Business Plan help - investors

[Housey]

I have broken it down into two different startup costs. One if I self fund it and work part time, t'other if I quit my job and go full time.

As you say, with the latter the majority of the it is salary. It is an increase on what I earn now but only as a safety in case my gf loses her job so we're suddenly up the creek without a paddle.

So you're saying that to an investor, it would be more appealing if I am just opting for quitting my current job and going full time?

If I do it part time, I do not need an investor.

Couple of things...

No investor will want to hear you using their cash for your safety net. Paying yourself more, just in case, is not something investors will take kindly too, they expect you to take some risks too, not just de-risk your life at their costs. I would not mention you plan to pay yourself more than you are on today, less would be more appealing in fact.

This is a key point, just having an idea is not really worth much if it doesn't come with skin the in game. That could be working massive hours, that could be earning significantly less or it could mean hard targets to achieve on which bonuses are released.

I have invested and also been involved in a few start ups as a board advisor and any investor worth their salt will expect it to hurt not just their pocket but yours too as then they will believe you are committed.

 

[Phate]

Couple of things...

No investor will want to hear you using their cash for your safety net. Paying yourself more, just in case, is not something investors will take kindly too, they expect you to take some risks too, not just de-risk your life at their costs. I would not mention you plan to pay yourself more than you are on today, less would be more appealing in fact.

This is a key point, just having an idea is not really worth much if it doesn't come with skin the in game. That could be working massive hours, that could be earning significantly less or it could mean hard targets to achieve on which bonuses are released.

I have invested and also been involved in a few start ups as a board advisor and any investor worth their salt will expect it to hurt not just their pocket but yours too as then they will believe you are committed.

Good to know, thank you

To clarify, I do have more than just "an idea" it's something I've been researching here for a while. It's definitely a gap in the market. I have evidence showing a need of this kind of service as well.

Can I walk the walk when it comes to doing the work?? I have done for years. Just under someone elses name

 

[Housey]

Time & connections is important. Said investor is very well connected and already works in the IT/technology industry over here. If I want to get in touch with someone "on the inside" for almost any named player over here, I can call him and he will now someone. This kind of knowledge is invaluable. (For example about an hour ago I had an email from him with the rates the biggest IT Consultancy company over here charge, after speaking with him on the phone last night)

Also I've already mentioned in the thread. I have only been in this country for 6 months. Without a chat to the bank (which I'm arranging anyway) I do not actually know my chances of securing a bank loan. Another reason to look at the investor.

With it being an uncle in law, it might not be a full blown investor deal anyway. I need to speak with him and find out.

An investors time and connections at this level are worth significantly more than their investment. Have you leveraged any of them at this stage to validate your plans and to see if they might be your first customers?

You can't just commence a business without a clear plan for sales and understanding your cash burn and runway and ideally you want to start any business knowing who your first 3-5 customers are and be in a position to contract them in the first couple of quarters, assuming this isn't an R&D based business, which based on your cash projections it can't be.

I would also advise you to double if not treble your first year cash requirement estimates. Marketing, branding, entertainment, professional advice, travel, company stuff will all be big costs you probably haven't considered or costed fairly.

 

[randomshenans]

The above is why you need to complete your business model canvas. As you have assumptions on things like market (who your customers are), channels (marketing, how you will reach your customers etc.) and all of these things, but without testing them, you won't be able to have a concrete answer.
I wasted a ton of money on Linkedin Marketing thinking it was the best way to reach customers as that's where a lot of my customers are shown, but they don't read these things. Mail merges perform slightly better (1-4% response rate), direct mail and calling follow ups proves most fruitful, but also the attendance / booths at conferences (massive outlay in costs) is best marketing you can do to get your name seen to your target market. You just have to pick the right ones then. All of these things are very costly when you add them up. I've learnt a lot by doing it badly, but hey you learn.
I'd agree on trying to self fund, it not only shows you believe in what you're doing and are willing to take on the risk, but it gives you that freedom and retention of power/ equity, as the money you take now will cost you a lot more of the pie.