Creating a business plan to raise capital is a great growth strategy for a new and expanding business. But it's nearly impossible for a startup. Its just too risky an investment for traditional cash investors. A much better strategy is a collaboration with a partner who could benefit from your business and will eliminate or greatly reduce your need for cash.
Artists, for example, have placed their work in cafes to eliminate the cost of a private gallery. The cafes get zero cost decorations. If it's a good collaboration, the art will coordinate with the cafes branding. And by splitting profits of sale of the artwork, both parties benefits both.
This same sort of collaboration can apply to any industry. In fact, a business strategy, especially for cash strapped startups, should include the potential for a collaborator in the planning phase. Take the milk substitute "Silk". A lawsuit filed by the milk industry because of the similar name ended with a collaboration that had the milk industry acting as distributors for "Silk". The agreement not only saved the manufacturers of "Silk" the cost of establishing a distribution infrastructure but also provided a large established network for the product. Everyone won.
Lesson here is to consider all channels in your business from manufacture to retail distribution. Do you see any opportunities for your business and another? Do you have a unique skill or product that can compliment another business? Can you increase THEIR bottom line while reducing your costs or increasing your profits? And, critically, considering this before launching can guide your business strategy, including pricing, identifying the market segment to target, and identifying managerial systems to develop. The end result for the startup is faster market entry, more efficient operations and enhanced profits without a large cash expenditure.
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