Dear Start-Ups, You are setting out to build the next Google, Facebook, Scout-Mob. And why not? Due to new technology and the web, there are less barriers to entry and to building a business than ever before in history. But, as you move forward with passion, also move forward wisely...
The U.S. Bureau of Labor Statistics reveals that almost 60% of businesses shut down within the first four years. Many reasons exist for failure, but mismanaged revenue and expenses is consistently near the top of list. It will take you twice as long, cost you twice as much to get to the product or launch as what you are thinking. Plan your cashflow and financing likewise. "Be conservative with your financial projections and plan on having adquate funds when you launch to cover all sunk costs (including startup losses) until your company becomes cash flow positive."
Also, securing funding from investors will take much longer than you think and "commitments" aren't commitments until the check clears. There are plenty of tough moments for the entrepreneur...don't let underfunding, overspending or aggressive projections be your reason for failure.
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