I suspect most hate dealing with the money side of business. It is afterall what will tell you when to call it quits or prevent you from doing anything in the first place.

Here are just a few of my thoughts.

1. Create a budget

2. Create a cash forecast

3. If/when it comes time to ask for money (investors, angels, friends, or family) - over estimate what you need. Don't go with a conservative estimate.

An investor would rather get hit once. Nothing send up a red flag more than "managment" coming back to their financial source and saying - ohh, sorry, I underestimated what would be required to get this show on the road. Asking for more money after demonstrating success is a different story.

4. when calculating your company's capital requirments to start the business - take your figure and double it, that's the amount that you will actually need.

5. Be cheap....I mean frugile...I actually mean cheap!

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Be honest with yourself and don't ignore the financial reality. Its easy to estimate what you know will come - electric, phone, rent, etc. However, the reality is that you will spend money on unforseen or suddenly urgent events. Most importantly - make sure you include marketing/advertising expenses. This part is the toughest.

Some of my thoughts and experiences.

I would love to hear what others have to say about this topic.

I agree with you. I have had to kick in a lot more money than I originally planned due to the unexpected thing, even after I wrote a business plan. We are going to go for another round of funding in order to get our products into retail, and have come to learn that whatever you think it is, double it as you said.

Very good insite to someone starting up.

mgriffin,

Excellent post- "create captial requirements and then double it" is right on the money.