If you have a new business idea that you want to turn into a reality, then you’ll need to have some startup capital to get it off the ground.
Looking for investments to get your new business started can be a challenge. You’ll need to put in a lot of work to try and win over potential backers to put money down on your ideas.
Of course, there is a considerable risk involved in investing. Someone could fund your business idea and it could all come to nothing.
With so much at stake for investors, how do you convince them to part with their money?
One way will be by creating a plausible budget and by proving that your idea can work.
Here’s how you can create the business plan and budget that will lead to your success.
Include Everything In Your Budget
So you’ve got a great idea for a business, but if you turn up to pitch your project to investors with a concept that hasn’t been thought through thoroughly, then investors will see through it.
It’s essential that your budget includes everything and that it is fully costed.
Don’t just estimate the prices in your budget, go out, and get credible quotes. If you need to hire contractors, get a few competitive quotes lined up. If you need industrial water pumps, shop around, and find out the best prices.
Think About Your Staffing Costs
One of the areas that are likely to cost you the most money overall will be your wage bill.
Work out how many staff your business is going to need. Then factor in how much each one will earn. Remember, if you want a high standard of employee, then you’ll need to pay them a competitive wage.
It is also essential to consider that it is best to overestimate your staffing needs than to be understaffed and underequipped to meet the needs of your own business.
Include a Contingency
Your business budget should always include a contingency. There are so many things that can go wrong, and so many reasons that your project can run over budget, it is essential that you always have a small amount of surplus money in the budget to accommodate this.
Having a contingency of around 10%-15% will provide you with a safety net that will protect you. In the event that you did run out of money, there is no guarantee that would ever manage to finish the project and you’d have sunk all of the investor’s money into it already.
Before you enter the room with your investors to pitch your proposal, you need to make sure that you are well-rehearsed.
Learn your business plan and your budget back-to-front. You need to know every figure off-by-heart.
Investors are not just investing in your idea, they are also investing in you. You need to inspire confidence in your investors or they won’t put their money in at all.