Checklist for Starting a Bounce House Business: Essential Ingredients for Success
If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a Bounce House business. This will allow you to predict problems before they happeen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!
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A Step by Step
Guide to Starting a Small Business
This is a
practical manual in a PDF format, that will walk you step by step through all the
essential phases of starting your Bounce House business. The book is packed with
guides, worksheets and checklists. These strategies are
absolutely crucial to your business' success yet are simple and
easy to Apply.
Copy the following link to your browser and save the file to your PC:
https://www.bizmove.com/free-pdf-download/how-to-start-a-business.pdf
How to Raise Venture Capital Money
Venture capital financing is a method
used for raising money, but less popular than borrowing.
Venture capital firms, like banks, supply you with the funds
necessary to operate your business, but they do it differently.
Banks are creditors; they expect you to repay the borrowed
money. Venture capital firms are owners; they hold stock
in the company, adding their invested capital to its equity
base. While banks may concentrate on cash flow, venture
capital firms invest for long-term capital. Commonly,
these firms look for their investment to appreciate three to
five times in five or seven years.
One way of explaining the different
ways in which banks and venture capital firms evaluate a small
business seeking funds is: Banks look at its immediate future,
but are most heavily influenced by its past; venture
capitalists look to its longer run future.
To be sure, venture capital firms and
individuals are interested in many of the same factors that
influence bankers in their analysis of loan applications from
smaller companies. All financial people want to know the
results and ratios of past operations, the amount and intended
use of the needed funds, and the earnings and financial
condition of future projections.
But venture capitalists look much
more closely at the features of the product and the size of the
market than do commercial banks.
What Venture Capital Firms Look
For
Banks are creditors. They're
interested in the product/market position of the company for
assurance that this product or service can provide steady sales
and generate sufficient cash flow to repay the loan. They
look at projections to be certain that owners/managers have done
their homework.
Venture capital firms are owners.
They hold stock in the company, adding their invested capital to
its equity base. Therefore, they examine existing or
planned products or services and the potential markets for them
with extreme care. They invest only in firms they believe
can rapidly increase sales and generate substantial profits.
The reason for this is that venture capital firms invest for
long-term capital, not for interest income. A common
estimate is that they look for three to five times their
investment in five or seven years.
Of course, venture capitalists don't
realize capital gains on all their investments. Certainly
they don't make capital gains of 300 to 500% except on a very
limited portion of their total investments. But their
intent is to find venture projects with this appreciation
potential to make up for investments that aren't successful.
Venture capital is risky due to the
difficulty of judging the worth of a business in its early
stages. Therefore, most venture capital firms set rigorous
policies for venture proposal size, maturity of the seeking
company, management of the seeking company, and "something
special" in the plan that is submitted. They also have rigorous
evaluation procedures to reduce risks, since their investments
are unprotected in the event of failure.
Size of the Venture Proposal.
Most venture capital firms are
interested in investment projects requiring an investment of
$500,000 to $5,000,000. Projects requiring under $500,000
are of limited interest because of the high cost of
investigation and administration; however, some venture capital
firms will consider smaller proposals if the investment is
intriguing enough.
The typical venture capital firm
receives over 400 proposals a year. Probably 90% of these will
be rejected quickly because they don't fit the established
geographical, technical or market area policies of the firm - or
because they have been poorly prepared.
The remaining 10% are carefully
investigated. These investigations are expensive.
Firms may hire consultants to evaluate the product, particularly
when it is the result of innovation or is technologically
complex. The market size and competitive position of the
company are analyzed by contacts with present and potential
customers, suppliers, and others. Production costs are
reviewed. The financial condition of the company is
confirmed by an auditor. The legal form and registration
of the business are checked. Most importantly, the character and
competence of the management are evaluated by the venture
capital firm, normally via a thorough background check.
These preliminary investigations may
cost a venture firm between $2,000 and $3,000 per company
investigated. They result in perhaps ten to fifteen
proposals of interest. Then, second investigations, more
thorough and more expensive than the first, reduce the number of
proposals under consideration to only three or four.
Eventually, the firm invests in one or two of these.
Most venture capital firms'
investment interest is limited to projects proposed by companies
with some operating history, even though they may not yet have
shown a profit. Companies that can expand into a new
product line or a new market with additional funds are
particularly interesting. The venture capital firm can
provide funds to enable such companies to grow in a spurt rather
than gradually as they would on retained earnings.
Companies that are just starting or
that have serious financial difficulties may interest some
venture capitalists, if the potential for significant gain over
the long run can be identified and assessed. If the
venture firm has already extended its portfolio to a large risk
concentration, they may be reluctant to invest in these areas
because of increased risk of loss.
Although most venture capital firms
will not consider a great many proposals from start-up
companies, there are a small number of venture firms that will
do "start-up" financing. The small firm that has a well
thought-out plan and can demonstrate that its management group
has an outstanding record (even if it is with other companies)
has a decided edge in acquiring this kind of seed capital.
Most venture capital firms
concentrate primarily on the competence and character of the
management. They feel that even mediocre products can be
successfully manufactured, promoted, and distributed by an
experienced, energetic management group.
They look for a group that is able to
work together easily and productively, especially under
conditions of stress from temporary reversals and competition
problems. Obviously, analysis of managerial skill is
difficult. A partner or senior executive of a venture capital
firm normally spends at least a week at the offices of a company
being considered, talking with and observing the management to
estimate their competence and character.
Venture capital firms usually require
that the company under consideration have a complete management
group. Each of the important functional areas product
design, marketing, production, finance, and control - must be
under the direction of a trained, experienced member of the
group. Responsibilities must be clearly assigned. And, in
addition to a thorough understanding of the industry, each
member of the management team must be firmly committed to the
company and its future.
Next in importance to the excellence
of the management group, most venture capital firms seek a
distinctive element in the strategy or product/market/process
position of the company. This distinctive element may be a
new feature of the product or process or a particular skill or
technical competence of the management. But it must exist.
It must provide a competitive advantage.
Getting the Cash Needed to Starting a New
Small Business. Now that You have calculated your first capital
requirements, where will
you get the money? The first source
is the personal savings. Then relatives, friends, or other
individuals may be found who are
willing to"enterprise" their
savings in your company. Before getting too big a share of cash
from external sources, remember that
you should have personal
control of sufficient to guarantee yourself possession.
After you can show that you have closely exercised your fiscal
Requirements and can demonstrate experience and ethics, a
financing
institution may be willing to finance a part of
your working needs. This may be done on a short term basis of
from 60 days to up
to one year. Any institution that has
money to give is primarily concerned with safety. The safety
might be a business advantage,
but when you're just starting
the best safety is usually your house or any other private
advantage.
The second thing that the lender will want to
see is Some Kind of Business plan. If you complete a business
strategy - which
includes a cash flow forecast - that the
lender will observe you have done some realistic and serious
thinking about your company
and be more inclined to consider
your request.
Be familiar with your banker. In picking a
banker consider Progressiveness, attitude toward your business,
credit services
provided, and also the dimensions and
management policies of the bank. Is your bank progressive? The
physical appearance of this
bank may provide you some
indication. When the employees are pretty youthful, considering
your problems and active in civic
affairs that the lender is
very likely to be progressive. The character of the lender's
advertisements might also be a clue for
its progressiveness.
To be effective the banker Ought to Be interested in
helping you to Become a better manager, and build a continuing
relationship
which will mean profitable business for you as
well as the lender through time.
Will the bank give you
the type of credit you want? For example, If seasonal
accumulations of inventory become a problem will the
bank
create a loan against public or field warehouse receipts? If
your capital is tied up in accounts receivable during your heavy
selling season, will the lender accept these receivables as
collateral for a loan? Will the bank contemplate a term loan?
Finally, know the size and direction policies of the
lender. Will Your maximum requirements fall nicely within the
lender's"legal
limit"? If you plan to do some export
business, does it have a foreign exchange department? If you or
your traders sell on
installation terms does the lender have
facilities for managing installment paper? How deeply is the
bank concerned with the rise
and prosperity of your regional
community?
When you handle your banker, then sell
yourself. Whether or not you Need a bank loan, also make it a
practice to stop by your
banker at least once a year. Openly
discuss your strategies and problems. It's the bank's business
to not betray a confidence. If
you require financial aid
carefully organize, in written form, complete information that
will present a comprehensive
understanding of your whole
proposal. Many business-people or prospective small business
operators destroy their chances of
obtaining financial aid by
failing to present their proposal correctly.
Trade
creditor or gear manufacturer, Companies from which you Buy
equipment or merchandise may also furnish capital to you in the
kind of extended credit. Producers of store fixtures, cash
registers, and industrial machines frequently have funding plans
under
which you might buy in an installation basis and cover
from future income. You need not pay for the merchandise
simultaneously. If
products are for resale, no security other
than repossession rights of these unsold goods is involved. But
too extended a use of
credit can prove expensive. Usually
cash discounts are quoted when a bill is paid within 10, 30, or
60 days. By way of example, a
term of sale offered
because"2-10; net 30 days" signifies that a cash discount of two
percent will be granted if the bill is paid
within 10 days.
If not paid in 10 days, the whole amount is due in 30 days. If
you do not take advantage of the money discount,
you're
paying 2 percent to use money for 20 days, or 36 percent per
year. This is high interest. Avoid it.
One of the main
causes of failures among companies is Inadequate financing.
Should you go into company, remember it is your
obligation to
provide, or obtain from others, adequate money to supply a firm
foundation for your business.
Sharing Ownership With
Other People. Now that you have determined what Company to begin
and how much funds will be required, you
might find it
necessary to connect with one or more associates to launch the
enterprise.
If you lack specific management or technical
skills which are of Major importance to your chosen business a
spouse with these
skills may prove a most satisfactory means
to pay the deficiency. If you are extremely skilled in your
special area but lack
management training and skills, you
might look for a partner with a background in direction. If you
may want more startup money,
sharing the ownership of this
company is one way to obtain it. Fantastic care ought to be
taken in deciding upon a partner.
Personality and character,
as well as ability to render financial or technical aid,
influence the success of a pa333ship.
A partnership can
be a mixed blessing. A partner who puts in time Or cash has a
right to expect a share in conducting the
business.
In a venture the liability for the debts of the firm is
Unlimited, as it's in one proprietorship. Therefore, the owners
are
Personally accountable for the company's debts, even in
excess of the sum they Have spent in the business. In a
corporation the
accountability of the proprietor is Limited
To the amount they pay for their shares of stock. A partnership,
like a single
proprietorship, lacks continuity. This means
the business terminates upon the Death of the proprietor or a
partner, or on the
withdrawal of a spouse.
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