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Why To Launch a New Business

Posted in Consulenza Finanziaria

Is now a good time to launch a new business? The most obvious reply is no, considering the economic crises, but in the current bad time, to fund a startup, count only your own capitals. In the past the economic recession were overturned introducing credit system, to promote startup and help old companies in re-launching the business waiting on future better time. The current recession is different, it starts from banks, and finding credits for startups is more difficult. For a successful startup you will count only your own capitals, and a step by step grow, through the sales given by a well managed business. To reduce costs, you could establish an homebased business.

It’s time to evolve: where and why to invest

It’s time to evolve. The business methods used in the past cannot work in recession times. During bad time, large companies management order to improve operations and cut costs where possible, but this recession is different from other crises, and a firm won’t survive without changing the current business model.

Starting a business now

In the middle of a recession, is different from starting a business during good economic times. But it could be difficult for small startups raising capitals. During economic crisis, it is good time to rethink your life and business. everyone says: “It is hard to find customers”, but it is really the truth for any ordinary company.
Be confident, bear market conditions create more opportunities, think that people are just looking for innovative goods that match a new lifestyle. Usually the best policies are set in bad time.
Companies that suffer more during bad times, haven’t built their fortune on strong foundation, but through bad financial policies risks, mergers and acquisitions. if you create a unique value business, you aren’t simply a manager, you will know the every aspect of the business, and you will run the company, better than a manager called to manage a business based upon another’s idea.

There are many copycat businesses, but “copies” have just few chances for survival in bad times, due to managers cannot have a general view of the business, and don’t have skills to quickly adapt the business to market changes. Before starting your own business, read the following things to do to ensure your business a successful start. for a successful business think of a business that integrates with your life style, you must be always passionate about what you do.

Essentials to do:

• Take time to re-examine your business model, products and processes
• Examine your business identifying yourself in one of your client. Do you aspect higher performance from your products?
• Talk to your clients to know their needs, and find a solution to satisfy them
• Try to cut costs and check if you can add new products at no costs

Don’t do:

• Don’t be seated. If the economy change, your business must change too
• Don’t stop dreaming, always try new things and create new markets
• Don’t close. Visit suppliers, and distributors in person, talk to them and supervise their business too
• Don’t stop advertising your products, you must be in touch with your clients more than in the past

Do you have enough experience to manage this business? Be sure that the market is large enough for a new company, write a business plan, raising capitals involving your friends, business associates and joint venture partners never operate beyond your financial means. Review your plan on a regular basis always adapt your business to the changes in demand large corporations are slaves to market fluctuations, because business owners are not entrepreneurs, they are managers. Managers usually live in a golden world, too far from their customers to know and to adapt the company policy to the market changed. When they realize that the market is changed, it is too late and the company is already failed.

Finance Business & Startup: how to find capitals

If you have used personal savings to startup, and you realize that it’s a good time to grow your business, you can easily find some individuals willing to finance your business. Keep a record of all your activities, storing all the documentation. Another way of having more cash is to approach supplies or materials opening a line of credit with them, using flexible terms of payment. Before asking for money, make a plan to justify the expansion and scheduled time for refunding.

Investors like innovators, and provide capitals to any entrepreneur who wants to turn his business ideas into an high profit company. Here are some guidelines about the general criteria investors decide which company will be financed:

• To run a prosperous business, the company must produce wonderful products or deliver innovative services to a large numbers of customers
• If an investor is happy with performance of your company, he will easily finance a similar business in the future
• High quality fast growing companies, mostly involved in technology, are the favorite firms from investors who like to take some risks
• Traditional business services are financed from people who prefer to get less earnings, but taking very limited risks
• Investors prefer to finance companies that have the chance to become very significant

The New Economic Indicators

To know when the recession will end, forget the usual economic forecasts, pay attention on vendors and retailers opinions, count cinema, restaurants and mall clients, including also low price stores. The traditional forecast is based on a mix of economic indicators given by stock prices, factory’s orders, unemployment claims, and consumer expectations. But in recession time, habits of people change, and you have to modify your criteria too. People have more time for driving to a lower price shop, while customary stores could have problems.

Act now, the future depends on your present

Venture capital is the quickest way to raising capitals, a group of private investors put funds to buy equity of emerging growth companies. It is appropriate for high and fast growth companies, it is used for financing startup or a single profitable product of an old company that needs capital for expansion. Cost: The range of funds raised varies from $500,000 to $5 million. Venture capital investors are available to finance a startup, but demanding significant equity.

If you have a new business idea, you can submit a brief introduction of your business idea to some investors. Investors can allocate some of their investment to your firm now for being a shareholder of an high profitable company tomorrow.

Changing the company policy : be comfortable with bad and uncertain time, internet and globalization have been changing the way of doing business. Adopt a model to handle economic turbulence, being flexible and taking all opportunities given by new markets and technology.

New products : bad time have changed customers spending habits, re-thinking values and purchases. Staying in touch with your customers, analyzing carefully the market trends, will give you the idea for innovative products and services that match new clients needs.

The right product always sells : everyone is willing to pay for things that solve problems. In bad times, problems to be solved are different from good times, that is why most car manufacturers are going to bankruptcy. They produce expensive cars that don’t match clients current assests.

Thinking new markets : cutting costs is always a good practice, such as renegotiating prices with suppliers, looking for a more convenient location, and out sourcing logistic. Be focused on creating new markets and steadying the old one.

Welcome the challenge : during good time you are comfortable with your business model, and don’t feel the necessity of changing. Make use of crises to be innovative. Now take the opportunity to re-examine your business model, and look for implementing new ideas.

Never stop dreaming : think differently. Customers are waiting for your new products.

Is now the time to add or cut advertising?

Some people think of cutting advertising costs to save money during the downturn mixing coupons and media advertising are both ways to develop business through marketing. The marketing is changing, all products look similar and to boost sales you have to introduce unique products on the market. If you have a good product needed by consumers, you can reduce ad campaign without having problem with sales. Analyze all sales and marketing channels, and try to understand which is the channel that gives you the highest return on investment

Cut other ad channels, or just change the message to create same revenue of top channel. And always adapt marketing to present customer’s needs. During recession lifestyle also will change. Invest in marketing only if your products stand out, your advertising campaign is remarkable. Make sure to have the right product for present customer’s needs, prepare an advertising campaign with the right message, and always keep watch over the return on marketing investment. It doesn’t mean spend millions on advertising, try a low cost marketing, mixing coupons internet and traditional media advertising.

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