All small business startups and business owners should be aware of the importance of raising capital. Without capital, you can’t keep funding your daily operations, which makes this process essential to the continued success and growth of your business. Raising capital is necessary for both new and existing businesses, and it comes down to three main components: resources, opportunity, and organization.
Entrepreneurs should have a thorough understanding of these three concepts to achieve the best possible funding:
Evaluating Your Resources
One of the most important steps in raising capital is first evaluating your capital resources. Capital resources, often human-made, are resources that are used by a company to create goods and services. While most are tangible, some can also be intellectual or social. Below are some examples of each type of resource:
- Office buildings
- Manufacturing facilities
- Heavy machinery
- Knowledge and skills of employees
- Patents and copyrights
- Future opportunities
- New innovative ideas
- Work values
By making a list of your own businesses’ different resources, you’ll have a good idea of what your organization can bring to the table, what you need to work on, and what you need to invest in. A higher investment in capital resources can result in higher output for your business.
The next thing on your list should be assessing your opportunities. In business, you have to be proactive and oftentimes create your opportunities. It’s not about how many people you know, but who you know that can help to kick start the fundraising process. This includes your contacts; starting with your networks, such as your friends, family, and peers can help to get your organization rolling. While some may be hesitant to get started, these non-institutional investors will often be more willing to invest in your idea because they know you personally and what you stand for. Other opportunities include pitching to angel investors and venture capitalists or even joining an accelerator program. Entrepreneurs need to be willing to speak with whomever it takes to make it happen, and then have the plan to ensure that no opportunity is wasted.
When working toward a goal in capital raising, developing and executing a capital raising strategy is essential. Being organized and on top of your fundraising plan helps to keep your business and finances on track. Without a solid system, it’s easy for confusion or mistakes to arise; the last thing you want is to lose track of your cash flow, or have important documents go missing. Along with the traditional office paperwork, it’s also important to organize your time as a business owner. This allows you and your team to fully focus on your priorities, tasks, and goals, which in turn, will save your business time, money, and energy. If you want to get a start on getting organized, here’s a capital-raising plan checklist:
- Setting goals
- Financial preparation and planning
- Creating your business story
- Developing your pitch, financial model, and other fundraising materials
- Practicing your presentations
- Meeting with investors
The process of raising capital can seem intimidating, but by approaching it with an organized, well-planned strategy, you can successfully navigate this necessary part of growing your business.
About Kye Giscombe
Outstanding management skills, an innovative mind, and an entrepreneurial spirit have propelled Kye Giscombe to top positions in a variety of business sectors, including law, real estate, construction, fitness, and retail manufacturing and operations. His career reflects nearly 20 years of executive-level management, marketing, business analysis, and investing experience, serving as a key decision-maker in existing corporate, start-up, entrepreneurial, and expansion environments.
Among the several successful companies he created over the past two decades are Cosmo Horizon Inc., a commercial construction management firm, and Contact Sports NYC, a sports apparel manufacturer. Giscombe attributes Contact Sports NYC’s success to collaboration with colleagues Frank Drohan and Irving Brothman, a top executive at Burlington Coat Factory.
Giscombe attributes his business success to his ability to analyze the viability of project ideas, design products and services that appeal to new growth niches, develop creative strategies to achieve goals, and implement processes that produce significant profitability and a loyal customer base. He relishes the challenge of creating new entrepreneurial enterprises and finds inspiration in planning projects he’s passionate about.
A resident of Alpharetta, Georgia, Kye Giscombe enjoys motorcycles, tennis, working out, reading, and traveling when he’s not concentrating on business.