Fast Growth Needs Investment
Starting a business is quite different to how I envisaged. I imagined there would be a few hurdles at the beginning but after creating a product and interest then securing accounts we would quickly break even. Much of this has come true, however I never imagined how much of a spending machine a year old business could be.
Another realisation I’ve had is just how much money most start ups have behind them. Many start ups give an image of ‘zero to hero’ but I think the reality is there are quite a few zeros behind them. This doesn’t come from spite, I just feel it’s something that is kept behind closed doors as it’s not the most romantic image for a business that is trying to sell you something.
The very nature of our fast growth business requires considerable capital to maintain growth. This is a catch 22. We are growing before profiting, money comes in and leaves before we pay ourselves. We received a £25,000 loan from Virgin. This was so ideal for us at the time. We took some huge steps forward with this money and we are now in a position most businesses would take a few years to get to.
We have a product, we can produce an endless amount of the product, the business model makes a profit with all the costs in mind. However young businesses are unpredictable and we will spend money on the development of our brand to keep us at the forefront of this demanding wave of the industry. Not one penny of the loan has been misspent and has added huge value to our business. But we’ve realised that in order to grow at this pace we need some form of capital injection (more detail on why in full proposal). This is not a position of ‘keeping our heads above water’, it is us saying we are not prepared to slow down our growth. Our business is undoubtedly going to continue to increase in size, but for the time being we need to take a large slice of humble pie, and offer anyone that’s interest, a slice of our pie.
We have written an investment proposal and will potentially be looking at crowdfunding. But if you have any advice, questions, or interest, please please do get in touch at firstname.lastname@example.org