Articles island - a directory of quality articles, free quality articles reprint for your web site and email newsletter.
Free Articles Reprint for Your Web Site, Email Newsletter, Blog, Ezine and RSS Feed.
Submit Your Articles to Our Article Directory for Massive Exposure.
Total Live Articles: 97963  Total Categories: 389



 
  Advanced Search
Articles island Expert Author - Linda C Dipman
I was born in Portsmouth, Virginia, but I have spent most of my life in Kansas. I am a business woman who has run my own upholstery business for over thirty years. I have three married children and six grandchildren. In my spare time, when i'm not entertaining my grandchildren, I like to travel, read, decorate, and of course I love to write. My passion...
Home » Business » Start-up » Money for Start Ups: How Much Money Do You Need For Your Business?

Money for Start Ups: How Much Money Do You Need For Your Business?

By: deepower
Total views: 12
Word Count: 483
Date:Jul 10th 2007
Article Rating: No Ratings Yet

As much as I can get! This would be the answer readily shouted out by most entrepreneurs. The fact is though, both over and underestimating the amount of money to start up a business can have serious negative consequences.

Underestimating what you need can cause problems ranging from having to go through the whole time consuming fund raising process again, to having to shut down the company because funds have run dry. Having to go back to the original investors and ask for more money often undermines the entrepreneur's credibility with the investors and can cause a significant dilution in the founder's ownership.

Obtaining more than enough capital may seem like a blessing at first, but it can breed a lax attitude toward expense control. "If you have it, spend it," is not an advisable motto for a new company. If the investment takes the form of equity, raising too much money means that the founder's share of the business was reduced more than was necessary--and this violates one of the maxims of entrepreneurship: hold on to those equity points!

Typical advice given to entrepreneurs is to do a cash flow projection, or cash budget, and then add 10%, 20% or even 50% to this amount, for "contingencies." These contingencies are all the things that can go wrong in a start-up venture, all the unfavorable events that can negatively affect results.

Contingency planning is a skill that does not come easily to all entrepreneurs--even those with a finance background. How do you get the cockeyed optimist (what you absolutely must be to even conceive of the idea of the starting a company), who expects the best, to plan for the worst?

To stimulate contingency planning, it helps to look at the reasons why entrepreneurs so consistently run out of money; among these are:

Not realizing how expensive it is to introduce a new product, especially consumer products, on a national basis.

Not realizing how long it takes to introduce a new product, or for the market to truly accept the product.

Delays in regulatory approval, municipal zoning, or patent approval.

Assuming that a small start-up company will get the same forbearance on payments and favorable terms that a large one will.

An entrepreneur with an early stage company must be prepared for one or more of these situations to occur. Contingency planning doesn't mean simply adding a percentage or dollar "cushion' to the amount of capital being sought from investor or lenders. It is a way of thinking--a recognition that the entrepreneurial road is always rocky. Envisioning what might go wrong does not equate to entrepreneurs losing faith in their product or their company; it means they accept these difficulties as steps on the path to prosperity.

About The Author-- Receive a free business plan format. Email businessplanformat@(nospam)capital-connection.com. remove the (nospam) from the address, or visit www.Capital-Connection.com. You will also receive a subscription to our newsletter at no charge.

Article Source: Articles island - Free article submission and free reprint articles


Most Viewed Start Up Articles




Most Viewed Start Up Articles:

What does it REALLY take to Make Money Online?
If you're thinking about starting an online business, you have to be careful. There are literally thousands of...

Starting a New Business Requires Planning in All Areas
Many entrepreneurs have failed in their new ventures, not because they didn't have a solid understanding of th...

Obtain Business Capital Using A Variety Of Commercial Finance Options
Commercial finance is one of the many options available to entrepreneurs seeking capital to start or grow an e...

Moms' Rules of Thumb for Starting a WAHM e-Business
5 practical rules of thumb for Work At Home Moms who want to succeed in e-business....

Details of the Best Home Internet Business
When you are searching for the best home internet business you are searching for something that is hard to fin...

Knowing The Various Costs Of Starting A New Business
Explains the costs and risks involved with starting up a new business....

Just Get Started on Your Online Career
Things will almost magicaly happen once you commit to you dreams and goals....

Turning Creative Ideas into Residual Income Programs
A little peace and quiet and a mental map can set you onto the road to a steady income for a long long time...

Internet Home Based Business Equipment Needed For Start Up
This article talks about the various types of equipment needed to start an internet home based business. It wi...

Great Profits in Buying Closeouts
Many people are quite apprehensive when we take out buying closeouts. Most of these apprehensions come from li...


Recent Start Up Articles




Recent Start Up Articles:

Top 10 tips for Entrepreneurs to Start & Stay in Business
Entrepreneurs face unique challenges today. Follow these top 10 tips to not only start your business, but stay...

Starting a Business – What is a Business Plan?
This article deals with key decisions involved with starting a business and the advantages of having you own b...

How To Start A Home Based Internet Business
Are searching to try and find out how to start a home based internet business yet really have no idea where to...

5 Myths About Setting Up Your Own Personal Domain And Website Busted
Discusses how easy it is for anybody to buy a domain name and a web site to be set up for it, contrary to popu...

Beyond This Point - Dragons Or Success?
Much of the earth's surface which back in the days of Columbus, Magellan and other great voyagers was thought ...

Just Get Started on Your Online Career
Things will almost magicaly happen once you commit to you dreams and goals....

Vending Candy Wholesale and The Bulk Vending Business!
Learn about the bulk vending business and how to get vending candy at wholesale prices today....

Some Preliminary Thoughts before Starting a Restaurant
With a big restaurant operation starting or your hand-me-down equipment has gone through its last duct tape pa...

Starting Child Day Care Businesses
Starting a new business can be difficult without the proper knowledge. A child daycare business is no differe...

Internet Home Based Business Equipment Needed For Start Up
This article talks about the various types of equipment needed to start an internet home based business. It wi...

Most Viewed Articles by deepower




Most Viewed Articles by deepower:

How to Stay Under the RIAA Radar When Downloading Free MP3 Music
Thanks to today's peer to peer technology, mp3 music lovers like you and I can get unlimited downloads of mp3 ...

Solutions for the National Football League Players: Say No to Thugs
"What the heck is going on out there?" the Great Man would say if he were here today commenting on the numerou...

How Do I Get a Business Loan? A Business Plan is the First Step
If you're looking for credit from a vendor or service provider, probably not. But, and it's a huge but, if yo...

Get a Book Published? The Road to Publication Might be Getting a Little Rougher
Is it getting easier or more difficult for an unpublished writer to get their first book commercially publishe...

How to Write a Book Proposal and Get Your Book Published
The agent said yes to the query letter! Finding out how to write a book proposal is your next step....

Cheap Wedding Cakes - Tips for Beautiful but Cheap Wedding Cakes
A multi-tiered wedding cake beautifully decorated is an important part of any bride's dream wedding, but the p...

How To Find a Literary Agent -- And Avoid Scams
New writers often fall victim to scams. Here are a few tips to avoid unscrupulous literary agents....

How to Improve Your Golf Game: 3 Tips
Golfers are bombarded with advertisements for the latest fabulous, amazing high-tech golf equipment, clubs wit...

Cheap Wedding Rings - How Diamonds Are Valued
Diamonds, Ice, Sparklies, A Girl's Best Friend: Whatever you call them how are they valued? The four C's -- C...

Money for Start Ups: How Much Money Do You Need For Your Business?
Determining how much money you need for your start up business can be critical....

You have permission to publish or reprint this article in your ezine, website, blog, forum, RSS feed or print publication, free of charge. As long as you keep this article with no changes(included Article Title, Article Body, Author Name, Article Source and keep all links in this article active)and you agree to our publisher terms of service. Below are ready HTML code for this article, you can copy and paste directly into your web page.

Money for Start Ups: How Much Money Do You Need For Your Business? -- HTML Version:


Money for Start Ups: How Much Money Do You Need For Your Business? -- Summary:

Money for Start Ups: How Much Money Do You Need For Your Business? -- Keywords:
1   2   3 Good!   4   5   6 Very Good!!   7   8   9   10 Excellent!!!  
Comments:
No Comment Posted.

Leave Comment: Please Login to leave a comment. Not a member yet? Sign Up now.