Start up finance for small business

[Hencare]

Hi all,

I just want to know where to go to apply for start up finance. I have a great business idea, not available in Australia but I need financial support to start the business.

Any suggestions where to go, except for the banks? A small business corporation of some sorts?

Appreciate all feedback

Carelene

[BizDr]

As a venture captial coach I recommend a great business plan. do you have one organised?

Dom

[LeelaCosgrove]

What kind of business is it?

In 90% of cases I recommend clients bootstrap - but that's not always possible if you need a retail premises or production machinery ...

[Cage]

What does bootstrap mean?

[Hencare]

Thank you for replying.

It is a kitchen product (tool) that I want to have manufactured and that is not available in Australia.

It will be possilbe to run this as a "one man band" as I will do my marketing myself. and all I need to do is to have the product made and have enough stock to supply my customers. I have previous experience of my own business in South Africa, although on a small scale. I am confident that I will be able to the same with this venture of mine.

I'm thinking in the region of +/- $25 000, I already have a quote for the manufacturing of the proto type and then the final product.

On the Business plan, I still have to do that, but I'm working on that, time is not on my side at this stage, as I still working 4 days a week with little time left over to finalise what I need to finalise. Any idea what the costs will be to have a business plan drawn up for me?

What do you mean by "bootstrap". I will not need any premises as I can do this from home.

Hope I gave enough information to enable you to reply to my thread.

Thanks a mil for the replies.

Carelene

[LeelaCosgrove]

Bootstrap = funding your startup totally yourself - taken from "to pull yourself up by your bootstraps".

Here's my feeling:

As an entrepreneur, in order to be successful, you need to get REALLY good at making money. That's what entrepreneurs do ... they don't really provide a product or service ... they understand how to make money - and they can then apply those same principles to anything.

So, why not practice those skills from day one?

I know a guy who started a printing company - gave himself a 3 month lead in time - and by the day he started he had sold enough that he could fund the company and had enough work for the first 6 months.

The problem with investors is that you give up equity in your business. That may seem like a good idea now. But it won't down the track.

The problem with getting loans is that they're a once-off source of money. What I love most about the journey I've been on for the last four years, about the money I've spent on my education - is that I can make money anytime, anywhere. As one of my Idols, Gary Vaynerchuck says:

"Real entrepreneurs are as afraid of going to $0 as they are of going on vacation."

The average millionaire has been bankrupt or close to, 3.2 times. Look at Donald Trump (not directly, I'm pretty sure that will send you blind ... )

The work thing is a serious issue.

Have you read Malcolm Gladwell's book "Outliers"? In it, he looks at what makes successful people successful - and one of his major findings is that people who are successful have racked up in excess of 10,000 hours doing what they do.

At 50 hours a week on your business that's around 3.5 years (which is why so many people break through at the 3-4 year mark!).

At 15 hours a week on your business - it's 13 years.

Success is easy - it just depends on the time you're willing to put into it and how quickly you want to achieve it.

And a NOTE on the above ... that's 10,000 hours on ONE THING. You can't do 1,000 hours of ice skating, 8,000 hours of football and 1,000 hours of running and become a champion javelin thrower.

Same with business - it's 10,000 hours on the ONE THING.

Anyway, on Bootstrapping ...

Stop looking outside for the answer.

Start looking inside.

HOW can you make $25,000?

Can you presell product?

Can you get the manufacturer to agree to manufacture on demand? (Given the state of the economy hasn't been great, this MIGHT be an option)

The marketing is the first thing you ought to be doing ... even before looking at money ...

When I work with my clients on creating products, I ALWAYS tell them to SELL before they CREATE ...

Otherwise how do you know if anyone is going to buy it?

Then you're stuck with $25k worth of stock you can't move ... why would you want to do that to yourself?!?!!

Give special gifts for buying early - be totally upfront with clients that right now you're testing and seeing what people want and what that means is that they have input into product creation ... maybe make them "Foundation Members" - put together a special club for the people who invested in you before you got big and send them special gifts ... newsletters ... etc.

What else could you do?

[Cage]

I know this isn't my thread but that is exciting, thanks Leela Cosgrove.

[BizDr]

Entrepreneurs are also great at finding a problem and providing a solution.

When raising funds, if you estimate that you need 25K, I would then double it and add half more. So you guess you need 25K, but in reality, you need around 60K.

Many of my clients have been surprised that what they thought as enough was far from it.

Business plans are essential on getting the right type of direction.

Questions I would ask is:

What is your exit strategy?
Is there a demand for your product?
How are you going to protect your unique product from competitors?
What happens if your suppliers mess you around?

I can go on........the point is that it can be costly if planning is not done properly.

As leelee said, you can bootstrap, however, that may not be the best option for you. How do you know? The business plan.

For raising capital, I help do business plans for my clients. If you want help, just give me a PM and I will provide the details.

Hope it is some food for thought

Regards
Dominic