Loading...
Answers
MenuWhat's the best way to raise funds to pivot my business from a service model (coaching) to a products (books, online classes, planners) model?
I've been providing services (coaching, groups and classes) for over twenty-five years. I self-published a book in December 2018 and now I want to pivot my business to focusing almost entirely on products that I can sell online. I have loads of content that I can repurpose from years of being in business. Plus, I've written four blogs. My biggest issues is funding. I want to hire someone to design some products related to my book. I'm also designing an online course, but really need to hire a videographer and stylist because there are 38 modules that need to be filmed. So I am clear about exactly what I need the funds for. I prefer not to take out a loan and saddle myself with a heavy debt.
Answers
I am not convinced you need an investor for what you are doing. Why give up part of your company and someone else having a say in your dream.
I would start with some simple videos at Udemy, going through that you will learn a lot and move up from there.
You may also consider a local intern to help you sort through the material and put it online.
As an advisor education entrepreneurs for more than two decades, I would need more information to adequately answer your question. If you haven’t already, I would suggest the following to guide you to a solution appropriate for you:
1) Develop a detailed business plan – The business plan will provide you (and potential investors) with the roadmap for your pivot, particularly relative to development costs and timing, marketing and resource needs, and revenue expectations.
2) Build a financial model – The financial model quantifies your business plan. Ideally, the model forecasts a multi-year period on a quarterly basis. This should provide you with an excellent view of the capital risk and potential upside, and may inform of changes that could reduce your enterprise risk.
3) Target the funding – The outcome of this activity should provide you with a true sense of the capital needed for the pivot. From this, your choice of capital options will become clearer.
There are three primary sources of capital that you might be able to access: internal funding, debt or equity.
• Internally generated funds can come from your current revenue stream or personal assets. Many times, this is the preferred choice; you don’t have to go through a financing process, sign contracts or give up ownership. Many times, this source of capital is insufficient.
• Debt is a contractual relationship that provides funding in exchange for a promise to repay within a certain amount of time with a certain return for the lender. Debt often is cheaper capital, but much less flexible in the event that the plan doesn’t materialize as envisioned. Many lenders, particularly banks, will require a personal guaranty.
• Equity is an ownership stake in the business. Capital will be more aligned to your business, however, you will essentially have a business partner that you might not want forever. The capital will be more expensive than debt as it represents a riskier investment. Potential investors could be friends & family, angels or professional venture capitalists.
As you sort out your business model and refine your capital need, the type of capital that will serve you best will begin to become evident. Engaging a professional financial advisor may also prove beneficial in sorting through and sourcing the investor options. I am available to chat if that would be helpful.
Hi! I think to answer this question, really I'd want to know why aren't the services that you've been offering (coaching etc), and your self-published book not providing you with enough funds to develop your online products? Also with the products that you are supplying, are you sure that your target market really wants 38 modules? I would suggest that you first develop a shorter course maybe split into parts, then test it to see if they actually want it? And unless there's a reason, you don't need to supply all your products all at once; but instead phase them in, whilst also using the funds for your coaching business to pay for it.
As a content creator, you can raise funds via Patreon. I recommend packaging pieces of your services for different Patreon Tiers, systematically positioning them in donation hierarchy.
Don't film/create the products in advance. Create the course outlines/syllabi and market the courses first. Talk about your successful track record as a coach, and how you now are going to offer your training in convenient, self-paced products to provide outstanding value. (Talk about how this adds value to them, not about how it benefits you, which they don't care about). State the normal, high price for the for the products, but how you are offering a one-time, steep discount for people who pre-signup and will gain access as the products are created. Then, use this money to fund the creation of the courses. As you create modules, deliver them and ask for feedback. This way, you can incorporate feedback and improve your products as they are being created. At the end, get testimonials/referrals. Even if this initial group of customers results in breaking even (or a slight loss), you are better off than if you created the products with your own or borrowed money, and you also know that they sell on the market place, and you now have testimonials.
If you have lot's of content, do yourself a big favor...
Read "How to Make Money Blogging" by Bob Lotich for $5-$10 on Amazon.
Use his trick of...
1) Run Google Ads on blog posts for 30 days.
2) Start with highest traffic page + move down.
3) Visit the page + hit refresh 10x time, recording the Ad showing up.
4) Then replace your Ad Units on this page, changing Google Ads to the actual site originating the Ad Unit identified in #3.
You'll do this by visiting the site + signing up for the site's affiliate program, so you drive traffic from your site to the Ad site directly, without Google as the Middle Man.
5) You may be very surprised about revenue you can generate with this model.
6) Start with this first, then move on to working on your courses.
I share your sentiment, trying to productize your services.
Bootstrapping is the word that is normally used ... thus:
1. teaming to share profit/ barter trade
2. consider crowdfund as an option
3. digitize coaching as a franchising model - with technical partners' help
4. integrate current reputable apps with very low costs to instantly uplift the service quality and automate major activities.
Actually, this is what I am doing currently. Hope the above helps.
There is only best way that I see as perfect it is Return = Risk × Reward, where Return is the likely financial profit for the investor, Risk is the chance of the profit being realized, and Reward is the projected profit from any one investment. In this way, if the Reward from an investment is projected as 3-fold and the Risk is assessed as 1 in 5, then the overall Return would be 3 in 5, which is not worth doing as it is less than one. But if the Reward for the same Risk were to be 15-fold, the overall Return would be 15 in 5, or 3 to 1, and a worthwhile bet.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
How much potential value does a startup need to have in order to attract VC funding?
Wow, sounds like you have an amazing profit margin. The key is GROWTH. Continuous and stable, with the ability to predict future growth. Therefore, your market niche is very important, to feed the growth curve within an order of magnitude and can't be too vague. As others have mentioned, investors look for a $100-200 million valuation potential, as well as the ability to morph or expand as needed. Contact me if you want to discuss more.TN
-
What exit strategies do angel investors want/prefer for a service business?
Keep in mind that investors invest for returns. Telling a prospective investor that you want his or her money to grow your business but don't plan on ever generating a liquidation event that pays him or her a dividend is not likely going to work; angel or not. You may be better served with debt financing where returns are generated in the form of interest payments not equity value growth. BUT, if equity financing is the plan, you're going to want to develop a strategic exit plan right from the start. That means identifying prospective buyers, strategic channels etc and characterizing the value drivers for each right up front. You'll find prospective buyers come in a number of forms; competitors, bigger versions of you, strategic partners, private equity, etc. Each will value your business in different amounts for for different reasons. Understanding this is vitally important for you to navigate to securing the right money, from the right sources, with the most favorable terms. Once you've qualified and quantified each of them, then determine what (specifically) you're going to need to do to align your business with those prospective buyers generating the highest returns. This will drive your business model and go to market strategy and define your 'use of funds' decisions. This in turn result in a better, more valuable business whether you exit or not. Do it this way and you'll have no trouble raising money from multiple sources. You can learn more about the advantage of starting with a Strategic Exit plan here: http://www.zerolimitsventures.com/cadredc Good luck. SteveSL
-
VCs: What are some pitch deck pet peeves?
Avoid buzzwords: - every founder thinks their idea is disruptive/revolutionary - every founder says their financial projections are conservative Instead: - explain your validation & customer traction - explain the assumptions underlying your projections Avoid: - focusing extensively on the product/technology rather than on the business - misunderstanding the purpose of financial projections; they exist in a pitch deck to: a) validate the founders understanding of running a business b) provide a sense of magnitude of the opportunity versus the amount of capital requested c) confirm the go-to-market strategy (nothing undermines a pitch faster than financial projections disconnected from the declared go-to-market approach) d) generally discredit you as someone who understands how to build a company; for instance we'll capture 10% of our market, 1% of China, etc. Top down financial projections get big laughs from investors after you leave the room. bonus) don't show 90% profit margins. Ever. Even if you'll actually have them. Ever. Instead: - avoid false precision by rounding all projections to nearest thousands ($000) - include # units / # subscribers / # customers above revenue line; this goes hand-in-hand with building a bottom up revenue model and implicitly reveals assumptions. Investors will determine if you are realistic, conservative, or out of your mind based largely on the customer acquisition numbers and your explanation of how they will be achieved. - highlight your assumptions & milestones on first customers, cash flow break even, and other customer acquisition and expense metrics that are relevant Avoid: - thinking about investor money as your money - approaching the pitch from your mindset (I need money); investors have to be skeptics, so understand their perspective. - bad investors; it's tempting to think that any money is good money. You can't get an investor to leave once they are in without Herculean efforts and costs (and if you're asking for money, you can't afford it). If you're not on the same page with an investor on how to run/grow the business, you'll regret every waking hour. Instead: - it's their money; tell them how you are going to utilize their money to make them more money - you're a founder, a true believer. Your mantra should be "de-risk, de-risk, de-risk". Perception of risk is the #1 reason an investor says no. Many are legitimate, but often enough it's simply a perception that could have been addressed. - beyond the pitch, make the conversation 2-way. Ask questions of the investor (you might learn awesome things or uncover problems) and talk to at least two other founders they invested in more than 6 months ago.JP
-
Launching a startup with no job and no savings. Should I get a job or find investors?
Wow, lots of questions here. Let me try to hit them in order: "Should I get a job or find investors?" IF you have access to enough investor capital (not debt and not your savings) and you can get to MVP and still maintain ownership of a sizable majority of the business then do it. IF that means debt financing then only use the debt lines the cost of which can be carried by returns generated by the use of funds. I would prefer to offer a convertible note to prospective investors that can be easily extended throughout both friends and family and seed rounds (up to $2M to $3M) to get to proof in the market. If you can get to revenue and earnings fast enough then you can avoid equity dilution all together. IF you cannot secure that find of funding AND you cannot produce enough revenue from your business to deliver sufficient earnings for you to live on, then by all means, you should find a way to make the money you need and not burn all your savings or mortgage your home If that means short term contract work that's great. Particularly if you can find log term work that is relevant to the business you're building. If that means taking a job then do that. IF you do that, then yes, be transparent with your employer and let them know you're working on your own business also. Hope this helps....SL
-
What are some things I should consider before I decide to give up my day job and focus on my startup full time?
I love this! Congratulations on a smart approach to launching a startup. I got a chance to talk to DHH - founder of Basecamp and hacker. (read about it here: http://blog.unthink.me/what-i-learned-in-1-hour-with-basecamps-founder-david-heinemeier-hansson) One of his biggest pet peeves is the idea spreading like wildfire that entrepreneurs need to jump head on an idea and let the wind take hold. What he suggest and what is greatly showcased by you here is to hold a job and take your startup as the side business until it can sustain itself off sales alone. Don't give equity left and right because if it does take off the last thing you want is to build something you don't own. If you have been acquiring customers for your product before it's built - that means that it should be relatively easy (compared to most) to get sales once you launch. You are already doing the bulk of what needs to happen which is marketing - simply boost your focus on getting referrals and case studies off the initial sales, ask clients about their core reason for handing you their money and drive that message/reason home on everything you from website to branded material to PR articles, etc. If you end up hiring a marketing agency to help with the next steps, look for the added value of programmers in staff so that they can coordinate what's needed once things are rolling. Essentially consider the fact that you need to start marketing it and positioning the product with the right prospect clients, get it launched onto product hunt (i could add it for you) because the truth is that you have 3 months to create a marketing system that is helping you sale. Don't be too afraid of jumping in full time if you can afford at least a few months solvency for yourself and if you are having sales.HV
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.