5)  No experience

Banks and investors want to see that you have done something like this before.  If you spent your life as a mechanic, what do you know about making a great risotto?  This runs back to your management team.  You don’t need to know how to make the sauce, but you do need to have a partner who does.

4)  Unrealistic first year sales/salaries

Yes… you should be taking some money out to support yourself, but you shouldn’t be getting rich from day one.  We get asked all the time, “How much should I get paid?”  Generally, I say no salary at first; just take a dividend from what’s left.  This shows some “skin in the game.”

3)  Thinking funding is easy and not COMMITTING to the process

We finished up with a client about two years ago who JUST got their restaurant open last weekend.  Yes, they didn’t go the conventional funding route, but it’s not always a quick and easy, “turn in the plan, get some money” sort of market.  If it were, we would charge a lot more.  The plan is the beginning; lots of sweat and heavy lifting lie ahead.

2)  Aligning themselves with undesirables

We all have “that friend.”  The one we hang out with, or grew up with, or their parents are your parents and vice versa … but do they make good partnership material?  Sometimes you have to look honestly at the strengths and weaknesses of your colleagues and make a business decision based on what they bring to the business other than a common background.  Why would this effect funding?  I would say nine out of ten of our abandonment cases in the planning process come from partner disagreements.  I guess it’s good that that happens pre-funding, but it’s sad to see a good idea lost on personal issues.

1) Never starting to begin with

We track our incoming calls and sales (like everyone should) and have gleaned the following statistics.  Sooner started, sooner finished.  Calling people two to three weeks after they originally called us is usually depressing.  They’ve lost their excitement, their partners backed out, their location fell through … one way or another, it just didn’t happen.

So in short:  go with what you know or your partner knows, be ready to lay it all on the line for later financial gain (even if that means current poverty), be prepared to REALLY work the deal for a long time, choose your allies carefully, and, lastly, pull the trigger.  Nothing gets done while you’re “just thinking about it” other than that someone else is thinking about it, too … and they may move on the idea faster.  Waiting increases your opportunity cost far beyond whatever barrier is keeping you from starting the process.