Keep Business Operations and Logistics Simple, Streamlined and Agile
Most of the entrepreneurs we interview in our consulting business have a very unrealistic conception of what excites and disappoints investors. The dream of many inexperienced inventors seeking to fund their opportunity is to build a substantial infrastructure. Their business plan identifies the need for factory space, equipment, staff, and many other fixed costs.
Investors want to see a plan that maximizes return on investment. High fixed costs are the enemy of a great profit margin. When business turns down, and it always does at some point, fixed cost assets become liabilities and must be continually fed, even as income declines.
Always present decision-makers with the most streamlined operations plan possible. Do not confuse grandiose staffing and equipment wants with actual needs. In today’s business climate, almost every possible service can be rented, leased, farmed out or performed by contract manufacture. A 25,000 square Nokia E65 foot factory that is not running at 100% capacity is an under-performing fixed cost asset, especially if a private label manufacturer will provide the service at a competitive price. The cost to rent, power, insure maintain and staff the facility is ongoing and will be a drain on the bottom-line.
Investors want to see a lean operation with no fat or excess. They will always be open to adding costs as growth and sales traction begin to kick in. Initially, the entrepreneur needs to display that he or she will be a prudent shepherd of the investment required to startup the enterprise. Here are a few areas where fixed costs can be avoided and potential investors greatly impressed.
Facilities
An opportunity killer is a funding request that includes money to Weldon homes buy a facility, office or plant. No startup can accurately pinpoint the growth (or failure) rate of a brand new business. Investors will want to see a plan reflecting realistic goals and space requirements. This almost always means renting facilities until need demands a purchase of facilities.
Manufacturing
There are almost no good reasons for a startup to manufacture their own product. Possibly, if there is a very valuable trade secret involved, but not often even in that case. All contract manufacturing should include a Non-Disclosure Agreement (NDA) as part питание для загара of negotiations. Contract manufacturing is available and utilized in almost every industry today. Estee Lauder manufactures almost none of the many cosmetic or fragrance products they market. Liz Claiborne and Calvin Klein make none of their apparel. Ikea sells only furniture made in third world facilities.
All monticello vacation rentals by owner of these companies, and many more, realized long ago that manufacturing was better left to factories located where labor, raw materials and government rules were not
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