As technology has taken over the marketplace with ecommerce many entrepreneurs decide to begin there journey with an online business. It makes sense; online businesses are attractive options due to the gaining popularity of ecommerce among consumers across the globe. And, in most cases, online businesses require less capital investment as compared to traditional models, especially stores selling goods. However, it is not without a justifiable amount of seed money that you can start and online business, it does require its share of capital. This article discusses how to understand you’re the financial requirements of your online business idea and subsequently raise the funds needed.
The business plan
The entire saga begins on paper with a watertight business plan. A well researched and carefully drafted business plan will help you understand the real requirements of your online business. Once you start penning down the details, you will be surprised at the number of revelations a business plan surfaces. Many new factors will come forward and you will become better prepared to take on the challenge.
You must include every facet of your business in the plan and take the pain to make each sectioned meticulously detailed. Special focus must be given to the financial section for that is where you will determine how much money you plan to invest and what are the revenues you are aiming at. This section will also be the first one your potential investors will scrutinize.
Roping in the Investors
Unless you have existing sources of steady incomes that generate extra cash, you will need to approach funding sources or lenders in the market. Banks are usually more interested in funding traditional businesses over virtual ventures. However, this trend is slowly changing and some banks are considering online businesses for loans. It is a difficult option but also one which shouldn’t be ignored.
Your friends and family can be a great source of funding if they are willing to show confidence in your ecommerce plan and back it up with their money. Don’t for a moment think that a smile and familiarity will get you through to their bank accounts; the only way is to present a solid business pan with exact future projections.
Other more professional lenders include angel investors, venture capitalists, peer and peer lenders. These lenders can we found through the internet and funding is again based on the promise that you business plan brings to the table. These types of investors are usually fully involved in the business they invest in, as a result, their levels of interest in you plan and projections will be much higher than your acquaintances. Some might loan the money to you on interest while most will be looking for a stake in the business.
Whoever you approach you will need to be presentable and show credibility. Any financial source who will bet his money on you and your business plan will need to know that they are going ahead with a trustworthy person and a feasible business plan. It is your job to portray these requisites and get your funds releases.
About the Author: Penny, the author, is an expert associated with Ezbob.com, an online financial solution for that provides instant business loan to e-commerce and other online traders for their working capital and operational expansion requirements.