Access to capital is a chief concern of small business owners.
For many technology companies, venture capital backing provides the best means to quickly expand a business. But in 2008, when the financial industry went into a dizzying downward spiral, so went the pursuit of venture capital for many companies. Venture capital investments fell from $28 billion in 2008 to $18 billion the next year, according to the National Venture Capital Association. This setback didnâ€™t halt everyoneâ€™s efforts, but rather afforded those determined small businesses the opportunity to rethink their business goals.
BidMyCleaning.com was one of them. Launched in April 2008, the e-business provides an online service that matches residential customers with local cleaning services. The company turned a profit after being in business only six months and this past year revenues were at $1.2 million, up from $800,000 in 2009. After not only staying afloat but thriving in a turbulent economy one would think securing venture capital would come easily–this is no longer the case.
So in combating this new reality, the BidMyCleaning team has become more strategic about pursuing venture capital funding and other means to enlarge the business in times of economic hardship. â€śNow that our business model has been proven, weâ€™re looking at finding partners to assist with bringing the business to scale,â€ť says co-founder CEO Raymond Aker, 38, who offers these three tips for making your business more attractive:
1. Entering competitions means strengthening your network and increasing your visibility. Business plan and other competitionsâ€”whether you win or loseâ€”can provide tremendous opportunity. They give potential investors a chance to review your business as well as offer priceless feedback.
2. Create your board strategically. Comb through your teamâ€™s respective networks to find people with venture capital connections and industry or startup experience.
3. Markets are cyclical, so be prepared. As the bottoming out of the U.S. economy showed in 2008, businesses need backup plans. BidMyCleaning sought out local strategic partnerships to drive revenue.
For more on the company BidMyCleaning, read â€śClean Sweepâ€ť in the March 2011 issue of BLACK ENTERPRISE.
Want to know more about how securing capital for your small business? Then attend Black Enterprise’s annual Entrepreneurs Conference, taking place May 22-25, 2011 in Atlanta Georgia. Visit blackenterprise.com/ec for more details. As an incentive BE is offering you a discount on early registration: Enter code BEDG295 and receive $200 off.