Business Info

Your bar business plan is, of course, a key document that investors and lenders alike need to examine to consider providing you with capital for your new bar. However, don’t overlook this document’s importance as the means for you to think through all of the elements of opening your bar and avoid missing key steps. In the process of creating the business plan for investors, you are improving your chances of successfully launching, finding customers, and managing the bar.

Customers + Need + Service = Opportunity

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Many people have turned to the internet as their first method of finding angel investors. There are both many positives and many negatives to searching for outside capital in this manner. First, let’s take a look at the positives. It is not very expensive to try to find private funding using internet search methods. However, you must be very diligent as there are a number of web based operations that are simply seeking to take your money without ever giving you a proper list of outside funding sources. We will cover more of these issues below as it relates to using the internet to find angel investors. Typically, the costs associated with using the web to find private funding ranges from $50 to $250 depending on the services that can match you with potential funding source. You should be wary of any internet based company that gives you guarantees and promises as it relates to finding angel investment. Prior to working with any firm, you should always check their references and their history with the Better Business Bureau. The most prominent negative when conducting these types of searches on the internet is that there is a lot of bad information as it relates to working and finding private funding sources. As we discussed above, there are unscrupulous people out there that are looking to earn a profit for themselves without ever connecting you to a capital source. One of the other negatives when looking on the internet for private investment is that you may be required to conform to certain securities laws as it relates to finding capital from both in state and out of state investors. As always, your attorney should always provide you with a number of guidelines to follow as it relates to publicly promoting the fact that you are seeking capital for your business.

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Green energy businesses have become extremely popular among angel investors as there is the potential for a substantial return on investment as it relates to these businesses. Additionally, a proactive approach by the government has allowed by green energy companies and alternative energy businesses to receive a substantial investment from the federal government in regards to research and development. As such, if you are developing a new alternative energy technology then you are in a great position to raise capital from angel investors.

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We’re going to continue to discuss accredited investors through our series of articles relating to looking for angel investors. Accredited investors are typically high net worth individuals that are seeking to make substantial capital investments into small and medium sized businesses within their respective markets. As such, you should always ensure that the individual or firms that you deal with fall under the definition as provided by the Securities and Exchange Commission.

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Private placement memorandum, although expensive, greatly simplifies the capital raising process. Before you send any materials to a third-party, your attorney should review each and every document that you produce especially if you have drafted your private placement on your own.

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Most angel investors are self-made multimillionaires. It is always best to meet your potential investor face to face rather than conducting business over the phone or internet as you will be able to have a better understanding of what your potential funding source is looking for in a small business investment. It is extremely important that you give some thought to the industry trends in order to predict your possible revenue steams in order to make sure that you get the best deal possible as it relates to working with a third party funding source. If you’re already in operation, you may wan to review a conventional loan or SBA loan prior to looking for an angel investor. This will ensure that you are not selling an undue portion of your business in exchange for the capital that you are seeking.

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Accounts Receivable financing is a very good alternative to angel investment you have a number of clients that owe you money on an ongoing basis. This financing provides you with a moderate cost form of capital that does not require a personal guarantee or a sale of equity to a third party Sometimes, it is in your best interest not to work with an outside angel investor if you have a number of accounts receivables that can be sold to a third party. Most angel investors high net worth individuals that are always seeking to obtain a substantial portion of your business. This specific type of financing is most appropriate for established companies. In some cases, a private investor may be able to provide you with the capital that you need while having you pledge your accounts receivables as security for the angel investor.

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You should thoroughly showcase the tangible assets that are held by your business that can be liquidated if your business is not as planned as many angel investors are going to want to see how they can recoup their investment in the event that this occurs. Your CPA should put together an extensive amount of information for a potential funding source as it relates to tangible asset purchases. In many instances, you can use a portion of angel investor financing in order to put down a payment so that you can use lease financing in order to receive the equipment that you need.

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Most angel investors have been previously successful within specific industries, and they are going to continue to want to make investments into businesses in which they are familiar with how to run. It should also be noted that funding sources can come in a number of different varieties. On a side note, you may be required to provide a private placement memorandum to an angel investor or private funding source. Only your attorney to determine whether or not you need a private placement memorandum as it relates to procuring investment. Within this document, all of the risks associated with your business should be clearly showcased.

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You need to make sure they were able to pertaining significant amount of control of your business when you are working with outside funding sources. If you’re working with friends and family, you should have the same contracts as you would use when working with any other type of investor. You should always provide any funding source for complete resume of your abilities to operate your business on a day-to-day basis so that they can understand why you should remain in control of your business at all times. Your board of directors will most likely include your angel investor, which will have oversight of how you are running business. One of the alternatives to private investors and capital firms is to use Small Business Investment Companies that are licensed by the Small Business Administration that will generally not require as much equity or say in how you run your venture.

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