So how do you take your business from idea to reality?

Yesterday I received a text from a former colleague of mine named Carly that read " I want to open up my own business, can you help me out with a business plan?".  Now Carly is aware of my position as a Managing Partner / CIO at Start Fund Go (http://startfundgo.com) and that helping businesses find capital is what we do, so the request did not surprise me.  What DID surprise me was some of the assumptions she had made when trying to figure out exactly how much capital it would take to fund her business idea.  Now understand that Carly is a very smart individual with a strong background in finance, however, some of the ideas and perceptions that she had about borrowing money seem to be shared by the majority of entrepreneurs looking for startup capital.

"I can get by with a minimum number of employees and I will not draw a salary", the words appeared on my iphone.  I then had to pick up the phone and call her at the risk of getting carpal tunnel syndrome from the fury of texting I was about to unleash.  When she picked up, the first words out of my mouth were blunt and serious if not somewhat foreboding.  "Most new businesses fail in the first year due to undercapitalization" I explained, advising that mapping out a clear, concise and detailed business plan would tell her exactly how much money she needs to give her venture a chance at success.  I also mentioned that when borrowing money to start a business, both investors and bankers will want to see that she has carefully thought of everything including unexpected contingencies and has a plan to deal with them accordingly.

 

What's the bottom line?  Well, investors, being defined as any one that is willing to loan or invest money in a business do not want things sugar coated, nor do they want to see a business plan that depicts running an operation on a shoe-string budget.  Don't be afraid to state a realistic number when determining the cost of starting your business.  Once again, if done correctly, the financials of your business plan will dictate the required capital needed.  If your not experienced at business plan writing and not sure where to begin check out www.startfundgo.com for assistance.  You can always drop me a message at kevin@startfundgo.com . I would love to help.