Please read my post about Cost of business and subsequent post about Capital and Expense Projection, there is a minimum outlay of $2 million! There is a big gap to be filled and the question is, how do you bridge this gap? Let us go back to basics of business to find the answer.
Basic Business Requirements
You must have :
- a feasible and marketable idea, product or service.
- knowledge (or some one knowledgeable) of the product.
- access to working Capital.
- an operating, marketing, business and financial plan.
- Economic and emotional ability to withstand ups and downs of the business.
These requirements are valid whether you are starting a business, buying an independent business or a franchised business. You have to set realistic goals. Generally when it is your idea, you tend to be biased towards that idea and ignore certain critical things like Capital. Make sure you get your idea evaluated from your trusted source and not ignore things that are important. Do ask yourself following questions:
1. What product / service your idea will provide?
2. What needs does this idea will fulfill?
3. Who will be your potential customers?
4. How will you reach these customers?
5. Why will they purchase this product or service from you?
6. Where will the Capital come from?
When you can convincingly answer each of these questions, you can move forward and take your second, third and fourth steps.
Bottomline: When you solve the jigsaw puzzle of your future business, Phase I funding is just a small piece of this puzzle.