There’s a financing model for every entrepreneur out there and depending on the type of business you have, there’s an optimal way to fund it. If you Funding for Small Business, then running it out of your house using your own savings, credit card loans, and eventually your own revenues may be enough to keep it going. If you have bigger ideas and more ambitious aspirations, then you may want to consider other ways of injecting fuel into your business.

Plan, plan, plan! That’s my suggestion to anyone even considering financing a small business with borrowed money. It is absolutely tru that your well made business plan will most likely be thrown back in your face no matter how slavishly you adhere to it, still that is no excuse not to make the best effort when composing one. At worst it will be a map for investors ho you piece by piece but at best it will allow you to see aspects of your business you might not have considered while rehearsing your acceptance speech for ‘entrepreneur of the year’ every night before bed time.

Who knows? Maybe while doing your detailed business plan you will discover ways (like those mentioned by Stephan above) how to start your business without borrowing at all.

Where can I go to find that kind of data?

Thanks

It’s so sad to watch so many businesses fail because of money that was loaned against an initial business plan that tuned out to be over optimistic (as most are in my experience. Far more effort should go into research, traffic, conversion and finally product.

Ian.

Really enjoyed reading the tips. Keep up the good work.

Who decided to allow the business to be so dependent on one client? Who failed to acquire additional clients in order to minimise the risk associated with having all your eggs in one debtor basket?

I have had many busineses, and have also had failures together with successes. The truth of the matter was that failures created much self-doubt, until such time as I had accepted that it was a strategic error and failure on my part as the CEO. Once I took ownership I got rid of the victim mentality and could proceed with another notch in my experience belt.

I believe all failures are due to entrepreneurial failure, not a lack of finance. If you truly have insufficient finance, should you even begin to start trading?

It’s not true for all businesses but generally I hate it when someone comes to me and says that they expect to lose money money for the first couple of years of trading.

As revenue forecasts are almost always too optimistic in plans it allows excuses for poor performance and no cost control.