"How to finance your new business"

Here is where all the thought and effort of your business planning really pays off. In your business plan you should have made some projections of where you would like your business to be and how you will get it there? Raising capital for your start-up and financing ongoing operations is an important wide ranging topic. It is the topic that you should master and monitor continually. Nothing will matter more as you market and operate your new business than having your finances in order at all times! This was the area of our business that was always the biggest challenge we faced ongoing? You should be gathering, measuring and monitoring data from the business weekly. Compare the data to your model. Act sooner not later, when you spot a trend going in the wrong direction. Find out what is happening and take actions to correct the problem. Using percentages of gross sales to track various segments of the overall operations is a way to monitor business activity. Look at overall sales as being 100%. Assign each area of your budget a percentage of tolerances of that 100%. Express these to each individual route. One route can be defined as a route driver and truck responsible for 225k to 375k in sales. Labor should be 10% of the route or less. Overall base cost for vehicle expenses might be at 4%. Cost for a warehouse might be 6%. Profit should be 20% to 35%. That leaves about 55% for all other expenses. Some of these will vary deepening on how well you shop for products and hold overall cost for supplies as low as possible. You also have to fit in the payment cost of equipment for a route amortized over a 3 to 5 year period. ( payments come from profits at that location)

How does the ‘little guy”, the one who has never raised capital before, go about it? You start by educating yourself as to what is available to you. Raising money is a function of the degree of sophistication and experience of the person evolved. You can have others who understand raising capital help, or you can try raising it through your own resources. You will find that a well defined set of rules come into play. If there is any one piece of advise most appropriate for you in need of raising money, it is that you should make a careful assessment of the proposed value of the business, determine how much capital is necessary, in what amounts and over what period of time? With any approach you will need a business plan! Once you have chosen a course of action, follow it without turning or abandoning it. Deviate from it only when the first choice is unfeasible. TENACITY IS KEY. If your ideas have merit, you can usually find away to work out the details.