Moving From Idea Stage to Seed Money

Every new small business takes time to get off the ground. Data published by Intuit, says that 60 percent of entrepreneurs spend six months in the thinking, researching and planning stage before launching their new business. And 21 percent spent between one and three years of planning before ever setting foot in the market. Creating a startup means putting it all together on paper successfully first. This phase definitely requires lots of patience to be thorough rather than rushing into an exciting idea.

After the planning stage is complete, the next big hurdle business owners face is coming up with seed money – the initial funds required to get things moving. The same survey from Intuit found that 83 percent of new business owners began their companies with a combination of their own personal funds and help from credit cards, home equity loans, their 401k plans or friends and family. A full 66 percent of entrepreneurs were completely self-funded from personal reserves. Before venture capitalists will come in and invest in a business, the company is usually up and running and showing potential for growth. Until that point businesses have to be resourceful in finding funding. Besides the sources named above, many potential firms are also turning to crowdfunding and angel investors for their seed money.

Even after all the seed money is procured and the business is running, more patience is required to see a payoff. Intuit says that a large majority – 82 percent – of new small businesses reported first-year revenues of less than $50,000. Roughly 8 percent reported above $100,000 that first year and just 1.2 percent of start-ups saw revenue of more than $1 million in the first 12 months. It may take several years for a small business to realize its potential profitability which means having enough seed money will be crucial to success.

Creating a start-up company will require a lot of patience and resourcefulness, but the rewards can be great and well worth the effort.


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