Wise Business Plans Help Family Businesses & Families Stay Strong
15th January 2014 Paul Andrews
Careful planning doesn't just show that you've done your due diligence - it's a sign of respect.
As the economy continues to recover from the recent slowdown, entrepreneurs are looking to friends and family members for an easier and faster financing option than approaching venture capitalists and outside investors. But, all too often, new business owners treat family funding like a casual loan -- and that can be a huge mistake.
Treat family and friends with the same care as any other potential investor. Careful planning doesn't just show that you've done your due diligence -- it's a sign of respect.
"Starting or expanding a business can require vast amounts of money, and while banks have ways to recoup their losses, friends and family almost always do not," said Joseph Ferriolo, director of Wise Business Plans, which provides individual, custom-designed business plans for startups and expanding businesses.
"If you're asking a loved one to step into a business relationship with you, it's even more important to treat their funds with all the care you can, and that means having a game plan and approaching your potential investors in a professional manner."
"That requires having a fully realized business plan and being up-front about financials," he said.
"Too often, we ask people we're close with to step forward and take a leap of faith without opening up and sharing information in return. Don't ask a family member to risk hard-earned money without being completely honest not only about the financial possibilities for your business venture, but also about the market you plan to jump into."
"Having a professionally written business plan can help loved ones feel more secure and allow them to understand the strengths and the risks of your company concept," Ferriolo said.
"These are the people you've chosen to make a life with. Now you're inviting them into your business," he said. "Careful planning doesn't just show that you've done your due diligence -- it's a sign of respect."
Joseph Ferriolo is a director of Wise Business Plans. To find out more please visit www.wisebusinessplans.com