Entrepreneurship For Dummies, 2nd Edition

Chapter 12

Assessing Your Initial Financial Needs

IN THIS CHAPTER

Estimating demand for your product or service

Checking how deep your pockets must be

Reporting your finances

Estimating how much capital you’ll need to start

You have no doubt read stories about entrepreneurs who secured millions of dollars in investment with financials that projected years of losses before finally turning a profit. Amazon, one of the most successful brands in the world, didn’t make a profit for nearly nine years, and their investors were getting quite antsy. Let me emphasize that while this strategy is not uncommon, it is definitely not the norm, so don’t expect it to hold true for you. Investors will expect you to lay out a viable plan for making a reasonable profit as quickly as possible.

While a lot of money is available to entrepreneurs with powerful concepts, investors are much smarter and more savvy to the inner workings of e-commerce and what makes a good business investment. They aren’t throwing money after concepts that can’t demonstrate a solid revenue model or that won’t be profitable ...