Last week, I had the rare pleasure of a visit from my dear friend, Scott Childs. He is a graphic designer a la Clemson who moved to Texas some 3 years ago.
Each visit from Scott is followed by a few weeks of graphic design gifts through email. This is today’s:
Thanks buddy.
Recently, I came across this discussion on the #1 reason that new businesses fail: underfunding.
Perhaps this has to do with lack of confidence in a product; perhaps a failure to understanding of the word ‘investment.’ From my frequent coffee breaks with would-be entrepreneurs I’d say that neither is the bulk of the problem. In fact there is often quite a bit of assuredness about the product, and even a common risk-it-all mentality associated with new business ideas.
Instead, I think inexperience is to blame. When a business arises out of expertise in an industry, the entrepreneurial skills must often be gleaned on the fly. The planning phase fails because no one anticipates the cost of benefits for the first handful of employees, or the price-per-click they’ll need to pay to use Internet advertising to get in front of their target market.
The answer? Advisors. We push people towards small business incubators like NEXT and TechSTARS, but the available seed funding is usually not the main reason. The science of starting companies can be learned, and there’s nothing quite as valuable as a good mentor to explain how much capital is needed, and then help decide what (and what not) to do with it.
Hint: The result is a rock-solid business plan that will prevent both underfunding and unpredictability.
