Many start-up companies make rookie mistakes that can either shut their business down or haunt them for years to come. To stop this from happening, consider the 5 mistakes many new companies make. Dodge these, and sail on towards success.
A Lack of Materials
If you want to fundraise for your new company, then you are going to have to show people that you know what you are talking about. No person is just going to give you money. Rather, they want to make sure that their money is being invested properly. That is why having an abundance of materials relating to your company can help. Know what people may ask to see, and provide the materials. From graphs, to tables, spreadsheets, to the basic numbers, having this information on hand is crucial to building the confidence others will need to invest.
Ok, so people are giving you money. What does this money do? If your answer is “Make the company possible,” then good luck raising any more money. Our existence is based on the construction and continuation of narratives. Our lives are narratives that we construct, and as such our business and financing must also be a narrative. That being said, know exactly what the money is going into, and how this makes your goals possible. Speak of your struggling business, and the importance of this financing. Create a story that you know other people will want to be a part of.
Simply put, accounting is crucial to your business success. Know the basics like withdrawals, deposits, assets, and liabilities. Know the kinds of forms you will need to fill out as a new business and the kinds of things you will need for legal reasons. Any failure with this information could stop your business well before it takes off.
Underestimating Your Expenses
In a desire to be optimistic and to see our business succeed, we often underestimate what our total expenses will be. We put a conservative estimate as low, instead of above. Reasonably plan for the worst.
Overestimating Your Potential Success
Be reasonable. Create reasonable goals. When people who are thinking of financing in your company ask about your future, give a goal that is actually possible, and not theoretically popular. There is a reason why Facebook is unique, and your company will not be as meteoric unless you have an ace up your sleeve the size of a revolution to how we live.
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