Getting funding for your business is provided by investors, and is typically based on a company’s business plans’ ability to show how much money is needed, how much money is going to be made, and how the investor will benefit.

A well-crafted business plan offers a glimpse into the past, present, and future of the company. Generally the funding is awarded based on financial projections that usually include a 2-3 year cash flow forecast, 3-5 year financial information forecast, and a detailed and specific plan on the how the loan will be repaid.

There are two basic types of business plan funding: debt and equity.

Debt funding is where a company borrows money (as with loans) and must pay it back with interest in a timely manner. There are many sources for debt financing: traditional bank loans, savings and loans, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. Usually, these sources are best for companies that have a high ratio of equity-to-debt.

Equity funding means taking on private or commercial investors, and making your business accountable to your investor. Many small business owners raise funding from relatives, friends, colleagues, or customers who hope to see the businesses succeed for a return on their investment. However, the most common source of professional equity funding comes from angel investors or venture capitalists.

Venture Capitalists are institutional risk-takers and may be groups of wealthy individuals that are willing to offer promising new businesses the capital needed. These investors include individuals with substantial net worth, corporations, and corporate financial institutions. If a company has a high proportion of debt to equity, most experts advise increasing the ownership capital (equity investment) for acquiring money to finance your business plan or obtain a commercial line of credit.

As always, it is best to consult with experts and trusted advisors before making a decision that will affect your business.

The path to personal wealth is statistically most often laid by those who put down their paving stones as business owners.

According to The National Association of Women Business Owners, currently 10.6 million women business owners spend $546 billion annually on salaries and benefits. Family-owned business research records that 35% of Fortune 500 corporations are family-controlled; family-owned businesses account for 50% of the gross national product. These are impressive statistics on the success of entrepreneurship in the United States of America. Perhaps only second to the American Dream of home ownership is the concept of personal business ownership. Additionally, tax experts recommend owning a home-based business as a way to manage deductions to the greatest advantage.

It is just here though, that entrepreneurs face a two-edged sword, and need to make decisions that are in their best long-range interest.

The goal of most business owners is to sell what they have built, recovering the highest sale price possible, as reward for years of often difficult work. But if tax deductions are unwisely loaded on to the business during its years of operation, continually reducing the demonstrated income to the business, the end value can be pitifully small to a prospective buyer. This of course, eats a big chunk out of the potential sale price, which the entrepreneur may have been planning upon to fund his/her retirement.

Small business owners, defined here as those generating under 1 million in annual revenue, do need to take full advantage of the savings potential available to them, especially planning for their own retirement. They will be wise to choose among these established options:

Employee 401K Plan (Funded by employee contributions and often by matching contributions from the employer, called a Qualified Plan, is best for companies that can sustain the set-up and administrative costs and want to invest in their employees over the long-term).

Sep IRA (Simplified Employee Pension Individual Retirement Account: allows larger contributions for a smaller number of employees including the owner—this is a low-cost pension plan for small businesses).

Simple IRA (A savings incentive matching plan for employees: easy to administer, low cost of start-up and maintenance).

Solo 401K (Tax deferred program for the single practitioner: high
limits on annual contributions—sole proprietors can contribute $40,000 or more depending upon age, compensation and earned income).

According to Bruce Lloyd Bradshaw, a senior investment advisor, “Too many small business owners take all the income out of the business, expense it away, make it look as though they made no money. As a consequence the business does not look like it is viable when they are ready to sell it. They do need to take a reasonable income, but have the business contribute to their savings plan as retained earnings. This creates a much more lucrative proposal in the eyes of the prospective buyer…and it protects the business owner over the long term.”

It is imperative that, as a small business owner, you create a marketing plan. It’s also imperative that you realize your marketing plan is going to be a work in progress. Your plan (and you!) must be flexible enough to change and adapt to the current market conditions, changes in the economy, advances in technology and so on.

Here are 6 great tips to keep in mind when you begin creating your own small business marketing plan:

1. Establish Goals

Your small business marketing plan should be very goal oriented. Being able to visually see what your intentions are for your business can often help you plan and organize in a way that will help you reach your goals quicker and more efficiently. Before beginning your marketing plan you should sit down and write out exactly what goals you intend to reach.

Next, figure out a rough idea of how you plan to reach these goals. Be as specific as possible; include exact numbers (number of clients, number of products, number of websites, etc), exact dollar amounts (amount of sales, amount of profit, amount of affiliate commissions, etc) and exact dates (when your website will be completed, when your sales calls will be made, when your products will be released, etc.) There is no way you can draft an outline of what you plan to do with your business unless you really know what you want out of your business.

2. Identify Yourself

Though many small business owners do not see the point in creating a brand for themselves, you are creating a brand whether you realize it or not. So why not do it deliberately? Include in your marketing plan exactly what you want your customers’ and the market’s perception of your business to be. What personality will your business take on? What do you want to be known for? What do you want the “gossip” about you to be about? This should be spelled out in your marketing plan and should be something that you actively strive for on a day to day basis.

3. Develop a Budget

Be sure to include in your yearly marketing plan the budget for the year as well as your plan for achieving this budget. Though there will always be additional financial documentation separate from the marketing plan, it helps to include exactly what your goals are for spending, budget, and earning. This way you have a perfect example to look at; and remember to always leave room for flexibility and editing of your marketing plan.

4. Describe Your Product or Service

One of the greatest things about your small business marketing plan is that it will come in very useful as your business grows. You’ll be able to hand it off to your new team members and they’ll have a perfect sense of where the business is going and how it’s going to get there.

But one of the funniest things I encounter in working with small businesses is that many of the ancillary team members can’t exactly tell me what the business they work for does. Since they’re only involved in a small portion of the business, they’re not familiar (or have never been told) the big picture. This is especially true with consulting businesses and service providers.

So be sure to describe in detail your product or service and how it will improve the lives of your customers. Many small business owners skip this step, thinking they already know exactly what they do. But remember, you’ll have a larger audience than just yourself for your small business marketing plan – and you might be pleasantly surprised at useful this step is to you and how you view your future marketing activities.

5. Describe Your Target Consumer

You should make it abundantly clear within your marketing plan who your business is aimed at and how you plan to market to that particular group. Clearly targeted customers are vital to a business or marketing plan. Your plan is all about articulating who, what, when, where, and why. This is the “who” and it helps to make it clear to everyone in the business (especially you) what sort of person you are targeting as a potential customer or client. By having a very clear description of your target customer, when you set out to advertise, promote, or change a product, you’ll know exactly where and when to do that. You’ll know where to spend your advertising dollars, you’ll know how to phrase your messages, you’ll know what type of graphics to use, and on and on. Don’t be tempted to skip this either – again, I think you’ll be pleasantly surprised at a useful it is to get your target market profile down on paper.

6. Tell What Makes You Unique?

Being able to set yourself apart from all of your competitors is a huge part your small business marketing challenge. You need to clearly separate yourself from the crowd. This is called your “unique selling proposition”. What makes you different? How do you stand out from other businesses that are selling the same product or offering the same services? Create a clear and coherent statement on this differentiation within your marketing plan. Not only does this help to improve confidence in your product, but if a prospect asks why he should do business with you, you’ll have a clear answer to give him.

Can’t find anything that sets you apart? Be sure to spend the time creating something! Schedule a brainstorming session with your staff members, your best clients, even your family and friends. Often times, these people already know what sets you apart, and it’s usually something that you’ve taken for granted all along. And one last word of warning: avoid using Price as your unique selling proposition. There is always someone willing to undercut you or use your product as a loss leader, trapping you in a never-ending game of sales and price reductions.

A small business marketing plan is essential to your business. It doesn’t have to be something large and cumbersome; you’ll get more use out of a marketing plan that is flexible and easy to follow. So I challenge you to set aside a few hours over this upcoming weekend and begin drafting your small business marketing plan. You’ll be amazed at how helpful this step is to the growth of your business.

Small business owners mistakenly believe that the size of their business negates the need for strategic planning but the opposite is actually true. Its inherent size is actually what makes strategic planning more important because it can be means for a small business to gradually evolve into a huge and thriving multinational corporation.

What Small Business Owners Need to Know about Strategic Planning

Planning is one of the five important functions of management, but it’s arguably the most important of all because it’s the first function that any manager or business owners should focus on. Planning sets the goals, mission-vision, and direction for the company. Without it, the other functions may be impossible to achieve.

A business can’t, however, benefit from just any kind of planning. It must be strategic in essence to be effective. Strategic planning is a methodical process of deciding where you want your company to be in a given time frame and what you propose to do to get there.

There are different ways to let your company benefit from strategic planning so don’t worry about following the so-called rules. Whatever works for your company is good enough.

Elements of Strategic Planning

Internal and External Assessment of Strategic Planning – A coach of a basketball team won’t be able to map out an effective play if it doesn’t know its players well, which team it will be playing against, and other related factors. The same can be said for any business manager. Before you can start working on the details of your strategic plan, you must first focus on compiling data about the external and internal environment of your company.

Outside your business, politico-legal, economic, and socio-cultural factors can affect how your business will fare in the next few years. Inside, factors such as management style and the type of workforce you have can also help or hinder your company from attaining your goal.

Setting Your Company’s Goals – Small or big, the important thing is for your business to have goals. If you’ can be satisfied with small and short-term goals then that’s good; if you secretly desire for bigger goals then that’s even better. To know if the goals you plan to work on are indeed workable, determine if they adhere to the SMART rule – specific, measurable, attainable, realistic, and time-bound.

Rule of Majority – Of course, as owner or manager of a business, you reserve your right to approve or naysay any suggestion but as much as possible, allow the rule of majority to stick. Plans can only come to fruition if everyone in the company works together and you can assure yourself of their cooperation by showing them that you care about what they think.

Devising an Action Plan – Finally, it’s time to concentrate on the nitty-gritty of your strategic plan. List down possible and specific courses of action then choose what all of you deem as most suitable. Make sure that you set a definite schedule or timetable for everything but give allowances for unexpected delays and concerns. Set a budget as well.

The Ever-So-Popular Plan B – Last but not the least, devise a Plan B in the event that your first plan doesn’t work and list down indications to know when’s the right time to put Plan B to action.

Good luck on strategic planning for your business!

Save Up as Much as Possible – All too often people eager and excited to start their own business make the mistake of going into business solely relying on loan money. What many fail to understand is that it can take months and even years to become profitable (the average small business isn’t profitable for one to two years). And once you get going, you may find yourself using credit cards and taking out home equity loans to pay off your business loans.

Thus, it’s important to save up as much investment money as possible including at least one year of living expenses. Even when you do begin to turn a profit, it’s likely you’ll put that money right back into the business investing in more equipment, business space, marketing, etc.

Most successful small businesses were started in someone’s garage or basement; these business owners were able to grow their business and learn from their mistakes without racking up massive debts. Remember, think small!

Make a Business Plan – No matter how short, a detailed business plan is critical to the success of your business. Include a break-even analysis, a profit forecast and most importantly, cash flow projection. Even if you are regularly getting customers, you’ll be in trouble if you have to go 90 days without getting paid unless you’ve carefully planned.

Protect your Personal Assets – When you start your own business, you are personally liable for any debts incurred by the business. If you’re unable to pay a loan or get involved in a lawsuit, your personal assets may be at risk. Consider forming a limited liability company (LLC) or a corporation to protect your personal assets.

Bigger Isn’t Always Better – When you’re first starting out, think small! For example, don’t purchase 1,000 square feet of Class-A office space if something smaller and much cheaper will do the job. Likewise, can a modest office phone system meet your communication needs instead of a top-of-the-line one?

Get it in Writing – Even if you are not legally required to do so, consider getting everything – from agreements to purchase orders – in writing. Oral agreements can be extremely difficult to prove and quite easy for people to back out of.