Securing startup capital for your new business can be a tricky process. At this
point in time of getting your new business going, your business plans are essential
at this stage of setting up your business. In it you will already have scoped out
what your money needs are and how you plan to raise the startup capital, and you’ll
be using it to persuade potential investors and lenders of the benefits of funding
your new business.
Your financial calculations in
your business plans therefore need to be thorough
and accurate and presented with confidence. Everyone expects that they’ll be able
to stick to their business plans and only need to borrow the absolute minimum, but
more often than not something unexpected crops up to throw a wrench in the works.
It therefore makes good business sense to include a contingency element in the amount
of startup capital you request. It’s better to do that now and have the extra cash
as a safeguard than it is to have to return to your lender or investor not far down
the line to ask for more money.
If it wasn’t in your original business plans they are likely to be concerned about
your financial ability and your request may be rejected. Many people wonder how
much startup capital they should request. You want to keep costs to a minimum and
invest your money wisely in your new business, while still having the security of
a little extra for backup if required. What startup capital you borrow should give
you a realistic challenge for your new business but should not be too risky. And
back up your calculation with evidence in your business plans, since it has to be
credible.
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