Funding Innovation for Entrepreneurs

Innovation is a process that involves creating

, advancing, refining, and executing. Most innovation projects have an unprofitable startup period. To sustain innovation projects, youll need a combination of investment and sweat equity with the promise of reward over time. Large-scale innovation projects can take significant money and many years before they start paying off. Imagine the case of GM and Ford, who are challenged to green innovations that could take 5 years before coming to market. In contrast, small-scale innovation projects are typically more incremental and can have quicker payback periods. Innovation is critical to the lifeblood of an organization, so take the time to develop your plan and line-up funding. Below we share our tips. Self-Funding. If you are fortunate to have a successful, profitable business, take some of your profits and re-invest in new projects. While you might make a few less dollars today, youll be setting yourself up for sustained profitability as you stay a step ahead of the market and your competitors. Make money quickly by securing existing customers as your first embassadors to your new product innovation. Sweat Equity. There is a segment of the American workforce that wants to play a role in major breakthroughs. Does your team thrive on working on the sexy project that could transform the industry? Is your team excited about the upside of breakthrough success? If so, the opportunity to work nights and weekends as you get the project off the ground might be more attractive than youd think. The promise of reaping rewards on the upside of success (often in the form of stock or options)is extremely alluring. You can also create similar arrangements with service providers in which you offer them equity compensation in liu of cash payments. Partners. If you are developing new products and technologies, you may generate interest from peers in your market. Perhaps they would like to jump on the innovation train so that they leap forward in the market. Its much easier to divide costs among 3 players than to shoulder the burden alone. Beyond that, you can leverage the combined talent of your organizations to make progress more quickly. Investors. If youre like me, you know entrepreneurs who started a business, and along the way discovered an adjacent opportunity even larger and more promising than their initial offering. Its hard enough to build one business, especially for resource constrained entrepreneurs. Access the funding you need through current or new investors. While venture funding seems sexy, there are some... To read more about funding innovation for entrepreneurs, go to Sparxoo, a digital marketing, branding and business development blog.

Funding Innovation for Entrepreneurs

By: Sparxoo

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