Funding issues are really only a problem if you do not use “bootstrapping techniques” – so I’m not that comfortable talking about this issue, since I believe everyone should start their small business and start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer-, Professional-, Personal business on a shoestring.
Anyway here are the small business health check questions you need to ask yourself:
- What do I need the money for? Can’t you find a customer how will buy the product or service, before you even have it? It can be done you know!
- Do I have enough securities for a bank loan or overdraft? I always like the analogy of a bank will give you an umbrella (money) and when it rains (problems) they need the umbrella themselves – what than is the umbrella good for!
- Should I be looking for an external investor? You could find external investors who will tell you how to run your business, but know even less about your small business than you do?
- Do I have the detailed business plan needed to find investors? You will need a detailed business plan – which frankly may not be worth the paper it’s written on – which will be used against you when things don’t work out.
- Do I have the time to wait until a decision is made? You could be looking a 12 – 18 month before you have funding, do you have that time? Why not deal with customers today and get started on a shoestring.
- What if they say NO? This is my favorite one – are you happy to give up on your business idea if everyone things is bad or worse (?)…. if you are don’t start a business, because you are not ready and whatever you do do not borrow any money from anyone.
If you read this and think this is all b*** s*** – and you may be right, of course – let me know why you think you need to borrow money? Maybe we could come up with an idea that would allow you to start your small business, without having to borrow money and loosing some of the control in your small business.
You can see other reasons for small business and personal business, like contractors, freelancer, self-employed, sole-trader and virtual assistants failures in my Health Check Category, if you can add to this list please do so, I would welcome your comments.