and make it more likely to get funding from investors.

5. Financial stability and few personal obligations

It’s crucial to consider how your partner’s personal life will affect you and your business. If they have a bad relationship with money and are in debt, they can't fully contribute to the partnership and may prove to be a burden. Remember, someone with a poor credit score is not an ideal candidate.

6. High-risk tolerance

Taking a risk is inherent for any business, more so if you are a startup. Often in businesses, you need to make bold decisions even when a positive outcome is not obvious. If your partner is reluctant to make such decisions, you might lose potential opportunities.

Choose the Right Business Partner to Grow Your Business

It’s far too common for an entrepreneur to have too much on their plate, and it can be discouraging at times to keep going. A good partner could reduce the burden and help you get through difficult times. While exciting, this process is better done without any rush. 

Interview multiple people, verify their identity and expertise and set up a trial period to ensure compatibility before choosing a partner. Handpick a compatible partner to increase your chances of success and achieve challenging goals.

If you are a young entrepreneur, you probably have a lot of questions about various business terms that big businesses seem to mention so often. While some are trivial and easy to understand, others can be confusing.

Two of such terms that are sometimes mistakenly interchanged are business model and business plan. Although they sound similar, they are not the same. Let’s see what they mean, their differences, and their types.

What is a business model?

A business model is a mechanism that directs how you create, deliver, and attain value in the market; it’s the profit-generating plan of your company. Simply put, it’s how you sell your product to make money.

It includes:

• Defining your offerings
• Identifying and describing your target audience
• Stating your sales strategy
• Predicting expenses along the way

 Don't find customers for your products, find products for your customers. – Seth Godin

What is a business plan?

A business plan is a document that outlines your entire business operations. From product launches to setting milestones to planning an exit strategy, it includes every step of your business journey. It says what a company does, its vision and goals, and its strategies to achieve them.

Your business plan includes these sections:

• Executive summary
• Company overview
• Mission statement
• Vision statement
• Problem statement
• Products and services
• Market analysis
• Customers analysis
• Competitors analysis
• SWOT analysis
• Marketing and sales plan
• Operations plan
• Financial plan
• Appendix

Comparing business model and business plan

While your business model indicates how you make money, your business plan sets a roadmap of your business's future. To understand how they differ, let’s compare them based on focus, benefits, and process.

1. Focus

Your business model focuses on optimizing the internal and external operations of your company to earn maximum profits. It explains your relationship with dealers, distributors, service partners, customers, and target audience. 

Conversely, your business plan focuses on how you set goals, create strategies, make predictions, and manage labour to sustain and scale your business. It also outlines your relationship with your customers, competitors, industry, and the market.

2. Benefits

Adopting the right business model(s) helps you:

• Gain competitive edge
• Ensure sustainability and scalability
• Protect stakeholders’ interest
• Inspire trust in investors

Writing a great business plan helps you:

• Test the viability of your business idea
• Acquire funding
• Identify market gaps and threats
• Organize and plan business processes
• Forecast financial estimates and market trends
• Create strategies to achieve objectives
• Plan for an exit

3. Process

While adopting a business model, you:

• Aim to receive validation from prospective customers
• Modify assumptions to match customer preferences
• Focus on the current financial position

While creating a business plan, you:

• Aim to find factual information through research
• Support assumptions through data from customer analysis
• Focus on the current and future financial position

Types of business models

There is virtually no limit to how many business models there can be since new models are created all the time. Here are some of the most recognizable business models:

• Brick-and-mortar
• Bricks-and-clicks
• E-commerce
• Razor and blade
• Premium
• Freemium
• Subscription
• Franchise
• Advertising

If you feel none of the above business models suits your vision, you can build a custom business model for your company via business model innovation.

A tool that can help in this process is a business model canvas. It includes nine key elements that help you create a business model. These are:

1. Customer segments: Who are you selling your product to? Identify the top three revenue-generating segments in the market.


2. Value proportion: How are you solving your customer's problem? Describe the product or service you are offering.


3. Revenue streams: How do you receive payments for your offerings? Think advertisements, direct sales of products, etc. List your top three revenue streams.


4. Channels: How do you reach your customers and sell your offerings? Think stores, wholesalers, door delivery, etc.


5. Customer relationships: How do you communicate with your customers? How do you offer support? Think self-service, personal assistance, telephonic support, etc.


6. Key activities: What are your daily business activities? State the activities that are vital for operating your business.


7. Key resources: What do you need to run your business? List all the physical, financial, intellectual, and human resources you need. For instance, a SaaS company needs human expertise, equipment, etc.


8. Key partners: Who are your business partners? What are their responsibilities? What are the activities only they can do?


9. Cost structure: What are your key costs? Considering your activities and resources, list your important expenses. Do you follow a cost-driven structure or a value-driven one?

Types of business plans

Before you start writing a business plan, you should pick the right one that’s based on your unique needs. Some of the most recognizable types of business plans are:

1. Traditional business plan: This is a detailed 40-page business plan. It is ideal if you want to record all your business activities without leaving anything up for assumption.


2. Lean business plan: This is half the size of a traditional business plan and is common among most modern-day businesses.


3. SBA business plan: This is a specific business plan that banks and investors require you to submit if you are looking for funding.


4. Startup business plan: This plan includes all the steps you need to take before and during establishing your startup.

Make money and plan ahead to grow your business

Running a company requires you to use as many business tools as possible to maximize your chances of success. Granted, sometimes the purpose of some of these tools is not obvious.

Although some functions of a business model and a business plan do overlap, you cannot replace one with another. Both focus on different outcomes and are must-haves in your business arsenal.

Starting and running a business can be financially demanding. And not all of us have the funds that we need to put in for starting and expanding one or even to get through tough times.

But at the same time, finances should be the last reason that deters you from having your own business in today's day and age.

Even if you don't want to take a traditional business loan, there are several startup business grants and schemes both from the government and private organizations that can help your business. 

The schemes also vary based on the size, type, and stage of your business. 

You can look into all the different schemes before you pick the one that's the best for you. But before that, you'll need a business plan to help you convince the organization or individual that your business idea is valid and would work.

There might be some other special requirements depending upon the scheme you apply for.

In this article, we'll discuss a few common grant schemes, who are these for, and their pros and cons.

Coronavirus small business grants

These schemes were started by the US government in response to the coronavirus pandemic to support small businesses, nonprofits, and other similar organizations through the pandemic.

Some of them are as follows:

1. Shuttered Venue Operators Grant:

This grant has been introduced specially for performing art centers and theaters that had to remain shut during the pandemic. It consists of a sum of $15 billion and has started accepting applications since April 8th. It is for businesses that have been running since before Feb 29, 2020.

2. Targeted Economic Injury Disaster Loan Advance:

The SBA provides EIDL advances up to $10,000 to small businesses that are facing difficulties due to the pandemic. It comes under the government's grant scheme and does not have to be repaid.

3. Restaurant Revitalization Fund:

As the name suggests, this fund was started to revitalize restaurants and eateries which have lost revenue due to the COVID-19 pandemic. 

• Pros: These funds provide great relief to small businesses and act as a stimulus for reviving the economy.


• Cons: They have very limited funds and can only help businesses that have existed before the pandemic. Also, they don't cover a lot of industries.

Government Grants

The government provides several grants for the development and expansion of small businesses through SBA. These are also given for bringing about technological advancements and innovation in the industry. 

A few common government business loans are as follows:

1. NIDILRR's SBIR program:

This program has been introduced to support technological, social, and economic advancements that help the country. It backs national disability funds to help provide funds for people with special needs.

2. Small Business Innovation and Research Program:

This grant is provided so that you can contribute to technological development and commercialize your project going forward. It is highly competitive and given based on technical merit. The primary requirement for this grant is to have a for-profit business. 

3. Small Business Technology Transfer Program (STTR):

Just like the above program, the government provides funds to research-related businesses through this program as well. But apart from being a for-profit organization, your business needs to have a tie-up with a research organization. 

Government business loans are a great way of getting started if your business brings about some sort of commercial benefits to the country.

• Pros: Helps you innovate through business and lets you carry out research and development work without worrying about funds.


• Cons: You need to have a for-profit business for a lot of schemes and it involves complicated paperwork and technicalities. 

General Small Business Grants

Apart from the government, several non-government organizations and corporates provide startup business grants and loans to small businesses. It is usually done as a way of giving back to the community or for standing behind a cause.

A few of them are as follows:

1. Walmart Local Community Grants:

Through this fund, Walmart intends to support local small businesses by giving grants ranging from $250 to $5,000. The deadline to apply for the same is 31st December 2021.

2. 500 Global Flagship Accelerator Program:

This program provides funds to startups and small businesses on a year-round basis. The best part is it provides you with a four-month accelerator program, in addition to $1,50,000 of funds. This fund has been running since 2010 and the details to apply for the same can be found on the company's official website. 

3. Hello Alice Small Business Growth Funds:

If you need funds in 2022, Hello Alice might be the right choice for you. They will be offering funds up to $5000 to small business owners through Hello Alice Small Business Growth funds during the next year. Further details about the application procedure and other requirements can be found on their website. 

Corporates support a variety of businesses and can become a good source for you to acquire startup business grants.

• Pros: Many programs offer good amounts of grants as well as mentorship programs to help your business.


• Cons: Just like government business grants there's high competition to get these funds.

Group-Specific Grants

If you belong to an underprivileged segment or there are people in your community who provide loans and grants, you can look into them too. As these grants are open to fewer people, it is easier to get them.

Here are a few of those:

1. Grants for women: Here's a list of websites and organizations that give grants especially to women:

• The girl boss foundation grant
• Grants.gov
• Women's Business centers
• Amber Grant

2. Grants for veterans: Here's a list of organizations that give business grants to veterans:

• Boots to business
• Institute for Veterans and Military Services
• Military Reservist Economic Injury Disaster Loan

3. Grants for minorities: Here are a few organizations that introduce grants and programs especially for minorities:

• Grants.gov
• The USDA rural business development grant program
• National Association for the self-employed
• FedEx Small business grants
• Minority Business Development Agency

If you belong to any of these groups you can look into these options for funding your business. 

• Pros: These schemes and programs have lesser competition compared to the general grants and schemes.


• Cons: Most of them, especially the ones for minorities and veterans would require paperwork to prove that you belong to that group. 

Summary

In conclusion, there are several schemes and services present to help startups and small businesses that need startup business grants to set up and grow their business. These organizations have a transparent and clear application process that can be found on their respective websites.

If your business meets the criteria you can apply for these grants to fund your business. The best part of funding your business with these grants and loans is that you either don't have to repay these or get funds at a lower rate of interest than you normally would.

There's only one condition, that you have a good business idea and a strategic plan to make it real. All the other things, (at least the finances) can be taken care of in several ways.

Capital is the lifeblood of any business. From building a startup to sustaining an MNC, your business model affects every decision you take. It's one thing to have a great business idea and a whole other thing to turn it into a long-term profitable mechanism.

In this article, we'll see what is a business model, factors to consider when choosing one, and 15 of the most successful business models to look into.

A business model answers these six important questions:

• Who is your target audience?
• What are you planning to offer them?
• How are you going to market your offerings?
• What are the costs involved?
• What is your pricing strategy?
• What are your revenue streams?

Which Business Model should You Choose?

A few things to consider while choosing a business model are:

• Consumer buying behaviour: Analyze the actions your target audience takes before making a purchase. For instance, watching YouTube reviews before buying a smartphone or scrolling through Instagram before buying shoes.

• Costs: Understand the costs involved in developing, marketing, and delivering the solutions you intend to offer.

• Flexibility: As your business grows, the business model you opted for needs to adapt to your changing business environment.

• Competitors: An easy fix is to copy your rival’s business model if they have proven to be successful. However, this doesn’t give you any competitive edge and leaves you vulnerable to the same risks as them.

• Industry leaders: Examine the business models used by leading brands even if they’re from other industries. You can tweak their models as per your needs to pioneer a new model in your industry.

15 Types of Business Models with Examples

1. Brick and mortar

Brick and mortar is a traditional business model. Any business that sells its products directly in physical stores or offices uses this business model.

While this business model has been the standard for ages, the rise in internet access has led to an increase in online stores—negatively affecting physical counterparts.

Examples: grocery stores, restaurants, coffee shops.

2. E-commerce

The polar opposite of the brick-and-mortar model is the e-commerce business model. It is opted by companies that sell their products or services on the internet via e-stores.

Since these businesses operate virtually, they don’t need a physical outlet. Over the years, e-commerce has transformed how people shop, making it convenient, easy, and seamless for consumers.

Examples: Shopify, Alibaba, PayPal.

3. Bricks and clicks

A hybrid of the above two is the bricks and clicks business model. Companies that use this model sell their products online as well as in physical stores.

Many traditional brick-and-mortar businesses have started selling online to steal a piece of the e-commerce pie. Conversely, e-commerce companies are setting up physical stores to increase visibility and brand loyalty.

Examples: Zara, Walmart, Amazon, Target.

4. Manufacturer

The manufacturer business model refers to the companies that use raw materials to produce goods or assemble parts to create finished products. These companies either sell directly to customers or intermediaries.

Examples: Toyota, General Motors, Samsung, LG, Sony.

5. Wholesale

Wholesalers buy large quantities of finished products from manufacturers and sell them to multiple retailers or distributors in smaller quantities. They are a key intermediary in the supply chain. 

Examples: Costco, Walmart, Johnson & Johnson.

6. Retail

Retailers are the last intermediary in the supply chain. They buy products from wholesalers, distributors, or even directly from the manufacturers and sell them to consumers. 

Nowadays, there are many businesses and individuals who make money through Amazon, for example, while also using many of its benefits.

Examples: Target, The Home Depot, Best Buy, Casper.

7. Subscription

The increasingly popular subscription business model allows companies to charge their customers a recurring fee for continual benefits. Think SaaS companies and subscription box companies.

Examples: Netflix, Disney+, Amazon Prime Video, FabFitFun, BirchBox, Dollar Shave Club.

8. Freemium

The freemium business model is quite similar to a subscription model. Except, it includes a free version on top of the paid service. The latter is usually displayed as a premium variant.

For instance, Hulu offers a 7-day free trial while Spotify offers a free version that can be used indefinitely. 

Examples: MailChimp, Evernote, LinkedIn, DropBox.

9. Franchise

In this model, a franchisor company grants the rights over its brand identity, intellectual rights, and resources to a franchisee company in exchange for a fee called royalty.

For instance, McDonald’s permits its franchisees to run their restaurants under its brand name. In exchange, the franchisee pays an initial fee and a cut of the revenue incurred.

Examples: Subway, Domino’s, UPS Store, Coca-Cola, Nestlé, Hyundai.

10. Razor and blades

The name ‘razor and blades’ comes from the pricing tactic used by the popular Boston-based company Gillette. The company sold its razor handles at a lower price to increase the sales of its razor blades.

In a nutshell, companies sell a primary ‘razor’ product at a low margin to boost the sales of its complementary ‘blade’ products which are sold at a high margin. 

Examples: Microsoft Xbox, Sony PlayStation, Nespresso.

11. Reverse razor and blades

Contrary to the above, in the reverse razor and blades business model, companies sell the primary ‘razor’ product at a high margin and sell complementary ‘blade’ products at a bargain.

For instance, Amazon sells the Kindle Paperwhite at a high price because it allows buyers to further purchase ebooks at a discounted price. 

Example: Apple sells iPhones at a premium price and allows users access to affordable complementary services like Apple Music and App Store.

12. Advertising

Advertising is one the oldest business models wherein an advertiser pays to get their product promoted on a publisher’s platform. Earlier, this used to be limited to newspapers, magazines, and storefronts.

Today, advertising is a highly saturated business model covering platforms such as social media, video games, job portals, billboards, email, mobile apps, etc. 

Examples: Google, YouTube, TikTok, Meta, Twitter, LinkedIn.

13. Crowdsourcing

In this model, a company solicits contributions like ideas and services from a crowd of unaffiliated providers. These contributions are then pooled into a unified platform controlled by the company to create something of value.

There are multiple types of crowdsourcing but perhaps the most recognizable one is used by Wikipedia. Here, volunteers contribute to create and add value to the platform accessible to everyone. The hosting company, Wikimedia Foundation, makes money via donations.

Example: McDonald’s asked fans to create new burger recipes under its “My Burger” campaign. The most acclaimed ones were then added to the menu to try and increase sales.

14. Hidden revenue model

All social media companies use the hidden revenue model. Unlike other models, this business model allows companies to offer their products to consumers for free—concealing their revenue.

Instead, they make money via third parties in the form of advertising. This helps keep the product free to use or subsidized enough to be available at a very low price.

Examples: Google, YouTube, TikTok, Facebook, Twitter, LinkedIn.

15. Peer-to-peer

In this model, companies provide a platform for two parties to collaborate or make transactions. The company acts as a middleman overseeing the trade by establishing regulations to reduce the risks for both parties.

A perfect example is Airbnb; it allows hosts to rent out their properties to hostees. The company makes money via commission from both parties.

Examples: Uber, Freelancer, OLX, Craigslist.

Actualize Your Potential with a Tailored Business Model

Choosing the right business model can be quite tricky since there’s so much at stake. However, with adequate research and testing, you can be sure to find a model or combination of models that work the best for you.

Opting for a business model that has a proven track record can be a safer choice if you’re unsure of your startup’s viability. Although, if you’re willing to take some risk, creating a new model or tweaking existing ones can prove to reap more profits eventually

As your business grows from a scrappy startup to a mature company, you will need more high-profile clients to achieve desired revenue. While in the past you might have made deals over the phone or in person, that won’t be enough after a certain level.

Let’s say you come across a client with a big budget who’s looking for a solution you offer. How do you approach them? What should you say? How do you make sure to grab their attention?

Luckily, this is exactly what a business proposal is for. Let’s see what it is, why you need it, its different types, and how you can write one yourself for your next big client.

1. Solicited business proposal

A solicited business proposal is when a client requests the document from you directly. This means they are interested in knowing more about your services and are actively seeking to hire talents like you.