New business owners often assume they can grow their company by generating sales alone. In reality, there are a lot more components that help startups become a successful organization, including the right operating capital, sustainable profit model and understanding of how to navigate business growth.
The Challenge Defined:
Are you thinking of beginning your company without investment money? That’s a challenging way to start any enterprise, other than the most basic life-style business. Be prepared for months or years of red ink and not adequately paying yourself until consistent sales start coming in the door.
As you explore sources of outside investment capital, you’ll need a special kind of business plan – one that’s much different than an operational business plan (that keeps you on track working inside the business.) The stakes are high, so utilize an expert to guide you through this exercise. You may just have one chance to get it right.
Don’t assume investment capital only comes from banks, which are the toughest sell of all and are exceptionally risk averse. Educate yourself on the investment capital process and sources. Check out free workshops and websites that can outline strategies for acquiring these resources. Consider looking to friends and family who might be willing to lend you startup money. Be sure to spell out a payback plan.
Regardless of how you obtain your startup money, it’s critical that you know in advance (and spell out in your business plan) how you’ll optimize those resources. Compile an annual and multiyear budget to support this planning. Running a business with no spending plan is a sure-fire way to burn through your capital before you see meaningful results.
- Have you identified your capital needs?
- How much faster could you grow if you had outside capital to kickstart your company?
- Have you identified potential investment sources?
Why This Challenge Must Be Resolved:
Simply driving a lot of revenue into a business is not a plan. Companies with solid sales fail all the time. If you don’t have early investment capital to work with, you could be treading water for a very long time.
Need help with navigating business growth or leadership coaching? Contact Mission Critical Teams.