Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 1 down vote favorite

We have developed a platform here in India for consumers which they can also rate and review. We also provide latest informative articles, "how to" guides, etc, to educate customers. Now, we want to raise a capital from friends and other interested people but do not know how propose our project to them on how will they benefit and earn from this portal.

We have thoughts about featured advertisements, sponsored reviews of the product showing revenue stream they can have if they are going to invest.

Can anyone please share their view point on this ?

share|improve this question
2  
Welcome to OnStartups.com. I have very difficult time following what you're asking. Can you clarify? – Karlson Dec 11 '12 at 16:10

1 Answer

up vote 1 down vote

I think your question requires a little clarification. Are you wondering how to determine your advertising budget, or how to show projections to get investors?

Determining your advertising budget should be factored into the cost of service. Some products are scented water with 30+% of the product cost attributed to marketing, and some products have no money spend on advertising but are still sold. So before you release your product, conclude what your product's price is going to be.

I know at some companies I worked at we would price backwards, like the price of the good sold at retail is $20, so what is our cost of the good, shipping, duties, taxes, distribution, and desired profit. Then you figure out the marketing with what's left.

If you're showing investors return on investment, you need a solid plan on your revenue model. I think the best advice I've ever received in entrepreneurship is build a product you love and find useful, and try to get it to everyone as affordably as possible.

Only seek investor money if you need it to expand operations, not to fund them.

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.