1. Business and Financial Planning

2. Financial Plan Shows the reader how all the ideas, concepts and strategies described elsewhere come together in a profitable way. The plan should include pro forma: –Balance sheet –Income statement –Cash flow statement Financing required and sources

3. Financial Plan Balance Sheet –Assests –Liabilities –Equity Income Statement –Revenues – Cost of Goods Sold = Net Income Cash Flow Statement –Operating Activities –Investing Activities –Financing Activities

4. Financial Plan Income Statement –Revenues – Cost of Goods Sold = Net Income

5. Startup Financing As an entrepreneur starting a new e- business, you must be prepared to invest time, effort, and your own money to get your new e-business off the ground. Personal Assets Friends and Family Venture Capital Business Incubators

6. Personal Assets Sweat Equity: putting in time and effort Mortgage Personal Assets: put up property as collateral to a bank Personal loans: taking a loan without collateral (higher interest rate) Credit card/credit line advance: similar to a personal loan (usually a high interest rate)

7. Friends and Family Friends and family investors are family members or friends who invest in a business. Many entrepreneurs successfully solicit startup money from their network of friends and family. A network of potential friends and family investors extends beyond immediate family members and friends, to their families and friends, to their families and friends, and so on. Advantage: It might be the easiest money you’ll ever get. Disadvantage: Putting their money at risk.

8. Venture Capital Investors Venture Capital (VC) firms are organized to invest specifically in new business startups. Typically take a significant equity interest in the firm with in exchange for providing startup capital. May also provide expertise. Typically do not invest for the long term but expect to “cash out” after the business establishes a successful track record and can be sold or acquired by others. There are many established VC firms

9. Venture Capital Investors

10. Business Incubators Have traditionally been government- or university-supported nonprofit organizations that nurture new businesses Provide startup companies with management advice, office space, networking opportunities, and other critical startup services May take an equity interest as well as charge for services Not-for-profit incubators may use returns from equity to reinvest

11. http://www.digitalrhine.com/

12. Commercial Business Incubators Offer startup e-businesses access to the same services offered by nonprofit incubators Are primarily interested in high-technology businesses that can become financially viable quickly and leave the incubator within six months to a year