Are you a fanatic about footwear? Do you want to know how to start your own shoe line and make over $60k a month? Afshan Abbas, founder of Fuchsia Shoes, did it! Before Afshan started her business, she quit her job as a software engineer at Microsoft to follow her passion for artisan arts and crafts (including shoes). Over the past 4 years, she's worked to grow her business from $100k in revenue to being on track to make $1 million this year. In this article, we'll tell you how to start a shoe line step-by-step. Follow our guide and Afshan's advice to realize your passion and build your own shoe empire.

1. Get Fashion Design Training and Experience

If you're thinking of starting a shoe line, you probably already have an interest or some experience in fashion design. However, shoe design isn't a business to take lightly. It's necessary to know what you're doing (or at least partner with someone who does!). The best way to get training in the retail shoe industry is to attend a school that features a program in fashion design or retail. Even better, you can find schools devoted to fashion design with a department that focuses on shoe design and development. Here are a few to consider:

• Fashion Institute of Design and Marketing
• Fashion Institute of Technology
• Pensole Footwear Design Academy

You also should consider classes or a certification course in business and/or entrepreneurship. This will help you tremendously with the non-design aspects of your shoe line.

Work in the Retail Industry

Though helpful, degrees and certifications are not a requirement to start your shoe line. They're also not an indicator of your chances of success. However, it's best to have experience in the retail industry. Work in areas where you can gain an understanding of fashion buying and the things that drive consumers to purchase particular products (e.g. Why do people buy this shoe brand over another brand?). This experience can also help you network with others who may become key allies in your quest to start your own shoe empire.

2. How Do I Start My Own Shoe Line? Start Researching!

We spoke with Afshan to get her insights and tips on how to start a shoe company and create a profitable e-commerce business. You can watch part 1 and part 2 of our interview with Afshan to hear her story.

[su_youtube url="https://www.youtube.com/watch?v=Z1Iz4tTVrZE"]

Afshan explained that she did quite a lot of research before launching her shoe line. [su_quote]I studied the artisan market. It turns out it is a $32 billion industry.[/su_quote] Analysts project the global footwear market to reach a value of over $500 billion by 2027. And if you want a slice of that pie, you must narrow down your market and make key choices that will guide the course of your business. The easiest (and fastest) way to open a shoe store is to buy one that’s already up and running. You can check business listings to see what’s available in your area and how much you should expect to spend.

Questions to Consider When Researching

We'll help you answer some of these in the next sections, but here are some questions to research and consider before you proceed:

• What is the market analysis of the entire shoe industry?
• Are you making active, non-active, or both types of footwear?
• What is your niche in the shoe business? (See Step 3)
• Do you want to be gender-specific?
• Who is your competition?
• Are you designing your line or do you need to find a designer?
• What are the costs of your supplies and where will you get them?
• Do you intend to mass-produce your line?

3. Determine Your Niche and Sales Platform

[su_quote]When you're starting a shoe company, figure out what your niche in that shoe business would be because it's a very crowded market. And if you are going to do something that other people are doing, it will be a really hard sell.[/su_quote] To solidify Afshan's statement, here is a list of the 20 "best" running shoe brands. You can find a similar list for most styles of shoes. To gain a foothold (get it?) in the market, you must determine how your shoe line will stand out above the competition. For Fushsia Shoes, Afshan and her team ran with (I can't stop!) a luxury ballet shoe niche. Some other niche examples to research for inspiration include:

• Keen - Known for their Uneek shoe made from recycled plastic and shoes that accommodate work and outdoor activities (steel toe, waterproof, slip-resistant).
• Nobull - Marketed to the CrossFit crowd. Nobull makes stripped-down training shoes for athletes.
• Simon Miller Shoes - Luxury thick-soled shoes and boots along with designer platform and heel shoes. They also have a vegan leather collection.
• By Far - Designer shoes that are a throwback to the '80s '90s and early 2000s.

Here are some questions you can ask yourself when trying to determine your niche:

• Can my shoe line solve a problem?
• Will it market to a specific audience?
• Will my design offer a distinct improvement over other brands?
• Is there something that makes my line special?
• Is there a section of the market that is underserved?

Ecommerce is the Way

We won't tell you how to run your business. But if you haven't noticed, brick-and-mortar retail spaces are being slaughtered by ecommerce (pandemic aside). Unless you own an existing space or have access to free rent, determining the sales platform of your shoe line is an easy decision. Here's what Afshan had to say on the subject: [su_quote]We're trying to grow this shoe company by massive numbers, and getting caught up in brick-and-mortar will halt that. With ecommerce, the sky is the limit.[/su_quote] If you're not experienced with ecommerce or need to polish your skills, edX, Udemy, and Coursera offer excellent courses on the subject.

4. Write a Business Plan

Every company needs a business plan. It's an essential document that summarizes the research and decisions you made about the course of your business. It acts as a guide that lays out your ideas and serves as a quintessential document for loan applications or investor recruitment.

What's in a Business Plan?

• Market Analysis
• Mission Statement
• Startup and Operating Costs
• Marketing Plan (Target Market)
• Supply and Manufacturing Chain
• Sales Funnels

Templates

• Startup business plan template
• U.S. Small Business Administration Business Plan Guide
• 500 sample business plans
• One page business plan template

How Much Money Do You Need to Start a Shoe Line?

In order to complete your business plan, you must determine the startup and operating costs for your business. Doing so requires you to assess and decide the scale of your operation. Afshan's business started as a global venture with domestic and international customers. Her operation, though small when compared to a brand like Nike, was actually large in scale for a startup shoe line. We asked her about Fuchsia's startup costs, and she said: [su_quote]When we started, we were 4 partners. And between the 4 of us, we invested $50,000.[/su_quote] To put things into perspective, here are the average startup costs for a small, medium, and large-scale shoe line.

• Small - $30,000
• Medium - $110,000
• Large - $200,000 and up

Remember, you can always start small and scale up as you increase your revenue and streamline your operation.

5. Create Your Brand

Once you determine your market and niche, it's time to create your brand. Your brand differs from your product because it is the means by which people identify your product. For example, when you see a "Swoosh" on a pair of shoes, you know they were made by Nike.

What Makes Up a Brand?

There are many elements to consider when creating your brand, but here's a short list:

• Logo
• Colors
• Font and Typography
• Web Design
• Story

Branding Resources

Remember that your brand should be distinct, memorable, scalable, and easy to apply. It's not a simple task, but neither is designing and manufacturing a shoe, as you'll see in the next steps. To help you, here are 101 brand-building tools and a great branding resource from the experts at HubSpot.

6. Choose a Business Name

Business names are more important in some industries. The name of your shoe line is the direct connection to your brand. When choosing a name, consider what you want people to think when they hear it, and think about the following tips. If you need help to get started, try an A.I.-powered naming service like Namelix or BNG to point you in the right direction.

Avoid a Name That is Hard to Spell

Since you'll likely engage in an ecommerce business, choose a name that's easy to spell and find on a web search. Don't risk losing potential customers because they can't remember how to spell it correctly.

Don't Pick a Name that Limits Your Growth

Think big when choosing! You don't want to limit your growth just because your business name is too narrow. For example, what if "Nike" had named themselves "Nike Shoe Retailers of Oregon?" It would have limited their potential to grow into an international brand that also markets other apparel.

Secure the .com Domain

Before picking your name, do a thorough internet search and check the availability of the domain name and related spellings. If someone else has already established the name, it may be wise to reconsider. You can check the domain here and register it with Google, GoDaddy, or Namecheap.

Test it Out

Afshan and her team chose Fuchsia Shoes, and the title of her webpage is "Fuchsia Shoes: Luxury Ballet Flats." This works wonderfully with her brand considering people recognize fuchsia as a beautiful color and associate it with a flower that is equal in that respect. Once you choose your name, talk to others about it to see if it represents your ideal branding. If you need some help, you can read this article with 12 tips on how to name your business, and be sure to register your name at the federal and state levels.

7. Register Legal Entity

Once you've chosen a name, it's time to register your business for taxes and establish a legal structure. Before choosing a business structure, do your research and work with an accountant or business attorney to maximize your legal and tax benefits.

Licenses and Permits

Aside from your legal structure, you must also determine whether your business requires specific licenses or permits to operate. No worries! The SBA has a tool you can use to check.

Legal Structures

There isn't a standard legal structure to start a shoe line. You have five base options to review with your accountant or attorney: Sole Proprietorship, Partnership, Corporation, S Corporation, or Limited Liability Corporation. The IRS has a great resource to help you better understand these structures.

Limited Liability Corporation (LLC)

Though there's no standard for a shoe business, you'll most likely register your business as an LLC. This will allow you to protect and separate your personal assets from your business. Also, you can pass on profits and losses from your business as personal income without corporate taxes. However, we cannot stress enough to find a qualified attorney or accountant before choosing your legal structure.

8. Funding Your Shoe Line

Think of funding as a two-step process. First, there is funding to build your team and create initial designs, sketches, and prototypes. Then, you'll require more funding for manufacturing and larger-scale production and distribution.

How Do I Raise the Money?

As we explained earlier, there are three scale tiers of startup costs to start your own shoe line (small, medium, and large). Your funds to launch can come from a variety of sources:

• Personal funds
• Personal loan from family or friends
• Business investors (Afshan's path to launch)

The SBA also has loan programs and other funding programs to help small businesses launch. Another option, if you have good credit, is to use a credit card with an interest-free period to help launch things. Ideally, you'll make enough money to pay off the card before the interest kicks in. You can also try crowdfunding, a home equity loan, or a rollover for business funding from your retirement plan (ROBS). However you obtain your funding, be sure to understand the risks before taking on any debt. If you want to educate yourself further, the SBA has a great course on business financing.

9. Build Your Team: Sketches & Shoe Designs

If you haven't already, the next step is to bring your ideas into reality by sketching and designing your shoe line. You may think, "How can I create my own shoe line if I'm not talented at shoe design?" Don't worry! It's not a deal-breaker—you just need to build a team that can help. When Afshan started her business, she was working for Microsoft as a software engineer. [su_quote]What inspired me to start a shoe business was... I was traveling across different parts of the world when I was with Microsoft, and I would come across these beautiful, local artisan arts and crafts that I would find and bring back to Seattle.[/su_quote] She took her affinity for local artisan arts and crafts and worked with them directly to create her shoe line. You can also hire local artisans to sketch and design your shoes. NOVICA and the Unicef Marketplace are good spots to find artisan designers. Look at their products on those sites and reach out to them directly. However, if you're short on local talent, there are other options.

Freelance Designers and Software Shoe Designs

There are several freelancing sites on the web with a pool of shoe designers who can help you turn your ideas into reality. Upwork and Fiverr are two trustworthy sites where you can explain your ideas and negotiate rights and pricing before hire. If you want to design your own shoes, there are software programs to assist. Shoemaster and Romans CAD are two design options that allow you to create 2D or 3D models you can use for prototyping.

10. Create Prototypes and Analyze Materials

[su_quote]In the beginning, [our investment] was mostly spent on research [and] prototyping.[/su_quote] As Afshan explained, the prototype stage is key to developing your shoe line. You must review your designs and take into account all of the materials that go into creating the shoe. They must be financially viable for manufacturing, and you may need to alter your design for the shoe to be wearable.

The Mockup Shoe

The first version of the prototype may be a non-wearable "mockup" shoe made with low-quality materials. Create this shoe to get a full visual of the patterns and designs. It helps determine if the shoe is feasible for manufacture.

The Final Sample

Your final sample is a base production shoe and is the launch point for any shoe line. This is the shoe to bring to manufacturers for evaluation and into pitch meetings for potential investors. You'll also use your prototypes as the base for your marketing campaigns.

11. Patents and Trademarks

In the shoe line business, it's important to protect your designs and brand by filing for patents and copyrights with the United States Patent and Trademark Office. This way, if someone steals your designs or logos and tries to profit from them, you're legally entitled to payment or royalties. For filing, you can find an experienced patent and trademark attorney, or the U.S. PTO has all of the information you need for patent and trademark registration on their site. They also have a search function so you can see if you're not infringing on someone else's design before you begin.

Keep Track of Everything

An important note before filing or working with an attorney: During your shoe line development, keep a record of your designs and ideas. You can use a platform like Evernote (it syncs with multiple devices) or XMind (for professional prototyping) to keep things organized and well-documented. It's important to keep your notes as a record of a claim on a patent. When you develop your prototype, photograph it extensively and store the files securely.

12. Manufacturing: How Do You Get a Shoe Made?

With your designs, prototypes, patents, and trademarks in place, it's time to secure the manufacturing arm of your shoe line. In our connected world, there are a lot of options. But first, here are some questions to answer before you go to production:

What is the Location of the Manufacturer?

Where you manufacture is a key part of your brand identity. Ever notice how some companies stamp "Made in the USA" in large print on the side of their box? Be mindful of your choice if you intend to integrate your manufacturing process into your brand. Also, if you intend to import your shoes from another country, you could face import taxes based on the country of origin. However, sometimes it's cheaper to import the item and pay the fee than to have it manufactured in the U.S. Either way, it's a calculation you must consider when choosing a manufacturer.

Does the Manufacturer Have Minimum Order Requirements?

Most manufacturers require a minimum quantity with each order, and it can cut deeply into your budget if you're not prepared to make a quick turn on revenue. Review the requirements from any manufacturer before signing an agreement.

Can Your Manufacturer Handle Growth?

[su_quote]For the last four years, I have been working on building an infrastructure on the supply chain side. We literally started from 200 pairs a month, [and] we are at a point where we can do 1,000 pairs a month.[/su_quote] Like Afshan, you'll want to start small and should research standard shoe sizes customers typically order. Ideally, your business will grow, so you want to be sure that your manufacturing arm can handle growth. This is always a work-in-process, but it isn't fun or profitable to pause due to supply issues.

What's the Price Point of My Shoe Line?

Pricing is deeply rooted in the amount of funding you have and your brand. Lower-end brands sell shoes for as low as $20 – $30 per pair because brands work to keep their materials and manufacturing price point low. However, luxury brands sell at prices starting at $250 and can increase to over $1,000 based on perceived value. Before choosing a manufacturer, you must review your branding and price point. Then you can match up with a manufacturer who can deliver in your range.

Tech Pack Submission and Manufacturing Resources

With those questions answered, you must create and submit a tech pack. It's a package that contains all the designs, specifications, and components necessary to turn your prototype into a finished product. Think of it as a blueprint for your shoe design. There are thousands of manufacturers in the world to develop your shoe line, but here are a few standouts:

• Otabo
• Italian Shoe Factory
• Modern Vice
• Alanic

13. Packaging and Distribution

A shoebox says a lot about a brand, and it's one of the top marketing opportunities in the shoe business. Top shoe lines deliver shoes in a box that prominently features their label as many people keep and reuse shoeboxes for years. To keep with this industry trend, here is a list of custom shoebox manufacturers:

• The Premium Boxes
• The Custom Printed Boxes
• The Printing Daddy
• Fantastapack

Walking Your Shoes from Point A to Point B

The last element of the fulfillment process is shipping the product safely from your site to the customer. It's important to work with various shipping agencies (UPS, FedEx, DNS, USPS) to find the lowest prices to ship your goods. Otherwise, it can cut into your profits.

14. Establish a Marketing and Sales Plan

With your supply chain in place, the last step before opening your shoe line is establishing your marketing and sales plan. Your marketing strategy is what your business will thrive on. Base it on the extensive market research put into your business plan. Forbes has an excellent resource on developing a marketing strategy. A sales strategy defines your approach to selling your product. Both plans are essential to revenue generation and should be two of your biggest investments. If you don't have experience, consider hiring a marketing and sales consultant through a freelancing site like Upwork.

Digital Marketing & Social Media

Digital marketing means engaging potential customers on digital platforms through email campaigns, newsletters, digital advertising, search engine optimization (SEO), and social media. The key to digital marketing is that it nets a higher ROI (return on investment) than traditional marketing methods.

Social Media

Your social media presence is essential to your brand and is a great way to engage with your customers. It's also the primary method you can use to obtain analytics and figure out better ways to market your product. Interact with your customers via posts and encourage them to post pictures about your shoe line! Afshan used social media to develop marketing relationships with influencers who are also sustainability advocates. Through those relationships, she was able to increase her brand's reach, directly access her target market, and turn her customers into marketers.

Website

If you're starting an ecommerce-based business like Afshan, then your website is your storefront. That means you need to invest heavily in designing and optimizing your site. If you’re not good at web design or don't have experience, there are a lot of resources to help you find a reliable web designer and webmaster to run your site. However, as an ecommerce business, work with a designer and webmaster with experience setting up and maintaining an ecommerce shopping cart.

Refine Both Strategies and Watch Your Revenue Grow

Fuchsia's revenue jumped from $150k in 2019, but they're already at $400k in 2020 and on track to do $1 million by the end of the year. We asked Afshan what contributed to the large jump in revenue and she said, [su_quote]I think we got really good at the sales funnels and our marketing and being able to run and scale that marketing with a positive ROI (return on investment).[/su_quote]

Conclusion

With these steps, you now know the essentials and have resources on how to start a shoe line. As we said, analysts expect the shoe industry to grow over the next decade. So get started now to make your presence known and take your place. To send you off, here's one final piece of advice from Afshan on how to be successful in the industry: [su_quote]Coming this far, [it] was having grit. We failed ten times, but the eleventh time it worked. So, it's about repeating the process, trying out different things, and figuring out what works for you.[/su_quote] Do you have any experience in the shoe or fashion industry? Let us know what you think!

Every interaction counts in the dynamic realm of sales. Each prospect holds the potential for growth. That’s why mastering the art of opportunity management is crucial to your success in a competitive market.

We’ll explore opportunity management by guiding you through its definitions, synonyms, and fundamental goals within the sales landscape. We’ll provide strategies, best practices, and software recommendations to empower your business to manage sales opportunities effectively.

[su_note note_color="#dbeafc"] Click on any of the links below to jump straight to the section that interests you, or just read on.

• What is opportunity management?
• Sales opportunity management goals
• How to manage sales opportunities
• Best practices for managing the sales process
• Opportunity management software
• Start managing opportunities better [/su_note]

What is opportunity management?

Opportunity management is a collaborative process for businesses to identify and pursue sales opportunities. The process is used to track and manage opportunities throughout the sales pipeline to increase sales and revenue. Opportunity management helps businesses:

• Gain insights into customer needs and preferences
• Prioritize deals that are most likely to close
• Optimize internal resources by focusing on leads with the highest chances of conversion
• Target customers with personalized offers
• Strengthen their sales approach

Activities in the opportunity process generally fall into one of three categories:

1. Lead management: You want to take leads through the lead generation software, qualifying, nurturing, and conversion process.
2. Process tracking: This refers to tracking and analyzing who's in your pipeline, their path to becoming a customer, and the communication.
3. Process improvement: You’ll also want to review your process, disqualify poor fits for your service, and remove wasteful steps.

Synonyms and definitions

There are numerous terms that you will see used in management opportunity discussions. We’ll discuss:

• Synonyms for opportunity management
• Sales leads
• Sales opportunities
• Opportunities in customer relationship management
• Differences between leads and opportunities

Synonyms for opportunity management

There are some terms you will see used interchangeably when researching opportunity management, including:

• OM
• CRM opportunity management
• Pipeline management
• Sales opportunity management

They all mean the same thing: identifying, pursuing, and managing sales opportunities.

What is a sales lead?

A sales lead is a person or business that might become a customer. Leads are the earliest stage of the customer journey. Leads might not be ready to make a purchase, but they need what you offer.

A lead will always be someone who has expressed interest in your business by clicking on a link, filling out a form, signing up for an offering, or asking a question. You might find sales leads through:

• Advertising
• Direct mailings
• Referral from an existing customer
• Direct response through advertising or publicity
• Trade shows
• Third parties
• Other marketing efforts

What is a sales opportunity?

A sales opportunity is further in the lead management pipeline than a sales lead. When a contact becomes a sales opportunity, they are a qualified prospect, likely to become a customer.

By qualified prospect, we mean you have already interacted with them, established their pain points, and confirmed your product or service will solve their problem.

Once you have reached this stage, you are more likely to make a sale.

Sales opportunity planning is a complex multi-step process including researching, then qualifying the individual, and then developing a strategy to solve their problem. It is helpful to have a documented process, guide, and training to help your sales team manage opportunities.

Some of the best ways to identify or create new sales opportunities include:

• Creating buyer personas
• Using a CRM software to manage client interactions
• Pursuing customer referrals
• Establishing affiliate programs or third-party referral streams
• Going to events, expos, and conventions

What is opportunity in CRM?

In customer relationship management (CRM), an opportunity is a qualified lead that has shown interest in your product or service—and with the proper nurturing is likely to become a customer.

Opportunities are used to manage your business, not people or client companies. They’re identified and tracked through the sales process from inquiry to contract to satisfaction. Measuring opportunities is most successful for longer sales cycles and maintaining ongoing relationships.

What is the difference between opportunity management and lead management?

Opportunity management is a subsection of lead management. Lead management focuses on the acquisition, assistance, tracking, and converting of new clients; opportunity management is focused on assisting, tracking, and converting the leads who are most likely to convert into customers.

As you can see in the picture below, opportunities are several steps closer to becoming customers than leads, but they’re still part of the lead management process.

Sales opportunity management goals

Opportunity management is used by a business owner, sales manager, or sales opportunity manager to increase three main metrics:

1. Conversions
2. Revenue
3. Profitability

To attain these objectives, sales entities need a system for overseeing and monitoring opportunities within the sales pipeline. Additionally, they should employ strategies to engage with potential clients throughout the sales journey, ensuring the timely delivery of relevant communication aligned with their decision-making stages.

Next, let’s look at how to manage sales opportunities.

How to manage sales opportunities

The opportunity management process can be complicated, but if you use a strategy and implement a sales pipeline, you’ll find the sales process gets easier as time goes on. You’ll want to:

1. Understand the sales cycle.
2. Track communication.
3. Standardize the sales cycle.
4. Create a sales pipeline.
5. Research the prospect.
6. Qualify leads.
7. Follow up appropriately.
8. Review your process.
9. Disqualify dead prospects.
10. Refine the opportunity management process.

Understand your sales cycle

Potential customers will go through a series of steps before they become paying customers. In most purchasing decisions, prospective customers will:

1. Realize there is a problem they need solved.
2. Research how to solve the problem. It’s common for purchases to start with an online search, so part of your business strategy should be content marketing optimized to help potential customers understand how to solve the problem.
3. Research alternatives to solve the problem. Customers might look at options like which company to use, reviews, and alternatives such as replacement or repair. You’ll want to address all of these to help build customer relationships and prepare them for what comes next.
4. Request information. Customer behavior, like sending an email or signing up for a free trial, shows they are interested in your business. You need to provide them information in a timely manner.
5. Choose a provider. Customers might contact a single provider or multiple. Then they’ll choose the one who solves their problem best.
6. Make a purchase. Once the customer has chosen you, they will want you to solve their problem and pay as conveniently as possible.
7. Evaluate the product or service. Your new customer will evaluate your work, so make sure to ask for customer feedback.
8. Appreciate the company’s work or become dissatisfied. Hopefully, you’ll have another satisfied customer and be able to build an ongoing customer relationship. Do everything you can to fix it when customers aren’t happy with your product or service.
9. Make future decisions based on their experience. Existing customers will make decisions based on your customer relationship management. Satisfied customers will probably return to do business with you. They might even refer their friends.

In our interview below, Neel Parekh discusses how he approaches the opportunity management process. Check it out.

https://www.youtube.com/watch?v=kVyLriqFVdc

Track communication

As a busy entrepreneur, you’ll want to track communication during the opportunity management process. CRM software will help you track all the communication you have with sales leads. There are numerous sales CRM tools you can use, which we discuss in our reviews of client management software.

The most important thing to know right now is you need all your points of contact to connect to the CRM software. This allows you to have a single place for you (or your sales team) to refer to previous customer data, like referrals, previous conversations, and customer lifetime value.

Standardize the sales cycle

The next step of your opportunity management strategy should be to define exactly what your sales team does when managing sales opportunities. This step will probably be performed by a sales manager who is familiar with the opportunity management process flow, while the next step will normally be performed by someone well-versed in automation software.

The more defined the process is, the easier it will be to manage your sales and automate portions of it using a sales funnel.

Create a sales pipeline

Sales pipeline management normally requires someone well-versed in automation technology. It helps you effectively manage your sales opportunities by providing the steps your sales team needs to take while managing opportunities. Each step will have a specific goal.

Many of the tasks can use automation. For instance, when someone books an appointment online, you can automatically send an email that confirms the appointment through the CRM system. The more tasks you can automate, the more efficient your sales representatives will be and the more potential sales you can close.

Research the prospect

This step is important. According to LinkedIn’s 2022 State of Sales report, 42% of potential customers leave because sales reps don’t understand their needs.

Salespeople should prioritize opportunities and focus on the most qualified leads first. Before reaching out to a lead, the sales team should research the prospect to understand as much about them as possible. You’ll want to identify sales opportunities based on their business objectives, pain points, budget, and team size.

Understanding this information creates effective sales opportunity management because you can provide the prospective customer with the right information at the right time without repeating yourself during each interaction.

Qualify leads

Not all sales opportunities are created equal. During the early stages of customer relationships, the sales rep should gain valuable insights to establish what the customer's needs and limitations are; then they should help them make informed decisions. 

One of the things many small business owners struggle with is trying to make everyone happy. While everyone likes closing deals, some customers aren’t a good fit. Just because they don’t have purchasing authority isn’t a reason to rule them out, but as you learn more about the customer, you should consider whether they are a product-service fit. 

If they aren’t a fit, consider referring them to someone who would be a better fit. Using this strategy for sales lead management can open up business opportunities.

Want to learn more? Check out our interview with Joshua Brown. He explains how bringing in a sales manager helped him double his business in a year.

https://www.youtube.com/watch?v=hDVizUeYuIU

From this point on, only qualified leads should be considered sales opportunities.

Follow up appropriately

As customers progress through the sales opportunity stages, they’ll want different information. At first, they’ll want to understand what impacts the success at solving their problem, followed by looking at your product catalog, then they’ll want to know which product or service will help them best, and, finally, how to become a customer. 

Make sure to tailor the information you send them to the individual, reiterate your key points, and help them progress to making a data-driven decision.

While you’ll want to keep track of lead conversion ratios, a low ratio doesn’t always mean you’re missing potential sales. It can also mean that you need to narrow the requirements to identify sales opportunities.

Review your process

In addition to managing opportunities, you need to review your opportunity management process. You should have sales data that paints a picture of where your sales funnel is doing well and where the sales strategy needs improvement.

Your opportunity management system should have a dashboard that tracks:

• Churn rate: This key metric represents the rate a business loses customers over time. A low churn rate is better because it means a business is losing fewer customers and potential revenue.
• Win rate: The percentage of sales opportunities that a sales team successfully closes. A higher win rate means a sales team is more likely to close more opportunities, which can make a business more profitable.
• Sales cycle length: Tracks a prospect as they move from lead to customer. A shorter sales cycle length means a business can earn money faster.
• Average deal size: The average revenue generated per deal. This metric helps businesses understand the value of deals and plan for the future.
• Customer satisfaction: This helps boost sales and is a key factor for acquiring a new customer base.
• Lead response time: In some industries, a quicker response to a sales prospect's inquiry can increase the chances of getting a sale.
• Net promoter score: This is a reflection of how well a business satisfies its customers. It’s derived from a simple survey question: “On a scale from 0 to 10, how likely are you to recommend this product or company to a friend or colleague?”

You might also want to keep track of the following metrics on the dashboard.

• Revenue growth rate
• Gross profit margin as a percentage of sales
• Net profit and net profit margin
• Cash flow
• Accounts payable turnover
• Cost of goods sold
• Customer acquisition cost

Disqualify dead prospects

Many CRM systems charge based on the amount of automation actions that are used. Leads that have been dormant for an extended period should be removed from the sales funnel. You might not want to, but you’ll close more deals if you focus on hot leads.

Part of opportunity management is focusing sales activities on people who are interested. Don’t jeopardize your business over people you have to chase down. Focus on identifying the difference between qualified leads and dead leads so you can find a way to stop sales outreach to people who are unlikely to respond.

Explaining automation actions and their impact on business expenses

Automation actions are any step taken in an automated workflow. Companies will often bulk-send automated emails to people on their email list. If you have 20,000 people on the email list, that would cost between $230 and $535 per month on MailChimp.

Imagine 10,000 of them haven’t opened an email in three months. You can cut your costs by creating a new list called inactive contacts, stop sending those people emails, and save between $120 and $185 per month.

That’s why paying attention to the automation actions is important during opportunity management.

Refine the opportunity management process

Opportunity management is the process of improving your sales results, so make improvements when you find something isn’t working or isn’t adding value. Each sales call will be more productive when your sales reps can focus on closing the best leads.

Best practices for managing the sales process

It’s important to follow opportunity management best practices so you can avoid many of the reasons a sales team fails to close a deal.

Remember, over 40% of potential customers leave because sales reps don’t understand what they need. This is preventable with better training and a good CRM software.

That means you’ll need to focus on following best practices to close more deals. Best practices like:

Set responsibilities and tasks

Each step in the opportunity management process should be well defined and have a designated employee or team who handles it.

When you first start, you might be the one working on all the tasks, but as you grow, you might need to hire sales reps, sales managers, and maybe even entire sales teams.

Leverage data

You’ll have data coming in from marketing campaigns, accounting software, social media, sales calls, and other sources. If you don’t have all the information in real time, your sales marketing strategy probably won’t work. Make sure your opportunity management system provides you with the information you need to succeed.

In addition, you’ll want to automate to simplify data entry. You can do this by investing in a CRM with opportunity management tools.

Opportunity management software

Business owners and sales reps need CRM software to adequately manage their account planning, contact management, and communication. A good CRM software will also help decision-makers, project managers, and sales teams identify data-driven sales opportunities and conduct risk management.

Let’s discuss the CRMs with the best opportunity management tools and systems.

Jobber

Jobber is one of the most user-friendly opportunity management systems. Monthly plans start at $69 for one-person businesses, but they get dramatically more expensive if you want the best features. 

The $349-per-month plan will make it where all you really need to run your business is your equipment and Quickbooks.

Monday Sales CRM

Many sales teams use Monday.com’s Monday Sales CRM to identify sales opportunities and manage their interactions. They have four tiered plans starting at $45 per month for three users and increasing to $99 monthly before going to the quote-only enterprise plans.

Learn more in our overall Monday.com review.

Salesforce

Salesforce is one of the most sophisticated CRMs on the market. Pricing starts at $25 per user but goes up to thousands per month.

One of the real benefits of this sales opportunity management platform is that it has some of the best training courses in the opportunity management field. This is a real positive for people who want to save money by setting up their opportunity management process themselves.

Check out Salesforce.

Start managing opportunities better

We’ve concluded our journey through the realm of opportunity management. We've navigated the depths of its meaning, explored synonymous terms, and outlined the fundamental goals that set your business on the trajectory for success in sales.

Understanding how to manage sales opportunities is not merely a skill; it's an indispensable strategy for any thriving business. Armed with best practices for managing the sales process, you now possess a toolkit for optimizing and maximizing the potential of every interaction.

Yet, in this digital age, the integration of technology plays a pivotal role. Opportunity management software has emerged as an ally to streamline and enhance your efforts. They create a structured approach to handling opportunities and boos overall sales efficiency.

Mastering opportunity management isn't just seizing moments; it's about creating a sustainable, strategic approach to unlock success. We hope the insights shared above help you harness the full potential of every sales opportunity.

Which parts of the sales process would you like to learn more about?

Are you struggling to find new business startup loans? Don’t worry; you’re not alone. Fifty-nine percent of business owners do not have their funding needs met, but we’ll show you how to improve your odds of getting startup business loans.

Startup companies can still get loans. Lee Smith, the owner of Urbanity, was six months out of college when he wrote a 75-page business loan and got a $250K loan. Today he’s making over $1.5 million selling clothes. That’s a great return on investment, and it shows how much the right plan and funding can help you succeed.

We’ve partnered with National Business Capital (NBC), the number one online site for getting small business loans approved. They’ve helped secure over $2 billion in business loans for over 25,000 small businesses like yours. That’s an average of $80,000 for business startups.

[su_note note_color="#dbeafc"] We’ll explain:

• What is a startup business loan?
• How do startup business loans work?
• What are the best startup business loans?
• How to apply for startup business loans
• Alternatives to new business startup loans [/su_note]

What Is a Startup Business Loan?

A startup business loan isn’t a specific type, but a catch-all for business loans you can get to start a business. Startup business loans are one of the hardest types of business loans to get. Since the company has not built a track record, the decision is made based on how well the lender can tell the business owner thought through the business plan.

Lee Smith, the owner of Urbanity told us:

[su_quote]I sat down for two months and put together a 75-page business plan. I went and got a loan for a quarter million dollars.[/su_quote]

Check out our interview with Lee below:

[su_youtube url="https://youtu.be/_wUc28d8KkE"]

Why Is It Hard to Get a Startup Business Loan?

It’s hard to get a startup business loan because startup businesses often fail in the first five years. In those cases, a business startup loan might not be paid back, which causes lenders to be more cautious when lending to a startup business. Don’t worry! There are ways to improve your odds!

How Do Business Startup Loans Work?

A startup business loan will normally rely on the personal credit history because the business does not have the same financial records and credit length to evaluate whether the risk is worth taking. Because banks back the business owner, a business startup loan often requires a personal guarantee. You’ll want to make sure you have the following before you apply for business startup loans:

• Personal Credit Score
• Tax Returns
• Bank Statements
• Accounts Receivable
• Credit Card Sales
• Unpaid Invoices
• Business Plan
• Legal Documents

Keep reading for more about each one.

Personal Credit Score

You’ll want at least a 650 minimum personal credit score when applying for a business startup loan, but higher is better. A higher personal credit score improves your odds of approval and normally reduces the interest rate.

Tax Returns

You’ll need at least two years of personal and business tax returns for most lenders. National Business Credit does not normally require tax returns.

Bank Statements

You might need three months to three years of bank account statements depending on the lender. National Business Credit is typically three months. 

Accounts Receivable

These help lenders establish how much money people owe your small business and can be used to help secure financing. 

Credit Card Sales

This document is another proof of revenue. It also helps lenders calculate a commonly overlooked cost of doing business.

Unpaid Invoices

Unpaid invoices fall into two categories:

• Money owed to the company: Invoices that a customer has not paid yet could be used to secure startup loans.
• Invoices the company needs to pay: These invoices will negatively impact your loan because they reduce the amount you can pay towards the loan. Try to clear as many of these as possible before applying for a startup loan.

Business Plan

Be prepared with a business plan that shows lenders that you have considered how you will make your business thrive. 

Legal Documents

Remember to have copies of your business license, LLC or incorporation documents, EIN, and other documents that prove you are a legal business entity. Corporations are commonly viewed as more credit worthy because they have more reporting responsibilities that make it easier for companies like Dun & Bradstreet (D&B) to analyze your credit.

Check out our blog about how to get a business loan to learn more about D&B and other business credit-building tips.

What Are the Best Startup Small Business Loans?

The best small business startup loans are the ones you can actually get! Fortunately, National Business Credit has some loans that are really simple to get:

• Equipment Financing
• Asset-Based Lending
• Small Business Administration Microloans
• Personal Loans
• Franchise Loans

Let’s look at each.

Equipment Financing

An equipment loan requires a 650 FICO score OR $120K in annual sales. The equipment secures the loan, so if you don’t pay the business loan, you won’t be able to operate. Find out more about NBC’s equipment loans.

Asset-Based Lending

If you have assets to bank your startup business loan, you can qualify for a business loan with three months of bank statements and a soft pull of your credit. People with higher credit scores and higher asset values are more likely to qualify for asset-backed startup loans.

Personal Loans

If you have stellar personal credit, you can qualify for a line of credit or a personal loan and use it for your startup business financing. Alternatively, you can refinance your mortgage and pull out equity for your startup business.

Franchise Loans

Franchises tend to have an easier time getting a startup business loan. If you’re considering a startup loan as a franchisee, check the SBA franchise registry to make sure the business is on the list of companies that get easier and faster approvals.

There are other business financing options that small business owners may come across, but the majority of business loans are not open to startup companies unless they have:

1. 2 years in business
2. $100,000 annual revenue
3. 650 personal credit score (or 80 D&B score)

Small Business Administration Loans

The Small Business Administration is a government agency that helps small business owners succeed. They offer four main services:

1. Business Guides: They have good overviews of how to plan, start, run, and grow businesses.
2. Funding Programs: We’ll talk about these below.
3. Federal Contracting Assistance: Federal contracting has a range of requirements that the SBA can help you meet.
4. Local Assistance Centers: Every state is different so going to a Small Business Administration office can be beneficial for state-specific guidance.

Let’s look at the business loan options available from the SBA.

SBA Loans Startup Business

A new business can apply for an SBA loan or business line of credit. There are three categories of SBA loans:

1. 7(a) Business Loan
2. 504 Business Loan
3. Microloans

Let’s look at each.

7(a) Business Loan

7(a) Loans are the SBA’s most common loan program if you are buying real estate because they back loans of up to $5 million that can be used for:

• Short- and long-term working capital 
• Refinance current business debt 
• Purchase furniture, fixtures, and supplies 
• Real estate

Businesses have to meet the following qualifications to get small business loan:

[su_note note_color="#dbeafc"]

• Must be profitable company
• Must be operating and based in the U.S.
• Owner must be invested in the company
• Exhausted all other resources
• Demonstrate the need for the loan 
• No delinquencies to the U.S. Government

[/su_note]

If you are buying an existing business or franchise, you may need to ask the existing business owner for the following:

• Current balance sheet 
• Profit and loss statement
• Three years of tax returns
• Proposed bill of sale with full terms
• Asking price 
• Schedule of inventory
• Machinery and equipment
• Furniture and fixtures
• Licensing agreements from franchise, Jobber, and other companies
• Proof of equity 
• Additional SBA forms based on the scenario

Check out the SBA for more 7(a) information.

504 Business Loan

This SBA loan is for businesses to upgrade property through a Small Business Development Center as long as they have less than:

• $15.5 million in total 504 loans
• $15 million tangible net worth
• $5.5 million in current needs
• $5 million of net income based on the last two years tax returns

A 504 loan is meant to create both business and job growth through the construction or upgrading of:

• New buildings
• Existing buildings or land 
• Long-term equipment and machinery 
• Streets
• Parking lots 
• Utilities 
• Landscaping

You cannot use a 504 loan to increase working capital or inventory, restructure debt, or speculate on real estate. Learn more about 504 loans.

Microloans

These are the smallest type of startup loan you can get from the Small Business Administration. They are up to $50,000 and can be used for anything except buying real estate or restructuring debt. A microloan lasts for no more than six years and will normally have interest rates of 8% to 13%. Find a microloan lender.

How to Get Loans for Startup Business

Applying for startup business loans is simple. Just follow these seven steps:

1. Build your credit score. 
2. Choose a loan type.
3. Choose a lender.
4. Prepare your documents.
5. Update your business plan.
6. Apply for a startup business loan.
7. Build for growth.

Step 1. Build your credit score

As mentioned before, you’ll want a 650+ personal credit score or an 80 business credit score from D&B. If you don't already have the necessary business and personal credit score, consider these options:

• Arco Fleet Card
• Divvy
• Quill

You can also use NAV to find ways to build your business credit score.

Step 2. Choose a loan type

You’ll need to sort through and choose the type of startup loan you want to apply for if you go through a financial institution, but lenders like National Business Capital (NBC) will discuss the best startup loan options for you. NBC will help you get better startup financing because they work with 75 business lenders. That means you get the best business startup loans for your scenario. You can choose from:

• Term Loans
• Equipment Loans
• Lines of Credit
• Asset-Based Loans
• Invoice Financing
• Merchant Cash Advances (MCAs)
• SBA Loans
• Industry Specific Financing

Find out why more people go to online lenders for startup financing than traditional financial institutions.

Step 3. Choose a lender

In this step, you’ll look for a financial institution that will help with your startup financing. You can get a startup loan from:

• Local banks and credit unions
• Major banks
• Finance companies
• Online lenders

Let’s look at each of these.

Local Bank or Credit Union

If you have a bank account with a local lender like a credit union, they are more likely to approve you than larger banks or online lenders. Unfortunately, fewer small business owners apply for bank loans from smaller banks according to the FED Small Business Survey.

Major Banks

According to the Federal Reserve Small Business Survey, most business owners go to a traditional lender like Wells Fargo, Chase, or Bank of America when they apply for business loans, but they do not offer great odds of approval. You’re better off going to almost anyone else. The table below shows what percentage of business owners apply at each location and what the odds of approval are. Finance companies and small banks are the most under-utilized.

Finance Companies

These lenders focus on activities like equipment financing. They tend to be alternatives to a traditional business loan, but they have the best approval odds because the monthly payments are secured by something other than your word and credit history. 

If you need credit, business lines from vendors can be a phenomenal way to start a business. The loan amount may not be as big, but there are benefits to running a lean startup. These may be online or in-store. Synchrony (formerly GE Finance) is a major player in this market, but you can also find plenty of other lenders on National Business Credit.

Online Lenders

Online lending tends to be more friendly to small business startup loans for bad credit. The loan amount might be lower than other business loans and the interest rate higher, but when you want funding for a business start up it makes sense to consider them. One of the nice things about National Business Credit is they bring together private lenders for business startup loans. This helps you get better credit offers and reduces the number of hits on your credit.

Step 4. Prepare your documents

Make sure you have all the documents you need to apply for a startup loan. If you don’t, they can hold up the processing time,  which for many lenders can be three to nine months. Make sure to ask about the business loan application process before you get started. That way you are fully prepared with everything you need to apply for startup capital. We discussed what you’ll need in earlier sections of the blog.

Step 5. Update your business plan

If you haven’t already, you’ll want to update your business plan with the most up-to-date information. Better information helps you be more likely to receive a line of credit or business loan. Pay special attention to the financials and the explanations, especially on how you’ll use the business line of credit.

Step 6. Apply for a startup business loan

Once you have everything ready, it’s time to apply for your small business loans. Startup companies will often be denied credit from traditional financing options unless they have a good personal credit score, business credit, and offer a personal guarantee. Online lenders tend to be more generous as long as you have a 650 credit score and are using the loan amount for something that can secure the business.

What to consider before accepting startup loans for business

Before you accept startup loans for new business ventures, you’ll want to consider:

• Interest rates
• Lump sum loans vs business lines of credit
• Monthly payments
• Impact on working capital and cash flow
• Duration of startup loan

Let’s look at how each of these impact business success.

Payment Terms

Before you accept startup business loans with no revenue, you’ll need a plan to pay them back. The payments will be a combination of interest payment and principal. Depending on the loan, you might have:

• Daily Payments: This arrangement is common with merchant cash advances.
• Weekly Payments: This is also common with merchant cash advances and invoice financing.
• Monthly Payments: As the most common type of payment arrangement, these are used by traditional bank loans, business credit cards, SBA loans, and business lines of credit.
• Paid Upon Triggering Event: Invoice financing often reroutes the invoice payments to the lender and then they pay you. When this occurs, the triggering event is the receipt of the invoice payment.

Make sure you can afford the payments otherwise you may default on the loan or lose your business. This is especially important if you have a period of time between when you accept the startup loan and when you receive revenue. If you keep part of the loan aside to pay the loan payments, you can protect against this risk.

Interest Rates

Your interest rates are effectively a business expense. Every time you pay interest, you have less money to reinvest in your business. We created a table of common startup loans to show you how much you’ll be spending on interest for different types of loans using the SBA data and calculator.net.

Interest for Different Loan
Type of Loan	Total Interest	Total Repaid	Monthly Payment	Interest per Year
6 Year $50K Microloan 8%	$13,119.67	$63,119.67	$876.66	$2,186.61
6 Year $50K Microloan 10%	$16,693.02	$66,693.02	$926.29	$2,782.17
6 Year $50K Microloan 13%	$22,266.78	$72,266.78	$1,003.71	$3,711.13
25 Year $250K Fixed Rate 9.52%	$406,315.50	$656,315.50	$2,187.72	$16,252.62
10 Year $250K Fixed Rate 10.52%	$155,141.03	$405,141.03	$3,376.18	$15,514.10

High rates are one of the main reasons that successful small business owners discourage taking out small startup business loans with bad credit. 

Next, we’ll discuss why business lines of credit are some of the best small business loans you can get.

Term Loans vs Business Lines of Credit

Always choose a business line of credit over a term loan if you are offered it. Lines of credit are some of the best loans for startup business operations. Term loans pay you a lump sum upfront and you pay interest on the full amount. A line of credit is similar to how a business credit card works; it charges you interest on the amount of credit you use. 

Let’s look at how that can impact your payment using the 25-year loan from the example above. Pretend you only need $25K in the first month. Instead of paying $2,187.72, you’d pay 9.52% interest on $25,000 making it where your payment is only $218.77. You just saved $1,968.95.

As you pay the line of credit off, your available credit goes back up. This doesn’t happen with a traditional loan.

Impact on Working Capital and Cash Flow

A startup loan will impact your working capital and cash flow. Let’s look at a few definitions:

Working Capital = Current Assets (convert to cash in less than a year) minus Current Liabilities (must be paid within a year)

Cash Flow = Money In minus Money Out

Here’s how a loan impacts your capital and cash flow:

1. The loan will initially provide working capital and cash flow to help with startup costs.
2. Payments on the loan will reduce working capital and cash flow.
3. Depending on how well you convert the investments into revenue, the working capital and cash flow may increase or decrease as you earn revenue and make the loan payments.

Duration of Startup Loan

The duration of the loan will impact the payments and interest rates. Assuming the loan amount stays the same, you’ll see the following impacts on other aspects of the loans for startup business operations.

Step 7. Build for growth

Once you get approved for a startup loan, it’s time to put your business in hyperdrive. Use the loan for the purposes you stated in the startup loan application. If you received an SBA loan, make sure you aren’t using it for items that are specifically excluded from your terms. Lee told us:

[su_quote]I spent way too much on the build-out (remodeling the business.) If I had it to do over again, I would have reduced the amount spent on bathrooms and invested in more inventory.[/su_quote]

Next, let's look at some alternatives to loans for startup businesses. 

Alternatives to New Business Startup Loans

Creativity offers a ton of ways to start a business without applying for a startup loan. Consider some of these alternatives to a startup business loan:

• Credit Cards
• Small Business Grants
• Friends and Family
• Crowdfunding
• Equity

We’ll look at each of these below to help you with more ideas to get business funding.

Business Credit Cards

You can use business credit cards instead of a startup business loan. It’s easier to qualify for these forms of credit, but they most likely won’t cover more expensive costs like buying equipment or property. In addition, business credit cards tend to have higher interest rates than startup business loans. That means lower profits.

Small Business Grants

Startup grants are by far the best way to get money for your small business if you can get them. The Small Business Administration has grants for:

• States to Help with Exporting: Learn more about the SBA exporting grants. Apply with your state to get exporting assistance.
• Research and Development: Grants for developing scientific or military applications are available from the Small Business Innovation Research (SBIR) and Small Business technology Transfer programs.
• Management and Technical Assistance: If you want to provide managerial or technical guidance to small businesses, there are grants for you too. It’s called the 7(j) program.

Check out other SBA grants.

Friends and Family

Friends and family can help you become a small business owner. They can either give you money or offer you a startup business loan. You’ll need to find a provider that offers loan servicing for individuals, but it can be done.

I financed my home through a friends and family loan that was managed by WestStar to get a lower interest rate than was available on the open market. You may want to ask if they service business loans that way too.

Crowdfunding

Business owners can also get startup funds through crowdfunding. When you use this method to start a new business, you may be committing to deliver a product in exchange for help covering business expenses. Learn how Pooch Selfie approached crowdfunding below:

[su_youtube url="https://youtu.be/TFvmb2E3-Kw"]

Equity

Selling equity requires incorporation, but business owners can raise far more money through selling equity. This method of fundraising involves selling stock, which means the business has multiple small business owners and each is entitled to part ownership. You’ll want to hire a business lawyer to help you draft the incorporation documents if you plan on taking this approach.

Build Your Business 

It’s not always easy to get loans for startup business operations, but if you can acquire one, it can help you accelerate your business growth. Just make sure you have a solid plan for how you’ll use it or you may find yourself in a worse spot than when you started.

What kind of business loans have you used?

Equipment Financing
Asset-Based Lending
SBA Microloans
Personal Loans
Credit Cards
Other: Specify