How Much Money Do You Need?
Don't Blow It
Be wary of common mistakes: - Don't neglect your homework. "[Start-up entrepreneurs] don't do their research--that's the most common error. They don't find out what it'll cost to run the business. They leap in without looking."--Kathleen Allen, professor, University of Southern California in Los Angeles
- Don't skimp on cash. "You don't often start out with the kind of sales volume you're hoping for, so you have a period when you're losing money. You have to scope out ahead of time how much money it's going to take to carry you through that valley." --Fred Thomas, former president of SCORE
- Don't overlook growth potential. "Most successful start-ups are surprised to find out it takes more than they're making to expand. If the business is in, say, retailing, they have to build larger inventories and may have more accounts receivable. Those things increase your need for working capital." --Thomas
- Don't woo the wrong bank. "[Start-ups usually don't] understand where a bank is coming from, misjudge it's objectives or go to the wrong one. Businesses might do well to get $200,000 the first year. Large banks don't want that kind of business." --Steve Bates, owner, Management Analysis Group in Seattle
Contact Source Management Analysis Group, (206) 624-4114, http://www.solutions4mgmt.com Content Continues Below
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