Starting a company can be expensive, but there are ways to get started. Many companies with whom I deal have startup costs that are almost as expensive as their operational costs. People costs can be very expensive, but people can be your best assets. Wise hiring helps the people who help you operate your business be your best ambassadors to the community to help you establisher your business and grow.
If you don’t already watch Shark Tank, go on the web and get caught up on past episodes. I have presented to small groups and I have presented to some of the major investment companies in New York City (West 50s and Wall Street). The amounts are different, the levels of involvement are different, but the basic ideas that concern investors are very similar to what you see on Shark Tank. It is even better if you can grow your business without the need for investors (and there are many kinds of investors).
Whether you face a shark or an angel investor, there are many similar issues that you should address in your business plan (and you SHOULD have or create a business plan – another area where SBDC can help):
• Do you know your market (and competition)?
• Why is your product going to reach that market?
• Have you properly valued your company at the time of the presentation?
• Have you paid yourself? (Many people don’t – this is an unstated liability)?
• Are you invested in your business (level of personal or financial commitment)?
• Can your product be sold to the market that you have targeted?
• What is your potential for growth?
• For investors: What is your “exit strategy”?
If you intend to stay in a long term business, you r “exit” may not be a “liquidity event” (new funding round, IPO, Merger and/or Acquisition, etc.) but a funding milestone. When you get from “seed stage” to the next stage, what will you need to do to increase business? Will you need to add property, equipment or people and how will you make that happen?