Selling Your Technology Company for Maximum Value: A comprehensive guide for entrepreneurs
Business grants are free funding money awarded to qualifying businesses. A significant amount of public and private grants are available for new businesses ; typically they are designed to support businesses starting up in impoverished areas, to boost the economy or to promote technological innovation and research. The best place to start looking for small business grants is your local Council website. They typically will have all the details of local grants available and of some national ones as well.
Still, many businesses in the UK receive grant funding each year, it is still worth a shot! Large corporates, universities, or local councils usually run them to gain exposure, support the local economy or as a PR and marketing stunt. Competitions are often underapplied for and applying is usually far less time-consuming than applying for other funding sources like grant funding. The downside is you might not win and lose a lot of time and energy in the process, depending on the requirements and conditions of the competition. An angel investor or business angel is a wealthy individual commonly a former entrepreneur who is willing to provide money for your business in exchange of a percentage shareholding in your business.
Angel funding usually has few requirements and angel investors at this stage are primarily investing in people much more than they are in the business! Venture capitalists are professional investors who invest significant sums of money into many companies with the aim of making a return on their overall portfolio.
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At this early stage, venture capital unfortunately is only applicable to highly technological companies that operate in fields such as life science and biotech. These types of companies require huge initial investments from the start and can justify this funding by the promise of massive innovations and breakthroughs in technology and science that could yield considerable returns.
The relative downside of venture capital is that it is hard to raise and, as professional investors, they will actively take ownership and control of part of your business. The upside is that you can raise a considerable amount of money very quickly if your business already has much traction, venture capital could also apply to you. Crowdfunding is a relatively new form of investment , it allows you to raise small amounts of funding from many people.
This can be done by selling equity or offering a reward or product in a presale crowdfunding campaign. Crowdfunding campaigns typically require an enormous level of marketing to be successful in most cases.
Selling Your Technology Company for Maximum Value
The upside is that a campaign gives you the chance to test if people are receptive to your business and if you crowdfund goes well, in some cases, you can raise your funds in 48hrs of course, after having prepared for months. A simple business loan means you borrow an amount of money from a bank, person or lender and agree to pay it back over time, such as in a timeline with interest. Given that banks do not lend as much as they used to to new businesses, the start-up loans scheme detailed below is likely the best option for anyone starting up if you want to raise finance this way.
Eligibility and facilitation of a start-up loan are carried out by delivery partners who assess each business plan or business case. The loan is typically payment free for the initial year where you only pay nominal interest payments each month, with the bulk repayment starting on the second year and being paid back over as much as five years be aware that although the loan terms are very favourable the actual debt obligation lies on you.
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Over the last few years, many businesses have been successfully launched by entrepreneurs who took startup loans. It can be a good funding option depending on your situation. You occasionally do hear stories about entrepreneurs maxing out business credit cards to fund their new business that quickly becomes successful. What you do not hear a lot is about most entrepreneurs who max out their credit cards and go bankrupt.
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A business credit card is one of the worse forms of finance to use for starting a business. The interest rates, penalties, and complexity of this kind of short-term finance only make it useful to trading businesses which are profitable and need a flexible credit facility. An overdraft allows you to borrow a set amount of money on an ongoing basis or until the bank withdraws the facility.
You pay an agreed monthly rate of interest on top of anything you borrow. It is not a good form of finance for starting a business and should only really be used by trading profitable companies. It is specially useful for businesses who have seasonal businesses or cashflow issues due to longer client payment terms or other reasons. Sales and marketing are the beating heart of any new business, for a business to be successful it needs to be innovative at marketing and effective at selling.
When it comes to starting a business, this means thinking about preparing your product or service for sale, how you plan to go to the market and what channels and systems will be employed to reach and close customers. Once you have a product or service ready to be sold, you need to start packaging it for the market, this means considering differentiation, positioning and pricing. It is about defining who you are and what you are offering in a way that resonates with your prospective customer. Differentiating your offering from your competitors is all about identifying and showing your USPs Unique Selling Points.
This means thinking about where you offer superior functionality and value over your competitors and how you can communicate this through your marketing message. Pricing a product or service is tricky, it is often unclear for new entries into a market what pricing strategies you should implement, so here are few ways that will help you to calculate a fair price:. Once you are ready to go to market, you need to figure how you will get there. This means choosing the best route to market ; this could be online, through fixed retail, wholesale, even selling through a third party or a mix.
Selling online could be in the form of an online shop or a subscription software platform SAAS. The internet offers small businesses complete control over their route to market. Many new businesses will choose to sell directly to their customers through the web as it provides fantastically low overheads with little required investment compared to starting a physical business location. A retail store is a public place where customers can go and purchase from your business directly.
Retail stores give you a guaranteed audience of passing customers depending on the site. This type of sales route is perfect for high-volume product-based businesses, but it also works for services, i. Wholesaling offers businesses the chance to sell their products in bulk to suppliers or retailers who will then go and sell directly to the public through their own sales channels.
Hiring an agent or affiliate on your behalf means they will find and connect you with potential customers, thus doing most of the marketing and some of the sales work for you.
You will however usually have to pay a hefty commission to the agent when a customer they refer converts or a fixed fee on a per lead basis. Once you have chosen a route to market, selecting the correct marketing channels to generate interest and customers is critical. There are many different channels and you have to find the most cost-effective and high-return channels for your business.
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It can take some time and testing. Email remains the core way people and businesses communicate online. Thus, email marketing reaching potential customers via email is one of the primary marketing channels for generating customers and sales. This type of marketing could be done through newsletters or cold sales emails, and it is one of the online marketing channels available with the highest return on investment.
Pay per click PPC advertising is one of the most popular forms of online marketing. It typically involves using paid display and search advertising via Google and other networks to reach potential buyers and drive them to your website or landing page.
If PPC campaigns are well targeted and managed, it can be a highly efficient and reliable method of generating business. It is important to note that social media and Facebook advertising also now accounts for a huge amount of marketing budgets for many businesses.
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Social media is one of the newest and best ways to reach potential customers. Whether it is Facebook, YouTube, Pinterest, LinkedIn or others, there is a range of social media platforms that are useful for effectively targeting and reaching your ideal customers. It is time-consuming to build and maintain an account, but in the long term it has proven to generate a significant return on investment for many brands.
Written content can be an excellent way to reach customers via online search. If you have access to a good writer and your business is primarily online, one of the best and cost-effective ways to reach your customers is through organic search. Out of all forms of online promotion, natural search traffic is the highest converting regarding sales, it is particularly useful for promoting your website to potential customers.
An old-fashioned method, direct mail marketing is still used by many companies today to inform potential customers about their offering and drive sales. It is particularly useful for service-based companies who have complex offerings that need to be described well, i.
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However, you might be wrong, many businesses still rely heavily on telesales for large swathes of their marketing and sales budgets, and the return is still substantial, particularly in the telecoms industry. Creating an effective sales process is about taking potential customers generated by your marketing efforts and turning them into paying customers. With sales and marketing inextricably linked, it is important that your sales process will highly convert the leads that your marketing delivers, otherwise marketing is a waste of resources.