The First Phase: Making a Personal Commitment

Most new businesses fail within two years. There are many reasons for this, but one fact is known about successful businesses. In order for a business to success it must be properly planned from the beginning. Many decisions need to be made before the announcement ‘Open for Business” is broadcast.

Successful businesses almost always start with a comprehensive business plan with special attention to accounting and finance. To be successful, entrepreneurs usually need the help of professionals to complete the large amount of paperwork and planning involved. An investment brochure, professionally made and distributed, is often the only difference between a well-funded project and one that fails, simply because sufficient operating capital was not available. The day of going into your local community bank and getting a loan from them based on ‘a good idea’ are long gone. If an entrepreneur needs to go somewhere other than a bank, good paperwork becomes even more important! Venture capital is money that is risked. Those who risk money to entrepreneurs want to know that every important consideration of a business has been made and documented properly.

Entrepreneurs must plan to have an adequate amount of money to fund their business. Start-ups usually require more cash than anticipated by even the most conservative expectations. A new business requires sufficient capital to endure unexpected hardships. Without sufficient funding to get the business off the ground, to persevere through business slumps, to carry receivables, and meet inventory and staffing needs, a business most certainly will fail.