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?
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.
For me, the consistent point of failure in running my own business is never being able to wear all of the hats. I simply can’t be the salesman, the legal assistant, the project manager, the engineer, the art director, the visual designer, the developer, the quality assurance tester, the accountant, and ultimately the deadbeat bill collector. What’s worse is trying to handle more than one client simultaneously! I’ve let four freelance businesses go by the wayside because I can’t maintain all of these roles. Somebody with more capital might hire people to pick up some of the responsibility, but how can an entrepreneur start a business solo?
There is no simple answer to this other than WORK MORE. Being the boss means you wear all the hats until you can afford to hire people. It means you say no to parties because you are busy. It means you sacrifice A LOT so that in 3,4 or 5 years you can be the guy leaving early and taking vacations. Most people that start businesses, myself included, can not see long term because they are just trying to make it to next month. Work hard and sacrifice and sooner than you think you can afford people to take some of that load off. At some point you have to jump off the cliff and quit the job that supports you so that you can spend more time on it. SCARY time but remember, you can always get another job. That is way easier than spending your entire life wondering “What if”.
How do you manage marketing, finding clients, managing contacts, handling payments, and all the other business stuff, and still have time and energy to do the work that is the core of your business?
Its really quite simple. I work constantly. When I started my Fireworks company I worked a full time job for 50 hours a week. That left me 118 hours. Take out 56 a week for sleeping, 10 more for travel and getting ready and I still had 52 hours a week of ME time. I spent my days off working on getting my new business up and running. I spent my lunch hours going to meetings I had set up. I would get home from work at 8:30-9:00 and spend a couple hours with the family and then when they went to bed i would work until 2 AM.
People assume I do not go out or visit because I do not want to. Nonsense, I am busy working.
Stop watching TV. Stop going out. Stop sitting around and use your time well.
If it were easy everyone would do it.
I quit my paycheck job in May of this year to fallow my dream for my own business. I have a great support system of family and friends. I have gotten off to a slow but I think good start. I am wondering about registering my business and tax id numbers a such.
I have the skill and the supplies to make my product but money is in short supply and I am pretty lost when it comes to legal things.
Registering your business and getting a tax ID number is a very simple task that can be done online at the Minnesota Sec of state website.
That being said I would always talk to your accountant before doing that and also consider if it is worth the effort and cost right now. Once you register you have to file taxes for that business and pay someone to do those taxes.
Work on building it up. Get it going and then get your paperwork done.
So, Mark, do you have some kind of itemized list for streamlined success in starting a new business? Or maybe a checklist for improving a business, you know, subtle things we didn’t even know we needed to do?
You are the expert… dish!
That is exactly what I hope to accomplish here. It will take time as I will be putting things up 3-4 times a week, but I will be doing exactly that. Then I will change what I said to something else because if I have learned anything in 9 years it is that I am always learning how to do things better.
What can a young person do to make themselves viable in any job market? (Don’t care about recession bullshit.) Secondly– what can they do to make themselves indispensable to a business? (That is, what skill is most sought after in a business?)
Young people are a hard sell to any business owner because you have no track record. Also the younger people are the less chance they take work seriously. Being persistant seems to work with me. I admire someone who just does not take no for an answer.
You make yourself indispensable to a business by making it money. The people I love the most are the ones that know their job, DO their job, and I can just check in from time to time to make sure the course is correct. People that need to be told what they have to do, people that give you 4 hours of work in an 8 hour work day, people that bring their personal bullshit to the office, and all of that have a short shelf life with me. Also I want people that see my vision. I DESPISE paycheck workers. A paycheck worker is someone that does not care at all about the place they work. It is just how they get money. I can not even understand how someone can do that. That said the boss creates a lot of paycheck workers by not involving them in the vision of the company. The boss forces them to have no passion for anything at work.
So to sum up, show up, work hard, bring passion to the tble, and make me money and you will never need a resume’ again.