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Category Archives: Business

7 Free Business Plan Templates for Startups

Luckily for entrepreneurs, there are templates out there that allow you to plug in all of the information, instead of struggling with formatting and figuring out what you need to include. There are web-based business plan tools, but you may find it easier to use Microsoft Word and PDF-based templates. Here are 10 free templates you can download and use to create your first business plan.

Bplans.com, known as the authority on business plans, offers a free Word business plan template, complete with instructions and a table of contents. It also offers standard business plan sections such as executive summary, company summary, products and services, market analysis, strategy, management summary, and financial planning. Once you register, you will be able to download the materials and choose from a wide range of businesses in different industries in which to base your plan. Whether your business is online, service-based, or a food establishment, Bplan’s Word business plan templates are comprehensive and are a great option for beginners and new business owners.

Entrepreneur.com provides business tools, with a collection of business plansfree in PDF, PowerPoint and Word. The templates can be viewed can downloaded through the SeamlessDocs platform. The site includes a template for a variety of specific business types, a business plan model that outlines the different parts of a business plan, and customizable templates that allow users to add their logos and business information. If you need a guide to writing a business plan, Entrepreneur.com also provides a download for that.

This step-by-step business plan builder, offered by Law Depot, covers structure, product marketing, SWOT (strengths, weaknesses, opportunities, threats), operations, and details specific to your business in their templates. Once the template is complete, you can download and print. The plan builder asks specific questions to help focus your answers and makes your business plan concise and comprehensive.

MOBI, or My Own Business Institute, is part of Santa Clara University’s Center for Innovation and Entrepreneurship. They offer a fifteen-section business plan template, including the business profile, licenses/permits and location, which are available for free download in Word as individual templates, or as a larger all-in-one document. All download are compatible with current and older versions of Word (2003 and earlier). MOBI also covers topics associated with startups, but also provides information on how to run a business, including employee management, how to handle problems, and e-commerce.

Office Depot

Office Depot’s Business Resource Center contains free business plan samplesfor retailers, manufacturers and service providers. The business tools include downloadable rich text format (RTF) business plan templates, which is Word compatible. Excel business plan financials are also available for manufacturers and service providers, while the retailer business plan template is complete with forecasting and financial tables, but this requires Microsoft Word version 6.0 or later.

Catering to businesses owned by women, Oprah.com’s free one-page business plan templates can be used by anyone who wants to start a business. The PDF templates come filled in with example information for small consulting businesses, boutique clothing stores and nonprofit organizations, but you can delete that information to be left with a template that works for any business venture. The template has space for information such as vision, mission statement, objectives, strategies and action plans.

When you create a free business plan with Rocket Lawyer, you get the advantage of an attorney’s advice to make sure your document is legally sound. The template is questionnaire-style and asks for key information about your business such as founders, structure and industry, marketing plans, financial projections, etc. Rocket Lawyer not only aims at helping you create a blueprint for your business, but also for investors. Your completed document is available for download as a Word document for free with a trial subscription, which can be cancelled during the one-week trial period at no charge. The document is $10 on its own without a subscription.

5 Fast Fixes to Jump-Start Your Business Plan

Before you start writing your business plan, you need to make sure your business idea or product is actually desirable to your intended customer base.

“Many entrepreneurs come up with a great idea without stopping to think if they are solving an actual problem for a group of people,” said Jenny Leonard, CEO of digital agency Never North Labs. “You don’t want to spend months or even a year working on developing a business or product idea only to find out nobody cares or even wants it.”

Leonard said you should spend some time researching your customer base by actually speaking to people your product or business idea would target.

“You’ll quickly find out just by talking to a few dozen people if your business idea or product is a hit or a miss,” Leonard said. “It may be a little extra work early on, but it will save you potentially hundreds of hours in the future by doing this work first.After doing this bit of research, you’ll have the clarity you need to write your business plan.”

So what’s the first step in actually writing your business plan? Startup consultant Kristi Klemm said the first thing you should do is ask yourself, “Who am I making this plan for?” There are usually two answers to this question, Klemm said: You’re writing it to fit your own needs, or you’re writing it for investors or partners.

“It’s important to recognize when someone wants a business plan for their own needs,” Klemm said. “This indicates the person usually desires structure, and getting their motivations for starting a business on paper — or [on a] screen — is an important step for them in order to begin working [and] to acknowledge the business is really happening.”

This type of plan tends to be less reliant on outside data, functioning mostly to set into motion the actions needed to get the business off paper, and operating, Klemm said.

“It’s more of an expansive-yet-broad to-do list for the next 12-24 months,” Klemm said.

If you’re making your business plan for investors or partners, it should be very analytical, and include a lot of competitive and market research, with money-asks clearly defined and term sheets as detailed as possible, Klemm said.

“You’re already convinced the business is going to work. Now you need someone else to believe in you,” Klemm said.

A great way to simplify your business plan, both for yourself and your investors, is to make it more visual. Zack Pennington, chief operating officer at online music instruction resource Collabra Music, said you shouldn’t be afraid to use charts in place of long text paragraphs.

“Sometimes, people get too hung up on trying to explain their business model or cost assumptions in words, when a simple table, pie chart or flow chart can do wonders,” Pennington said. “Investors spend countless hours reading business plans, and if you use a chart that makes it simple and easy for them to understand what you do, you’re significantly more likely to hear from them.”

Pennington also noted a change in the way many business plans are being created.

“It’s OK for your business plan to look more and more like a slide deck, since that’s where most business plans are heading,” Pennington said.

When you’re creating your business plan, you also have to think about the time it will take you to reach your goals. Lora Ivanova, co-founder and chief marketing officer of at-home STD testing company myLAB Box, said that it’s key to ask yourself about your time line or personal runway.

For example, “How long can you and the people on your team — co-founders and anyone investing sweat equity — commit yourselves [to] full-time [work] or any meaningful capacity [dedicated] to your business?” Ivanova said.

Once you have that time frame, Ivanova said that the second most important question is, “Is that enough time, conservatively, to get your business to a place where it can sustain your ongoing commitment?” Or, in other words, “At what point in time can your business provide enough income for you to keep working on it?”

From there, you can figure out what goals you need to achieve and how to achieve them.

“Depending on any gap between your runway and revenue, your business plan’s primary goal will be to bridge that gap with tangible solutions,” Ivanova said.

She also suggested creating a business plan for your best- and worst-case scenarios.

“Looking at them side by side is a great reality check,” Ivanova said. “At the end of the day, any business plan is irrelevant if you, the founder [that the business’s] success hangs on, cannot sustain your livelihood to keep building.”

Business plans are important, but it’s also important to remember that not everything will go according to plan. That’s why you need to keep your business plan flexible, said Cindy Jones, CEO and formulator at skin-care company Colorado Aromatics Cultivated Skin.

“Many people get too hung up on a business plan, and it slows them down,” Jones said. “It doesn’t have to be perfect. Flexibility is important.”

Jones noted that her own business plan has changed a lot since she started her company.

“My original business plan evolved so much that it is not recognizable,” Jones said. “This is because areas of my business that were minor parts of my business plan, because I never expected them to grow much, actually took off more than expected. This meant my focus had to change somewhat and resources needed to go to that area.”

7 Powerful Tips for Using Facebook for Business

While the basics of setting up a page and posting to your business page are relatively straightforward, there are a lot of nuances to managing your page that could help you make the most of your Facebook presence. Here are 10 powerful ways to make your page more robust and engaging.

A key component of branding is consistency. As such, you should be sure you select a @ username that reflects your business. Of course, your ideal pick may not be available, so think of ways that you can get as close to your brand as possible. If you run the Acme Widget Company, maybe you could go with @acmewidgetco. Or even better, @acmewidget.

Remember that whatever you pick will be a part of your custom Facebook URL — shorter is better so it can fit on business cards or other promotional materials.

While Facebook keeps a pretty consistent look across the entire interface, you do have some freedom in how your page looks. You can choose from several templates that have certain tweaks to better match the type of page you have: professional services, business, shopping, standard, venues, politicians, and restaurants and cafes.

The differences are subtle, but they’re important. For example, the restaurants and cafes template places images higher so that you can show off the venue and feature menu items. The professional services option puts a prominent Call Now button at the top so potential clients can reach out to you right away. Spend some time experimenting here to see which is the best fit for your page.

You have quite a bit of control over how the layout of your page is created to fit the needs of your particular business. Make sure you’ve optimized all the right dials and settings that Facebook offers.

For example, you’ll find that the tabs on the side of the page can serve as quick stops for particular actions. Click “manage tabs” to put the photos, events or other items in a more prominent location. Also, if there are some tabs you don’t use, you’re able to get rid of those.

Facebook offers a range of call-to-action buttons that live at the top of your business’s page. You have a few different choices, so pick the one that makes the most sense for your business:

  • Book Now
  • Contact Us
  • Use App
  • Play Game
  • Shop Now
  • Sign Up
  • Watch Video

According to Buffer, one of the top methods for getting the attention of your audience is native videos. The company found some slightly better metrics for uploading your own video instead of embedding it from YouTube or Vimeo.

The beauty of videos is they’re so easy to produce now — all you need is a smartphone and a few minutes of light editing. Even if you’re not a professional video creator, it’s worth trying your hand at it.

Your Facebook page can be a portal for potential customers to reach out to you. A very effective way is through Facebook Messenger. If you add a call-to-action button, you’ll get messages in the Messenger app just as if they were from one of your contacts. Visitors to your page will also notice how responsive you are, which will leave them with a good impression of how you treat customers.

Facebook has rolled out a number of new tools for directing your content to a specific audience. While it will take some time to dig into the dashboard, you may find success if you are willing to target your content at characteristics more attuned to your potential customer base. For example, think about geographic location, age groups and other interest targeting. Marketer Jon Loomer has some more detailed suggestions if you want to dive in.

6 Ways to Ensure You’re Recruiting the Best Talent

Social media profiles have become standard tools for researching and evaluating talent. Instead of looking only at candidates’ résumés, thoroughly vet them by looking at their LinkedIn, Twitter and other social media profiles.

“Candidates’ social media profiles [can highlight] personal experiences and interests that tie into professional lives and skills, and may show the person is a perfect fit,” said Pete Kazanjy, founder of Modern Sales Salon and recruiter search engine TalentBin. “[Depending] on the type of job you’re recruiting for, make sure you’re looking at the right social networking sites to find candidates who may be off your radar.”

Kazanjy noted that engaging with potential candidates on social media can be to your advantage, regardless of whether they are interested in the position you’re offering right now.

“Although the person may be content where they are now, you never know what the future has in store,” he said. “Engaging with candidates on their personal profiles allows you to form a relationship.”

Don’t forget to have an active social presence as an employer, too. Beyond just posting job openings and interacting with candidates, post snippets about good things happening to and for the workforce in your organization. Get current employees to participate by joining in on the conversation, shooting short workplace videos and generally spreading the word about the beneficial features of working there.

Money is important, but it’s not the only thing top talent wants. They want a work environment that challenges them, allows for innovation, makes work fun but also provides work-life balance. This could mean paid time off (PTO), the ability to work from home, time to volunteer in their communities or the ability to take unpaid leave to pursue interests, to name a few.

Personal finance writer Kevin Mulligan said your company needs to create an employee value proposition (EVP) to use as a selling point with candidates. This should describe what sets your organization apart and why people should want to work there.

“The more attractive your EVP is, the more likely you will be attracting the cream of the crop to your company,” Mulligan wrote in a BusinessDictionary article.

One of the best ways to draw candidates in is a mobile-friendly hiring process. Dr. John Sullivan, a Silicon Valley-based author and HR expert, said that more than 43 percent of job seekers use their mobile phones in their job searches.

“That number will continue to rise until the mobile phone is dominant in recruiting,” he wrote in an article on EREMedia.com.

To that end, your app or website should allow candidates to accept offers, hold live video interviews, complete referral tasks and self-schedule interviews. For retention purposes, you can also build in functions for new employees: an interactive employee handbook, benefit registration, access to PTO balances and more.

Even just a decade ago, it might have seemed like a distant dream to have full-time, off-site employees with the same exact technological capabilities as workers in the office. Today, advancements in cloud computing and videoconferencing have opened the doors to hiring remote staff members, so recruiters are no longer limited to candidates in close geographic proximity to the company’s headquarters.

“If your company is located in a competitive hiring market, you’d be better off searching for top talent in a less competitive area,” said Anthony Smith, founder and CEO of CRM software company Insightly. “Technology allows for smooth collaboration and communication no matter where employees are located, so you don’t need to lose out on experts in your field because of where your company is based.”

This goes back to the workforce’s “immediate” expectations. Top talent will move quickly, because it is in high demand. Be ahead of the curve by investigating ways to speed up your hiring process while still demanding high-quality candidates reach a high standard.

“Others may view your slow hiring as a mirror of the speed in which you make business decisions, and drop out because they expect faster decision making,” Sullivan wrote.

You can speed up hiring by prioritizing hires for revenue-generating or key positions, surveying past candidates for their perception of what worked and what didn’t, and identifying other unnecessary delays that seem to be common in each vacancy-fulfillment effort.

Sometimes the best way to attract a candidate to your organization is to show off the people he or she will join there. Taso Du Val, founder and CEO of global tech industry network Toptal, advised highlighting your company’s existing talent during the recruiting process.

“Talented individuals want to work with top talent, so showcasing the all-stars already on your team can help validate why other high-quality candidates should hop on board,” Du Val said.

You can also use your current employees as a recruiting tool by sharing their positive testimonials with prospective candidates.

Top 7 Internet Products for Starting a New Business

Starting a business is an incredibly exciting time for any entrepreneur; however it can also be stressful with so much to do in so little time. The start-up phase is also characterized by significant expenditures against a backdrop of uncertain income. However, there are a number of products and services that can help you maximize your chances of success while also saving you considerable time and money. This article aims to introduce you to some of the less obvious ones that are available via the Internet. These products and services can help you set your business on the right path from Day One. While these recommendations will not be appropriate for all, those who need to bootstrap and build their business the hard way will benefit the most.

1. Create a website

Regardless of whether you intend to sell online or not, all new start-up businesses should secure a domain name and create a website as soon as they can. Thankfully, the cost of getting a site set up has fallen significantly over time and there are now a host of different packages and providers to choose from.

2. Download a profile of your industry

The factsheets, reports and guides from Scavenger are essential reading material for anyone starting up a business in the UK. The Business Opportunity Profiles are downloadable reports on specific UK industries. With over 800 reports in total, the range includes everything from ‘Children’s Day Nursery’ profiles to ‘Coffee Shop’ profiles to a profile on ‘Wedding Planners’.

3. Set up your company accounts

One of the big challenges start-up companies face is managing cash flow. Insolvency is one of the main causes of failure for entrepreneurs in the UK. However, with some careful and appropriate financial planning, cash crunches can be avoided. While this in itself is an important reason for buying a bookkeeping package, there are countless other reasons ranging from the ability to manage invoices through to managing payroll. The two main recommended introductory packages are QuickBooks® Simple Start from Intuit® and Sage® Instant Accounts. View online demos before you purchase.

4. Download business planning software

When you start up it is important to write a business plan to ensure you adequately plan the future of your business. The very process of creating a plan is beneficial, not least because it forces you to take a holistic view of your company. Business Plan Pro is the best-selling business-planning software available. It is easy to use, saves time, and has over 500 sample plans to get you started. It is also available via download so you can get instant access to it and hence pay no postage and packing.

5. Save costs on your phone

Using applications such as Skype together with a headset, it is now possible to make telephone calls from your computer at a very low cost. There is no need to commit to a monthly phone contract with line rental. Instead you can just pay as you go. You can also obtain a Skype number so people can call you back. However it is recommended that all start-up businesses do have at least one fixed line number they can be contacted on. Finally, you should also consider getting a portable number that is easy to transfer if you move offices.

6. Protect your computer

Once you connect to the Internet, it is important to ensure you have adequate protection in the form of anti-virus software. Many computers these days come with anti-virus software installed already. If not, you should consider downloading Ad-Aware from Lavasoft and AVG anti-virus from GRISOFT. These products are either free or reasonably priced, and are very effective. Finally, it is also recommended that you backup your data to an external hard drive such as those manufactured by Maxtor.

7. Explore Google

Google is famous for being the world’s favourite search engine. Additionally, there are a growing number of online applications owned or developed by Google that are ideal aids when setting up a new business. Google AdWords are the little adverts you see alongside search returns when you search in Google. These are a great way to attract customers at a low cost. Google Desktop enables you to search all the files and folders on your computer so you can track down any stored information at the click of a button. Both are very useful applications in helping you to market your business and to manage your internal data. Where: www.google.co.uk Cost: Free (AdWord prices vary)

A Simpler Plan for Startups

Business advisors, experienced entrepreneurs, bankers, and investors generally agree that you should develop a business plan before you start a business. A plan can help you move forward, make decisions, and make your business successful. However, not all business plans are the same, not every business needs the same level of detail. You might develop a fairly simple business plan first as you start a small business, and that might be enough for you. You can also start simple and then elaborate as you prepare to approach bankers or investors.

For a simple example, imagine a woman making jewelry at home and selling it at a local flea market on the weekend. A business plan could give her a chance to step back from the normal flow and look at ways to develop and improve the business. The planning process should help her understand her business. It should help her define what she wants from the business, understand what her customers want, and decide how to optimize her business on her own terms. She might benefit from developing a simple sales and expense forecast, maybe even a profit and loss, so she can plan how to use and develop her resources. She might not need to create detailed cash flow, balance sheet, and business ratios. A simple plan may be just what she needs to get going.

This first stage of a plan, that we call the Concept Kick-Start, focuses only on a few starter elements. The Mission Statement, Keys to Success, Market Analysis, and Break-Even Analysisgive you a critical head start toward understanding your business.

Ultimately, the choice of plan isn’t based as much on the stage of business as it is on the type of business, financing requirements, and business objective. Here are some important indicators of the level of plan you’ll need, even as a startup:

  • Some of the simpler businesses keep a plan in the head of the owner, but every business has a plan. Even a one-person business can benefit from creating a plan document with ideas written down, because the process of producing a plan is useful and valuable.
  • As soon as a second person is involved, the need for planning multiplies. The plan is critical for communicating values, goals, strategies, and detailed implementation.
  • As soon as anybody outside the company is involved, then you have to provide more information. When a plan is for internal use only, you may not need to describe company history and product features, for example. Stick to the topics that add value, that make you think, that help support decisions. When you involve people outside the company, then you need to provide more background information as part of the plan.
  • For discussion purposes, text is enough to get a plan started. Try describing your mission, objective, keys to success, target market, competitive advantage, and basic strategies. How well does this cover your business idea?
  • Can you live without a sales and expense forecast? Sometimes the one-person business keeps numbers in its (the owner’s) head. However, it’s much easier to use some tools that can put the numbers in front of you, and add and subtract them automatically. That’s where a plan helps.
  • Do you really know your market? A good market analysis can help you see opportunities that might not otherwise be obvious. Understand why people buy from you. What are the needs being served? How many people are out there, as potential customers?
  • Do you manage significant amounts of inventory? That makes your cash management more complicated, and usually requires a more sophisticated plan. You need to buy inventory before you sell it.
  • Do you sell on credit? If you are a business selling to businesses, then you probably do have to sell on credit, and that normally means you have to manage money owed to you by your customers, called accounts receivable. Making the sale is no longer the same thing as getting the money. That usually requires a more sophisticated plan.
  • Do you do your taxes on a cash basis, or accrual basis? If you don’t know, and you are a very small (one person, maybe 2-3 people) business, then you’re likely to be on a cash basis. That makes your planning easier. However, most businesses big enough to work with an accountant and have separate tax statements use accrual accounting because they want to deduct expenses as they are incurred, even if they aren’t fully paid for. By the time you are using accrual accounting, you’ll probably need more sophisticated cash flow tools, and a more extensive business plan.

New Business Plan Format is Concise and Personal

The 20-page business plan that is heavy on the financials and short on passion is so ’80s. Today, experts encourage entrepreneurs to keep it short and sweet — one page or even just a paragraph — and put a lot of themselves into their business plans .

“Things have certainly changed in terms of what constitutes a business plan,” said Chris Libis, CEO of Executive Recruiting Consultants, a national executive search firm based in Dell Rapids, S.D. “In today’s environment, the traditional business plan will bankrupt you.”

Keep it simple

Libis said business plans, including the one he developed for his own business, should be concise and to the point. The plan should cover five elements: a description of the product/service, how that product/service will be provided, how the company will generate immediate revenue and who the primary clients are for the product/service.

Unlike traditional business plans, modern business roadmaps should embrace new media, he said.

“Consider a three- to five-minute video that you can post on YouTube,” he said. “You have to have some sizzle.”

A YouTube video is just one way an entrepreneur can put technology to work for your business plan.

“Today’s interactive internet makes it much easier and cheaper to test ‘proof of concept,'” said Patrick Schwerdtfeger, speaker and author of several business books, including “Marketing Shortcuts for the Self-Employed” (Wiley, 2011). “That allows entrepreneurs to plan a given test long before worrying about larger business development strategies.”

But even for more highly detailed business plans that are often needed to attract investors, owners should concentrate on the table of contents to keep the document focused.

“The TOC is effectively your outline for the plan,” said Mike Samson, co-founder of crowdSPRING, a Chicago-based online marketplace. “Take your time with it; make sure you are including all of the relevant topics. At a minimum, your plan should include sections on the company you are forming, your marketing plan, financial information and your growth strategy.”

He also said business owners should include a brief executive summary at the beginning of their business plans.

“Many of the people you hope will read your business plan are ridiculously busy,” he said. “Lots of folks will read only the summary and flip through the rest of the plan. It makes for both a challenge and an opportunity; the stronger and better-written your summary, the better chance you have of a follow-on meeting to make your pitch in person.”

It is also important to keep your audience in mind when developing your business plan.

“Who will be reading your plan?” Samson said. “Investors? Potential partners or board members? Industry advisors? As you draft your plan, understand their capacity for detail and their reason for reading your plan. Anticipate the kinds of questions these readers will want answered and answer those for them.”

Customer focused

In today’s environment, the customer is king, so the business plan should explain how the new venture will find and attract customers .

“Make the case very clear from the beginning how you have solved a problem for a specific customer segment at a price they are willing to pay, and in a way that is better than the next best alternative,” said John Torrens, assistant professor of entrepreneurial practice at the Whitman School of Managementat Syracuse University.

Primary market research is critical.

“A well-written plan with nicely tied financials is great, but unless you can prove that you have spoken to potential customers and incorporated their feedback into your product or service offering, you won’t likely generate investor interest,” Torrens said. “This is crucial and often forgotten because it takes time and requires contact with potential customers. Results from electronic surveys, focus groups, interviews and other research should be included in an appendix.”

He said raising money through a business plan is still somewhat of a beauty contest.

“The founder must demonstrate that they are flexible, play nice with others, recognize the need for speed in reaching the market, and above all are willing to take advice from an equity holder. The business plan should not be all about the founder though. “

7 Things to Do Before Opening a Salon

“A business plan is key to starting a salon. The plan offers a road map for salon owners to follow and helps entrepreneurs consider all areas of the business. A business plan makes sure you set up a metric for success and consider the financials before you invest huge amounts of time and money in a new salon.”

“With salons on every corner, even in small towns, entering into the market with a specialty or service niche can dramatically increase buzz and press about your opening. Most salons try to please everyone, offering a huge menu of services. But this does nothing to differentiate you in the market. Even if you do offer many services, promoting a niche or specialty service will help you attract not only a very loyal client base, but will [also] instantly lend credibility to your salon as the experts in your niche space.”

“Do your research. Ensure that you are complying with the state laws and regulations. If you have to make some adjustments to your plan because of regulations and laws, do so early so that you can avoid potentially having to stop your operation later or [having to pay] a fine. This will save you time and money.”Talk to distributors

“Get in touch with major product distributors like Redken, Paul Mitchell, etc. Some of them offer support services such as training [and] consultants to salon owners and staff. “

“My number-one tip for aspiring entrepreneurs before they open up a salon is to have a number of professional clients of your own that will cover your overhead. Salon employees have an independent mind-set and will try to make power plays. With a solid client base of your own, you’ll be in a better position to call the shots.”

“Secure a solid location with plenty of parking. If you make it convenient for clients to visit your salon, you’ll have more customers, which in turn means more revenue to pay off your initial loan and to put toward growth expenses.”

“I would advise any new salons to invest time in the training and motivation of the staff. Now, any technician is going to know their trade. However, they might need help with the selling and customer-retention side. Your salon will be built around your stylists and technicians, [so] ensuring they are comfortable with up-selling products and other treatments across the brand is the difference between success and failure. Spending time before launch training your key staff to learn these key skills and learn how to teach them to new employees will pay dividends once the salon is running, and will go a long way to help with the smooth operation of a successful business.”

7 Small Business Loan Myths Busted

Obtaining a loan for your small business is no easy feat, but it doesn’t have to be an insurmountable challenge. Small business lending experts agree that the best way to avoid trouble is to prepare for the challenges that the application process may present.

“A lot of the frustration around obtaining small business financing can be eased by doing your due diligence,” said Michael Adam, founder and CEO of Bankmybiz, a site that connects business owners with business funders. “Be prepared, and have all your documents ready to present to lenders.”

Although low credit scores might have precluded you from getting a loan in years past, today’s lending environment is more open to subpar credit ratings.

“While traditional banks may be restrictive when it comes to obtaining credit, there are alternative options,” said Michael Kevitch, president and founder of Small Business Funding.

Alternative lending sites such as Small Business Funding tend to base lending decisions on the financial realities of a business rather than the financial history of business owners. Specifically, Kevitch said, alternative lenders take a close look at business performance, industry type, time in business and cash flow before handing out a loan.

Traditional lending institutions have been a mainstay of small business funding for many decades, and still are in some industries. But they are not the only sources of financing.

For business owners looking to borrow a relatively small sum (between $5,000 and $250,000), getting a bank loan is likely to be more trouble than it’s worth, Kevitch said. However, he noted that bank loans may still be appropriate for business owners who need to borrow a large amount of cash, over a long period, and still get a low interest rate. Kevitch advised business owners to make sure they fall under those categories before applying through a bank.

Kevitch noted that alternative lending sources often provide faster approvals; sometimes, businesses can obtain access to the funds in as little as seven days, he said.

Bank loans may not be the best option for every small business, but they’re far from the worst funding option out there. In fact, for established businesses looking to grow at a moderate rate, traditional bank funding is generally a great option, Adam said. It’s when a business doesn’t fit those criteria that business owners should consider shopping around.

“If you are a younger company, pre-revenue or low revenue — but plan to grow very quickly due to the industry that you’re in (e.g., health care, IT or software consulting) — then a traditional bank loan may actually limit your growth,” Adam said.

To decide whether a bank loan is right for your business, research both traditional loans and alternative funding sources. It’s also important to know your business inside and out.

“If you anticipate steady growth over the next few years, then a traditional bank may be best,” Adam said. “If you are growing like crazy and you know you will need to keep increasing your loan size by large increments each quarter, then entertain a nonbank lending partner, as banks may not be able to keep up with your needs.”

You may find this myth floating around online forums and perhaps even hear it from well-meaning friends and family members. It’s all right to ask for money, nonexperts will tell you; just don’t ask for too much. While this might be reasonable advice in personal circumstances, there’s not much truth to it in the business world.

According to Jess Harris, content and social manager of business lender Kabbage, a working paper from Harvard Business School revealed that banks actually prefer lending larger amounts because they make more profit from large loans in the long run. In turn, banks are cutting back on smaller loans.

Evan Singer, general manager at online Small Business Administration loan program SmartBiz Loans, said a business should apply for the amount it needs — no more and no less. He recommends considering both how much money you really need to grow your business, and how much money you can afford to pay back every month.

“Make sure that you have cash flow to make your loan payments,” Singer said. “That’s the biggest thing that a [lender] is going to check — that [the business owner] can actually afford to make their loan payments.”

There are multiple perspectives on whether a traditional business plan still has a place in the loan application process. Some funding experts believe that the method of using a business plan to measure the likely success and fundability of a business is a bit outdated. Singer said that although traditional banks might still require business plans during the loan application process, online lenders typically don’t look for it.

And although Adam agrees that most lenders won’t require a full-fledged business plan, he does think that having a plan at the ready is always a good idea.

“Every business should have some sort of business plan,” Adam said. “It’s just a good practice to anticipate growth, set milestones and keep yourself accountable. If you don’t have one, create one. You’ll be glad you did in the long run.”

Although interest rates are an important aspect to consider when choosing a lender, there are many other factors to keep in mind. Harris suggested asking how much it will cost, what the terms of the loan are, how soon you need to repay the money, and what you can use the loan for.

6 Alternative Financing Methods for Startups

 Many aspiring entrepreneurs have an idea for their business but lack the capital to actually start it. Brand-new businesses are often turned down for bank loans, and even if your business is established, funds can still be tough to secure. Loans funded by the Small Business Administration are usually more accessible, but they are becoming increasingly competitive.

So what options are left for someone aspiring to be a small business owner? Here are six options beyond bank loans for financing your startup.

Online lenders have become a popular alternative to traditional business loans. These platforms have the advantage of speed, as an application takes only about an hour to complete, and the decision and accompanying funds can be issued within days. Because of the ease and quickness of online lending, economist and former U.S. Treasury Secretary Larry Summers said at the 2015 Lend It conference that he expects online lenders to eventually reach more than 70 percent of small businesses.

Angel investors invest in early-stage or startup companies in exchange for a 20 to 25 percent return on their investment. They have helped to start up many prominent companies, including Google and Costco. Mark DiSalvo, CEO of private equity fund provider Semaphore said, “You are likely to get an investor who has strategic experience, so they can provide tactical benefit to the company they are investing in.”

Find out what makes angel investors fund a business here.

Venture capital is money that is given to help build new startups that are considered to have both high-growth and high-risk potential. Fast-growth companies with an exit strategy already in place can gain up to tens of millions of dollars that can be used to invest, network and grow their company frequently.

Brian Haughey, assistant professor of finance and director of the investment center at Marist College, said that because venture capitalists focus on specific industries, they can generally offer advice to entrepreneurs on whether the product will be successful or what they need to do to bring it to market. However, venture capitalists have a short leash when it comes to company loyalty and often look to recover their investment within a three- to five-year time window, he said.

Learn more about venture capital here.

Through this process, a service provider will front you the money on invoices that have been billed out, which you then pay back once the customer has settled the bill. This way, the business can grow by providing the funds necessary to keep it going while waiting for customers to pay for outstanding invoices.

Eyal Shinar, CEO of small business cash flow management company Fundbox, says these advances allow companies to close the pay gap between billed work and payments to suppliers and contractors.

“By closing the pay gap, companies can accept new projects more quickly,” Shinar told Business News Daily. “Our goal is to help business owners grow their businesses and hire new workers by ensuring steady cash flow.”

Visit BND’s guide to choosing a factoring service here.

Crowdfunding on sites such as Kickstarter and Indiegogo can give a boost to financing a small business. These sites allow businesses to pool small investments from a number of investors instead of having to look for a single investment.

Make sure to read the fine print of different crowdfunding sites before making your choice, as some sites have payment-processing fees, or require businesses to raise their full stated goal in order to keep any of the money raised.

Check out some emerging trends in crowdfunding here.

Businesses focused on science or research may be able to get grants from the government. The SBA offers grants through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Recipients of these grants are required to meet federal research-and-development goals, and have a high potential for commercialization.