Recently I attended a meeting during which 10 business hopefuls gave presentations, each hoping to be the recipients of a $10,000 business start-up award. Unfortunately only one person was able to win although all the presenters, had, in my opinion, great innovations for new businesses.
After the meeting I visited with three of the “non-winners”; I asked what they were going to do. I was surprised to hear three identical answers; “I don’t have funds to go on.”
Unless a new business idea requires substantial up front capital, for example, a restaurant or a furniture manufacturing plant, there may not be a need for outside capital. We are living in a service economy and all of the businesses that made presentations were service based businesses. Sometimes the thought that a dream can be funded brings out a business idea that may have been dormant for a long time. The wrong action is to put the dream back on the shelf; the right action is to develop a full business plan and look at self-funding options.
A legitimate option is starting the business on a part time basis, doing this has several advantages:
- If done correctly, a strategic focus plan will be developed not as a full time business but as a part time start-up.
- Next a family life plan is incorporated into the business plan to cement the family support for a new business venture.
- This new business will be able to test the target market without the risk of having everything in a “make or break” new business venture.
- Innovative financial solutions will spring up as the business plan is implemented. I have found that in a well-planned part time business start-up, the financial record keeping is much better resulting in a bigger bottom line.
- Perhaps the most important is the ability to see how you feel about having your own business and learning all the challenges that go along with it.
Over the past 25 years I have been privileged to work with many part-time, startup businesses. In almost all cases, financing was not a factor as to whether the business succeeded. If the idea is worthwhile and the heart and mind of the owner is dedicated to success, then it will become a reality.
We must not sit down and wait for miracles. Up, and be going. John Eliot, Seventeenth century
Nick J. Petra CFP