Mark Lazarchic

Question

Question:
Is raising investment for business all about the business plan and numbers? How do you value a business that has not begun and in some sense is hypothetical…ie: how did you know how many people would buy sparklers or how many people would visit the lights? Did you even need external investment on either of those? If someone is investing , how do you work out the value of the business they get on something that is really mathematical guesswork in the beginning?

Debs

 

Debs,

Money is always the monster. A lot of this conversation depends on the amounts you are trying to raise. If you have a business idea that would require 5 million to get up and running and have an operations budget for 2 years then you really do have to have your shit together with plans, forecasts, and most likely a working product with some revenue to show it has promise. You also most likely would be talking to strangers.

But lets say you are looking for less. I started my Fireworks business with a $20,000 loan from a friend. I agreed to pay him back $30,000 after the fact. INSANE payback was the only way I could get anyone to fund what I wanted to do. No bank is going to fund a start up.
I try to do most of my own funding but still to this day have investors who loan me money to get fireworks launched every year.

The most important thing in getting someone to give you money, believe it or not, is you. Investors give money to people they believe in. Ideas come and go but drive and motivation are very hard to find.
Have a plan, but make sure it is flexible to change, and talk with people you know that are wiling to invest. Friends and family sounds cliche but it is how almost every single company got started.

 

Similar Posts: