The best business idea is of no use if it lacks it Financing cannot be implemented. 2 X 6 tips on how to prevent this.
- Why do so many good business ideas fail because of financing?
- How do banks issue their loans?
- Why the business plan is crucial to convincing investors
- University start-up initiatives help start-ups
- 6 tips: What is important for successful start-up financing?
- How companies and students benefit from each other
- 6 tips: How to convince potential donors and investors
- Even afterwards: Good contacts with the lender are important
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Why do so many good business ideas fail because of financing?
It is no coincidence that good business ideas and therefore many start-ups fail because of financing. Surveys show: On average, one in two founders goes into the bank interview poorly prepared. 46 percent cannot present a mature business concept to credit institutions. 31 percent of founders join the Conversation not for sure enough. 27 percent can ask questions about their own Business-Don't answer the plan conclusively. And 17 percent bring an advisor with them to whom they let do the talking.
So it's no wonder that many start-ups are missing Capital fail. But that need not be. If you are properly prepared for the loan discussion and know what is important, you can convince the bank - provided, of course, that the business idea is good.
How do banks issue their loans?
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To prevent the bank from rejecting you in the first place, you should: entrepreneur clear determine the criteria banks use to grant their loans. Besides the personal Appear The most important thing is the entrepreneur's creditworthiness, which shows that they are able to repay a loan. The bank usually assesses this creditworthiness based on a rating with which it wants to estimate how high it is Risks is that the loan will not be repaid.
A rating first examines the company's economic situation: The bank expects information on previous account management as well as a list of private assets and income (for example Income, securities, land and real estate ownership).
If the previous account was held at another bank or savings bank, the person you are talking to will obtain bank information from there in order to find out about the account management and previous handling of loans. It is critical, for example, if the overdraft facility is permanently overdrawn or the credit limit has been repeatedly exhausted. Or if transfers cannot be carried out because the account is overdrawn. As a rule, the bank also obtains information from SCHUFA. If you want to avoid unpleasant surprises, you should inquire about possible entries in advance.
Why the business plan is crucial to convincing investors
However, anyone looking for investors should not only look at banks: there are also numerous start-up initiatives, government funding and private investors, so-called business angels. In addition to the financial situation, the successful search for a suitable financier depends primarily on the founding concept and the characteristics of the entrepreneur:
For example, the quality of management and corporateOrganization, the company's situation on the market and the future of the market and the Industry, the relationship between Company and house bank as well as corporate development and corporate planning. Therefore, a convincing business plan is the decisive tool with which the entrepreneur shows that he has given detailed thought to building his company.
University start-up initiatives help start-ups
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University start-up initiatives can also be of great help in financing start-ups - such as the pioneering MEKTORY at the Talinn University of Technology: Glass box after glass box, student start-up founders sit here and do crazy things ideas the end. the MeetingSome of the rooms are equipped with all sorts of technical toys, and there are also extravagant meeting and relaxation rooms such as a Japanese room or a Chinese room.
The students at MEKTORY are supported by companies on a project-by-project basis: Skype, for example, donates prizes for competitions, and companies like Mitsubishi hire the students on a project-by-project basis. But the companies also pay for some of the equipment and provide their own experts to do this Projects lead. Students in the materials management department should also find out how to pack and ship them more efficiently for local companies such as the Old Hanse, a shop for medieval goods.
6 tips: What is important for successful start-up financing?
What conditions must be met for start-up financing to be successful? They provide a good overview here Setthat MEKTORY has set for itself:
- Teamwork: Scientists, students and entrepreneurs should work together to solve practical product development problems and develop new, intelligent ideas.
- A clear focus helps: MEKTORY focuses on three sectors: design and product development, development of business models as well as mobile services and media.
- Theory and practice: Theoretical study is complemented by the practical side as much as possible. But it is also equally important to better prepare engineers for their jobs through cooperation with companies.
- Empowerment: Students are encouraged to progress with their start-up companies - including through business model competitions, the winners of which were able to gain impressions in the world's leading technology centers.
- Vocational training: Children should be encouraged to take up a career in engineering. That's why MEKTORY also offers numerous courses for children.
- Internationalization: In the course of internationalization, students from different countries should work together and complement each other optimally in terms of working habits, ideas and solutions.
How companies and students benefit from each other
The data mining research area shows what it actually looks like when students and companies benefit from each other. For example, the students conduct eye tracking studies that allow them to measure where readers look on websites. Something like this also exists for normal stores where visitors look around with eye tracking glasses.
The MEKTORY sees itself as the flagship awareness , the students should try things out, make initial contacts with companies and gain experience with real problems - but not enter the market. Companies, on the other hand, benefit from the students’ specialist knowledge. The main thing is to bring companies and universities closer together, but also to attract students Technology to inspire. The University suggests talented students or organizes business model competitions. The Money comes partly from the companies, but also from EU funding.
6 tips: How to convince potential donors and investors
So that the bank conversation ends Success and you actually get the loan, there are a few points you should keep in mind. We show what matters.
- Contact the bank in good time: It is fundamentally important that you view your lender as a partner. You will strengthen trust if you openly and honestly provide all the information they need. Arrange consultation appointments in good time and don't miss important meetings. Please send the bank important documents in good condition three to four weeks before the actual meeting.
- Preliminary self-check: Before you go to the bank, you should check for yourself how you appear to the person you are talking to: Can you introduce the bank to a sufficiently large and solvent group of customers? Are you technically skilled enough to be able to carry out all customer orders to your satisfaction? Can you convince the bank of your commercial and leadership skills? Or can you provide competent advisors? Are you up to the pressure? If you cannot answer all of the questions with “yes”, you should still work on the relevant weak points.
- Your personal appearance: The personal impression is important: This includes appropriate clothing (suit, tie or costume), a confident demeanor and optimal preparation. Show that you are XNUMX% behind the planned investment, otherwise you will not be able to convince the person you are talking to. Even if you are not a supplicant: Do not appear arrogant or have exaggerated ideas, otherwise you will lose any chance of getting a loan. See the conversation with your potential financier as more of a negotiation and sales pitch.
- Be prepared for critical questions: Your lender will probably discuss possible weak points in your concept during the conversation. Be prepared for such questions. Possible pitfalls could be: questions about competition, risks, customer benefits, your qualifications, causes of a drop in sales or a possible tense financial situation.
- Conditions: Only when your business concept (business plan) has been discussed and accepted should you discuss interest rates, company shares, etc. be spoken. Always ask whether the lender cannot offer you cheaper financing alternatives. One question you should never forget – there is no “one” interest rate for any loan. Today, every loan condition is granted depending on the individual risk - and therefore there is room for negotiation there too. This also brings us to the next point:
- The follow-up: The confirmation of financing usually does not come immediately. For example, your bank may need a few days to weeks to make a loan decision, depending on the loan amount. If the potential investor refuses financing, you should definitely ask why. Was the business plan not meaningful enough? Were certain aspects not sufficiently presented? If you know why the financing failed, you can revise your concept and try again with another donor.
Even afterwards: Good contacts with the lender are important
Even after financial support is secured, a continued good one Contact to the funder of crucial Significance. An ongoing one Communication makes it possible to maintain transparency and share developments. This creates Trust and clarifies that Commitmentthat is given to the project or company.
Teaching For example, inform your donors regularly about the state of affairs and show them when you have yours Planning have implemented, but don't hide it if you have liquidity problems in the meantime. This is particularly important because it may well happen that you need additional financing during the start-up process. You should signal this early on.
Regular updates and reports on progress allow potential concerns to be addressed early and any adjustments to be made to ensure goals remain in line with the funder's expectations. An open dialogue also makes it easier to secure future financing and build long-term partnerships. Ultimately, continuous, respectful exchange is an essential part of successful cooperation with donors.
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