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Problems After Start-Up

September 17, 2006

Q- I currently own a business in the entertainment industry - and I'm stuck. I rushed into conducting business without much of a strategy, and I could use any advice you are able to give. I have been in business since January of this year, and I'm just now working on my business plan. I'm having trouble with that, along with figuring out my finances, executing a marketing strategy - the list goes on and on. If you could offer me any advice whatsoever, or even lead me in the right direction, I'd really appreciate it.

You definitely have some major issues that have to be addressed. In triage situations, you try to work on the most critical items first, and in business, this is normally finance. Without adequate cash, your entire business just implodes.

I would start by doing a forecast of your future cash flows. You do this by estimating your future cash inflows and then netting out your cash outflows. If you have a negative balance, then you need more money, but if the net balance is positive, then you have an excess amount of cash. Sometimes this process is called developing a pro forma cash flow. If you do not feel comfortable enough to do this, then ask your accountant to help you through it. Every business needs a pro forma cash flow budget!

If you do not have enough funds to make up possible cash flow deficits in the future, then you are probably going to have to borrow some funds. The easiest way to do this is to approach some of your friends, family and acquaintances for these funds, and if this does not work, then to go the bank route (assuming you have great credit). Additionally, the Small Business Administration has some specific loan programs for new businesses.

If dealing with finances gives you some breathing room, then you should focus next on developing a business plan, as it will give you a roadmap to get through the problems that you are handling. A business plan should deal with all of your marketing issues and your other concerns.

If you are trying to write the business plan at the same time you are running a business, this is tough. My suggestion here would be for you to move slowly through the process of writing your business plan by writing a little bit every day.

The key to the success of any business is having a plan as it gives you direction, and every business needs direction. Start-up businesses need a plan more than any other type of business, as they are so fragile.

Now go out and deal first with your finances, then move on to create a great business plan.