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Hello, We have filled out a bunch of grant applications, business plans, all the required paper work for who ever has asked us. And it is almost completely useless as a brand new business. Why? Because they ask you to give your projected/estimated costs and there is a 0% chance you will be accurate when giving them your answer. They are basically asking you to lie smartly to them. They also ask you to research your competition for comparing. Good Luck getting your soon to be competition to give you their books. So, you can guess, and you can lie. What we did, is we intentionally massively PRE over inflated how much we would spend in our first year and then we spent the exact amount money required to buy exactly what we needed, as we needed it and kept detailed records of it and then compared it to our guess at the end of the year. We guessed 350,000. We spent just shy of 320,000. We could have been ultra conservative in our purchases, and spread it out over years, but that would have made our first year “less” successful. We paid to make things happen as fast as possible and the exact way we wanted it to be. Not everyone is so lucky to have 8 other partners, we understand this. But the main point im saying, is we did what ever was required to get the job done, and accepted the risk and the costs as critical to achieve what we wanted to achieve. And now, going into our second year, we have everything we need and its just re stocking and maintainance.
Im not saying this is what will work for you, but it worked for us.
You bring up some great points Dan. Yes, it is highly unlikely most start ups have 8 partners to pool resources and capital. This was an incredible asset for you. The process you went through is the exact reason we’ve taken a different approach in this program than most institutions do. We believe in building a prototype you can bring to market quickly, to begin testing and shaping based on real market based feedback. Essentially, what’s the fastest path to revenue? The old ways of building a 50 page business plan and 3 years of financial projections, is as you say, pretend. You haven’t done anything yet, how can you possibly know? You MIGHT be able to make reasonable assumptions on your first year, but there’s no way we can predict what’s going to happen in years two or three. You make one wrong guess, and your trajectory goes off course. Better to start quickly and have actual information to work with and establish your baseline.
Thanks for sharing your experience Dan.
Erin.
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