Tuesday, September 23, 2014

Money Mistakes

As a business owner, are you making money mistakes? If you have answered 'no', I would like to know why you are so sure of this. Money mistakes are common when starting a company. It is a proven fact that most business owners have to endure 10 years (on average) of money mistakes before being able to avoid common pitfalls. This said, I want to talk about the pitfalls of asking for money from investors and the common mistakes associated with the query.

Most business owners would love to have a silent investor backing them. This, however, isn't possible for many companies because not all business ideas are scalable. If you watch the show Shark Tank on ABC, you know that there are plenty of great companies and ideas floating around- but that doesn't mean an investor is ready to jump on board. So, to avoid making a major money mistake when it comes to obtaining an investor, make sure you are presenting a scalable company.

Another investor pitch mistake is putting to much value on your company and not presenting actual numbers and verifiable growth sources. Saying a company is worth a million dollars is very different than showing that it is worth a million dollars. Asking for too much money based on the amount of equity you are willing to give up is a red flag to investors. After all, they have the cash and can open up a competing company and maintain all equity and profits. You have to prove your value, not guest-esitmate it!

I hope these two tips have been helpful. Remember, the next time you ask for money don't make the two most common mistakes mentioned above.

Until tomorrow,

Twyla N. Garrett

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