I’m in the position at present of making financial projections in an effort to raise capital.  The backasswards thing about it is the most accurate projection is “I have no idea.”

With sufficient funding, then sales grow “a lot.” Without that funding, they grow “not as much.” Zeroing in on anything more specific is tough.  Having been on both sides of the table, I certainly understand the need/want to see what invested money will lead to with a business.  But part of the numbers comes down to simply trusting the people at the business:  the investment is good if you trust them to grow the business, which eventually leads to a good ROI.  And if you don’t trust them, then you should pass.

If your business is looking for funding then the truth is, in the end, the investment is being made in YOU.  That’s why its easiest to raise funds from friends and family; they know you and believe in you.  Convincing a total stranger is a different beast entirely.


One Response

  1. “the investment is being made in YOU” – Well said. Coming from a sales background I can relate in that I am constantly asked for my business projections.

    Working for a few employers I have noticed two types of organizations or people: 1) Has faith and trust in the employee’s ability and gives the employee enough room to fail or succeed. 2) Does not have faith in the employee and interferes with the business plan. It is my opinion the latter stunts business growth and eventually causes enough tension one of the parties leaves the business or venture no matter how successful the business is.

    Be careful who you select to fund your business and make sure they have faith in you in addition to the business plan…

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