Читать книгу Start & Run a Catering Business - George Erdosh - Страница 34

Records compiled by the Small Business Administration indicate that a significant number of small businesses fail because of undercapitalization. What a waste! Would-be entrepreneurs start their undertakings full of enthusiasm, hope, diligence, skill, and a willingness to put in 80-hour work weeks — but without enough money. All their resources are put into the business — the money from a second mortgage on the house, a spouse moonlighting for extra funds — just to end up losing it all.

No amount of work and enthusiasm compensates for undercapitalization. You must have sufficient financial backing to start a business, to pay monthly fixed expenses even in negative cash flow months, and to have a cushion for unexpected expenses, which can be large if you need sudden repairs. You shouldn’t have to worry about paying your bills even if they turn up unexpectedly. The only thing that should concern you is cash coming in. That is plenty to worry about. You cannot afford to start your business until you are sure that you have enough money to support both your family and the business for at least six months to a year without relying on what you’re bringing in from events.

Budgeting skills are also necessary. Once you have a financial cushion, you can’t afford to see it shrink because of poor budgeting. It is definitely a skill you can learn. You know if you already have it. Have you survived so far in your personal life by bringing in more than you spend? If so, chances are, budgeting in your catering business will not be a problem.