About Internet Business
Angels
Internet Business
Angels
(a division of
RWAP
Services - Internet Software and Services) were created to meet the needs of
entrepreneurs who are looking to market their products on the internet and are
seeking advice on the best technologies to use to promote their products or how
best to ensure that a website obtains a more personable touch (engaging
customers by providing a visitor with a pleasant experience and converting
browsers into long term relationships).
When you have an idea for a new business, or a new product,
you need to carefully consider whether this is something you can do on your own
with the right financial backing, or whether you need to involve someone else
with the right business skills to turn your
idea into a viable and prosperous business. Many people get this wrong and
believe that they can go it alone, whereas the easiest way of turning the idea
into a profitable commercial venture would be to sell the idea to one of the
major companies already in a similar field (either in return for a one off fee
or a royalty payment).
If you are seeking pure finance, then visit your bank
manager (or look for a venture capitalist). However, if you think that you
need additional business skills and knowledge to complement your own, you may
want to explore the possibility of finding a Business Angel.
What Are Business Angels?
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Business Angels are known for
providing a wealth of commercial knowledge and business acumen to assist a
failing business or a new one which is struggling to get off the ground.
Normally, Business Angels may be called upon to invest in the company in return
for a share of equity (similar to a venture capitalist), but would normally
insist on having some say in the day to day running of the business in order to
protect their investment and to make the maximum return on their capital.
Some angels have acquired cult status due to programs such as
BBC2's Dragons Den
which allows people to pitch on television for a capital investment.
The idea is that with the
assistance of an angel (or venture capitalist), your business will grow and any
problems in your business plan will be hit as quickly as possible, with a
specialised trouble shooter who can either be employed or bought in (for
example, marketing expertise, manufacturing gearing or financing).
However, the one thing you have to beware of is that anyone who invests in a
business will be looking for an exit strategy, that is to say, how they will get
their money back, together with a return on that investment (typically 40-50%)
as soon as possible, normally through a stock market flotation or sale.
Businesses can be turned around at the expense of your suppliers (for example,
by improving cash flow by making suppliers wait longer for payment) and are
generally taken apart from a purely economical viewpoint - this may or may not
fit in with your business ethics. A
business angel generally offers less investment than a venture capitalist (say
£10,000-£250,000) and will want more hands on involvement in ensuring that your
business turns into a success. Due to the close relationship which you
will form with a business angel, you will need to ensure that you have a robust
business plan, avoid jargon, provide details of how the business angel will get
back a return on their investment and when and you must have a clear idea of how
your business will utilise their capital funding to expand and grow profits.
If you are looking to offer a share in your business in
exchange for capital funding, be careful how you calculate the value of your
business. Many people seeking capital over-value their business and as a result
fail to get funding as they are offering too small a stake in the business in
exchange for capital invested. The general rule of thumb is to take
average profits over the previous 3 years (after payment of your own salaries
and tax) and use a maximum price/earnings ratio of 10:1 - that means that on a
£30,000 net profit, your business is only worth around £300,000 - it's no good
asking someone to invest £100,000 in the company in exchange for a 20% share.
Internet Business Angels do not offer to provide funding or
ask for a stake in your business - rather we provide advice to start-up
businesses to help you get started and in a position to apply for backing from
experienced Business Angels. There are plenty of individual business
angels who may be interested in investing - see the
British Business Angel
Association for more details.
So What Can You Expect from Us?
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If you want to set up your own business manufacturing and selling items, or want
to create a website for your business / idea, then Internet Business Angels can
provide advice to help prevent you from falling at the first
hurdle and ensure that the website which you create is designed correctly and
generates interest in your product; whilst ensuring that people who do come to
your website, stay on it long enough to explore what you have to offer.
This all forms part of getting the right visitor experience
to engage your potential customers, reassure them of the quality of your
products and that your company is reputable and can be trusted to deliver what
the customer wants on time and at the right price.
We have specific sections on how to choose a
web site hosting company, as well as broader design considerations in order to
ensure that you can turn your visitors into customers. These design
considerations are what you should take into account when choosing a web site
designer and looking at their existing portfolio to compare the quality of
designers. We also provide advice on
the most cost effective methods of accepting payments over the internet
and also how to add customer feedback to your website and query forms.
Having created your website, we can assist you with promoting your website
through advertising and search engine optimisation, as well as how you track the type of visitors who
are attracted to your website and the pages which attract the most interest.
This information can then be used to tune your website to ensure that your
efforts are concentrated on the most important parts of your business and also
to ensure that your web site can be easily accessed by the broadest possible
spectrum of customers.
Finally we have looked at how you can provide added
value for your customers, through providing video content and advertising which
is specifically aimed at the specific type of people who visit your website.
This can provide a good means of customer interaction whilst also providing you
with a source of additional targeted revenue.
Once put together into a cohesive approach, this can create
an exciting website which is most likely to be passed on to other people by word
of mouth.
If your business is going to take off and become
popular, you are always in danger of someone copying your ideas and products,
producing rival web sites which directly compete with you. It is now quite
common for people to pass themselves off as another business in order to build
on that company's good reputation and customer confidence. You also need
to beware of counterfeiting of your products and safeguarding the design through
trademarks and copyright. With several
years experience of advising people on legal issues, we have
put
together some guidelines on how to protect your ideas online including passing
off, patents, trademark protection and copyright protection.
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