Core Business Solutions Advice

In my last 2 blogs in this series, I reviewed two of the seven areas that I think contribute greatly to business failure. Those were 1-A Lack of Planning(No business plan) and 2- Starting a Business for the Wrong Reasons.

Another common fatal mistake for many failed businesses is having insufficient operating funds. Business owners underestimate how much money is needed and they are forced to close before they even have had a fair chance to succeed. They also may have an unrealistic expectation of incoming revenues from sales which is typically as a result of incomplete research or due diligence.
It is imperative to ascertain how much money your business will require; not only the costs of starting, but the costs of staying in business. It is important to take into consideration that many businesses take a year or two to get going. This means you will need enough funds to cover all costs until sales can eventually pay for these costs. This same principle also applies when you plan to expand your product line or start new divisions of your company. Take the time and plan and research all the issues to remove any surprises.

But how does a business owner, especially a new business owner, discover what capital it will take to get your business off the ground? A good way is to talk with a CPA and review all the costs with them. CPA's are invaluable as they probably have clients that had the same issues when they started their business. Start with a P&L statement and be brutally honest with yourself. What will it cost you for marketing, monthly office expenses and the list goes on. Review every item and set some realistic figures. Talk with others who have started new businesses or ask business advisors or consultants or even some bankers for their input.

If you have actually completed a written business plan, you should already have potential budgets and forecasts figured out, thus part of the answer goes back to installment #1 {see topic #4 Financial} in this series of this blog-Planning! I see many new businesses try to build a business with too little funds as result of 'pie in the sky' thinking. Set reasonable expectations and assume that it will take at least 1 year before you'll begin to see any black ink.

Investigate every source you have to fund your business properly. Do it right the first time and avoid the heartache of seeing all your hard efforts just be for nothing. Secure the proper funding and if you have a real passion for your business, you chances for success improve greatly.

In about 2 weeks, I'll take up the subject of: "Poor Management" This is another of the top 7 major reason businesses fail and many see it as even the most common reason, so I'll explore it next time.

I sincerely hope this series is helping you. Until next time-

All The Best,

Walt Morey
Core Business Solutions www.corebizsolution.com