1. Half-baked business plans
A good business plan should not only be realistic it should be specific. It should show how the plan will be implemented, highlight the market opportunity and separate what is an assumption and what is a fact. You don’t want to fall at the first hurdle when securing business funding.
2. Focusing too much on the idea and too little on the management
Having a great idea is one thing but ideas don’t fuel themselves. Making the dream a reality is as much about the mundane paperwork as it is negotiating the perfect deal or creating the ideal marketing campaign. Knowing who is responsible for what, where, when and how makes sure the ‘machine’ continues to run as the business shifts through the gears.
3. Not asking for enough money
‘Better to have too much than too little’ as the old adage goes. Being prudent and hedging your bets is one thing but be sure not to leave yourself short. Make sure you’ve carefully analyzed how much you need including contingencies and if you’re unsure seek expert advice. Nothing worse than getting what you want, only to find out its not what you need.
4. Having too many lenders or investors
This is certainly a case of quality over quantity. While it’s great to have many suitors they will not all be the same, offering the same terms. It’s better to have the right quality of funding rather than dilute the fundamentals of the business, for what could ultimately be short term gains.
5. Failing to get the proper legal agreements
As with most things in life ‘the devil is in the details’ and this is no different. The right legal agreement can free you to expand, grow and take the right risks while others can chain you down, becoming a weight on your mind and business. Be sure that the agreement isn’t just right in principle but the conditions and penalties fit your financial structure.
6. Poor cash flow management
So you’ve got the funding you were looking for, great! Now what? It’s important to allocate and track spending accurately, adjusting spending to meet changing demands and continuing to look for opportunities to maximize spending. Ultimately it’s about having the right person with qualified experience advising you on your the use of you new funding effectively, ensuring the proper cash flow management.
7. Poor personal credit
Poor personal credit can be a real stumbling block but often isn’t as fatal as expected. Be vigilant of all the lending and investment opportunities available to you and again seek expert advice where you need it.
8. Not understanding your financial situation
Sadly too many businesses fail to truly understand their financial situation which can lead to underestimating the funding they need. Underestimating the exponential increase in expenses as they grow the business or just over estimating future revenues are obvious hazards. It’s never easy to predict the future, which is why it’s so important to analyze the present as best as you can.
9. Under utilizing the management team
Having a strong team is a key component of any successful enterprise. Finding the best way to utilize the full capabilities of that team can make a huge difference. Identify the key skill sets of your management team as well as their weaknesses and potential for growth and if you find gaps that can’t be filled you can always recruit or outsource.
10. Lacking a clear go-to market strategy
Your go-to market strategy should be clear and precise, a plan you can follow, execute and track. Once you are ready to go you don’t want be distracted or uncertain, delays can cost you money and opportunities. Go to market with energy, focus and a purpose for your new funding and the chances of success greatly increase.
At Budget Mastermind we offer free initial consultations and work with our clients for all their financial needs from drafting business plans to sourcing funding and managing their accounts. If you have any questions at we encourage you to contact us HERE for a free, informal chat.
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