Describe and explain the five ideas noted below and how they are useful in improving entrepreneurial strategy:
1. Adequate financing.
2. Understand personal strengths and weaknesses.
3. Strategy to achieve goals and objectives.
4. Comprehensive business plan.
5. Evaluating, monitoring, and adjusting strategy to keep in line with business objectives and goals.© BrainMass Inc. brainmass.com December 15, 2020, 2:31 pm ad1c9bdddf
1. Adequate financing.
A common issue faced by many entrepreneurs is adequate financing. Raising money is a common hurdle to overcome in order to become a successful entrepreneur. Adequate financing is a key concern when starting a business. One will need to invest some of their own money - sometimes putting funds into a business venture underscores to potential investors or financial institutions one's commitment to the venture. Most people don't have sufficient personal resources to get a business up and running ; however, fortunately, there are myriad sources of financing. Commercial banks, the Small Business Association (SBA) and private individuals are important providers of working capital. Although its funds are limited, the SBA can be particularly helpful for businesses owned by women and minorities. One may check with area banks to find out if they offer special programs for local or start-up businesses. A thorough, well-thought-out loan proposal should include the following:
? General information about the business, such as the company name, principal employees, the purpose of the loan and the amount needed.
? Business description including the history and nature of your business, number of employees and current assets.
? Management profile on each principal in your business, detailing education, experience, skills and accomplishments.
? Market information that defines your products as well as your market and competition, and a customer profile explaining how your business satisfies their needs.
? Financial statements such as balance sheets, income statements for the past three years (if applicable), a personal financial statement and collateral that will be used as security for the loan.
One may consider seeking private investors who wish to have an equity stake in the business. Relatives or friends may be potential investors. Keep in mind, however, that these people may, understandably, expect to have a say in how the business is run. Whatever the agreement, get it in writing. Treat friends and relatives the same as you would other investors. Once a business plan is completed, it should be reviewed with a friend or business associate. Alternatively a SBA or SCORE counselor may be available to help through some of the start-up hurdles.
While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second. Making the wrong financing decisions can be painful. It is important to avoid common entrepreneurial financing mistakes like securing the wrong type of financing, miscalculating the amount required, or underestimating the cost of borrowing money.
BEFORE PURSUING FINANCE FOR A FAMILY RUN BUSINESS, ONE MUST ASK THE FOLLOWING:
* Do you need more capital or can you manage existing cash flow or savings more effectively?
* How do you define your need for capital? Do you need money to expand or as a cushion against risk?
* How urgent is your need? You can obtain the best terms when you anticipate your needs rather than looking for money under pressure.
* How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives.
* In what state of development is the business? Needs are most critical during transitional stages.
* For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
* What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.
* Is your business seasonal or cyclical? Seasonal needs for financing generally are short term. ...
This in-depth solution of 2,392 words looks at how the fives ideas are useful in improving entrepreneurial strategy with real-life examples and references included.