It’s All About the Benjamins

How are you paying for your startup business? It might surprise you to learn that a lack of capital dooms most businesses to failure before their doors even open. This is the painful point that shows up most often in the statistics,” says Michael Goodman, marketing consultant and top expert in the MarketingProfs discussion forum.

Don’t become a statistic. According to Goodman, the best way to avoid that fate is to have a clear grasp of your business’s financial prospects:

Understand the cost. Going into business entails an array of up-front costs, everything from equipment and inventory to marketing materials and professional services. Don’t forget the cost of furniture and fixtures.

Don’t be surprised by negative cash flow. Use a pro-forma P&L (profit and loss statement) to identify how much money you’ll need to fund ongoing operations and marketing until the business is profitable.

Consider equity investors. If you can’t fund the business yourself, find someone who can. It’s better to own a smaller percentage of a successful business than 100 percent of a failure.

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