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Weekly Resource #43 NEIdeas

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NEIStart up businesses get a lot of love in the funding world. We’ve covered such things fairly extensively in previous blog posts. But what about the established businesses that need help growing? It can be hard to come by extra cash to push your business to the next level. NEI is here to help with that. In an effort to cater to the established businesses that have been a part of Detroit for years, NEI has launched a new funding initiative called NEIdeas.

A total of $500,000 is ripe for the taking. 30 businesses will receive $10,000 each and two businesses will receive $100,000 each. These two levels of funding are determined by the size of business entering. Businesses that are eligible for the $10,000 grants cannot have an annual gross of over $1 Million. Furthermore, to be eligible for the $100,000 award, businesses must gross over 1$ million and under $5 million annually. Check out the guidelines to see if your business meets the other criteria required for entry into the program.

You can submit your application online or by mail. It will be extremely beneficial to read over the NEIdeas’ website carefully and review the eligibility criteria as well as the fine details of the program. Craig Fahle has recorded a very informative interview with Dave Egner of NEI and Olga Stella of the DEGC regarding the program on his WDET show. Acceptance of applications opens May 8.

Weekly Resource #25 – Five Keys to Using Financial Statements

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ID-100182407Having well maintained financial records of your business is important in order to run it successfully. Financial statements are the windows into your business’ fiscal workings. Knowing how to analyze them is key to budgeting and pinpointed areas of waste.

On October 23rd, the MI-SBTDC will be conducting a class centered around the financial statement and how to mine the most useful information from it. It is intended for business owners and key staff who want to obtain a better understanding of how to use their financial statements. Ideally, Participants should have 2-3 years of financial records. Those of you who are seeking financing or are having challenges with cash flow would benefit the most from this class.

This class will cover a myriad of topics centered around financial statements. You will be instructed on how to use your balance sheet and income statement to manage your business. You will us break even analysis to improve your decision making, find the source of cash flow inefficiencies, and increase the cash flow to your business.

This event is free to Fifth Third Bank clients. You can find registration here.

Image courtesy of gualberto107  / FreeDigitalPhotos.net

Weekly Resource #23 – MMIC Crowd Camp: Ann Arbor

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image_FormHeaderCrowdCampOver the past few years, crowd funding has proven to be a viable alternative to traditional loans. With $2.7 Billion raised in 2012 through crowd funded campaigns, they are not something that should be ignored. However, it being a relatively new method of funding procurement, many people don’t know much about them and they know even less about how they can start a campaign themselves.

The Mid Michigan Innovation Center has the perfect event for those of you looking to try your hand at crowd funding but know nothing about it. Starting October 12th, The MMIC, partnered with Ann Arbor SPARK, A&E networks, and the founders of RocketHub, will be conducting a two day workshop that will walk you through all of the steps involved in starting a crowd funding campaign.

The 2 day course will begin with breakfast and an introduction presentation that will describe the types of things that successful crowd funding campaigns do right and how “A&E’s project start-up” works. As the day continues, attendees will have time to work on their campaign. They will shoot the video description of their crowd funding idea that will be used in their final campaign profile. The event will wrap up on day 2 with finalization of projects and a launch party.

Attendees are encouraged to bring all of the video equipment they will need to shoot their video. This includes cameras, tripods, and laptops. Whether attendees have a project planned already or not, This event is great for anyone interested in crowd funding. Attendees do not even need to launch their campaign at the end of the event. They can come to simply learn and build a mock campaign.

Registration can be found here. Be sure to register soon because spots are limited.

Weekly Resource #5 – BBC Webinar Series

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bbc logoGot technology?  BBC can help you get it to market.

BBC Entrepreneurial Training & Consulting advises tech-based entrepreneurs and companies around the country on technology assessments, grant funding eligibility and proposal development, commercialization and business planning, and grant and contract management.

One of their core strengths is helping clients win federal funding through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.  Through June, BBC is hosting a series SBIR / STTR grant training webinars on a variety of subjects, including general information about the programs and requirements, proposal writing, budget planning, and records compliance.  Click here to see the complete list and register for the one that’s right for you.

“Money, It’s a Gas.” – Part 1

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“Money, it’s a gas.  Grab that cash with both hands.”
– Money, Pink Floyd – Dark Side of the Moon

Wouldn’t every entrepreneur with an inspired idea and every small business owner with a current opportunity love to take this advice and grab the cash?  Unfortunately, many aren’t clear about the funding options available to them during their various stages of business development and, therefore, often reach for something they’re either not ready for or are ineligible to receive.

I frequently meet and consult with people who have great ideas for a community-based small businesses.  Some already have well developed plans for launching and a great chance of success.  But they need some start-up capital, so they’re asking about angel investors or grant money.

What they often don’t know is:

  • Government grants for funding private enterprise generally don’t exist; and
  • Typical equity investors, i.e. angels or venture capitalists, are interested only in highly scalable, growth-oriented ventures because they represent the highest return on investment potential.

Therefore, lifestyle businesses are reliant on fundraising from friends and family, crowdfunding, traditional bank loans, and community-based microenterprise lending programs.  The most obvious, but often overlooked, financing source is sales.  But that’s a subject for another post.

For now, let’s focus on external funding sources available at various stages in the business life cycle.  The following graphs, used with permission from Han Peng, Manager of Entrepreneurial Programs at TechTown Detroit in Michigan, help illustrate how profitability, time and stage impact your financing options.  The first is general and works across geographic boundaries, while the second adds a layer to illustrate some specific Michigan program examples.  I’m confident the principles can be applied to similar programs across state lines.

Graph 1.0

Printed with permission from Han Peng, TechTown Detroit

Printed with permission from Han Peng, TechTown Detroit

Graph 2.0

Printed with permission from Han Peng, TechTown Detroit

Printed with permission from Han Peng, TechTown Detroit

These graphs don’t take industry, location, ownership designation, or other individual characteristics of the business into account, but it’s important to note those factors can also have a great effect on an entrepreneur’s or small business owner’s eligibility for funding, as can the application itself.  Knowing how and when to prepare and present your ask is critical to a successful capital raise campaign at all levels, from friends and family loans to venture capital investments.  Stay tuned for a future post with those helpful tips.