How much money do you need to start your business?

The better question is, do YOU know how much you need to start YOUR business?  And do you know where you will get the money?  Of course, a lot of how much you will need depends on what type of business you will be starting, but it is important to have a good grasp of start-up costs, financial projections and cash flow. Two big questions are how will you get paid and how will you pay the rent?  If you haven’t thought that out, here’s a great online tool for calculating how much start-up cash you’ll need.

We encourage many entrepreneurs to learn about bootstrap financing, also known as ‘self-financing’, which means starting a business with little or no outside capital.  “But”, you say, “I don’t need any money, I’m going to get a grant to start up my business!”.  Contrary to what you read online, hear on late-night TV, or see in ads and seminars offering free money for start-ups, grants are few and far between and the majority of business start-ups require a significant contribution from the business owner.  I heard one speaker recently say that the average entrepreneur contributes at least $30,000 of his or her own money to start up their business.  This might be in the form of gifts or loans from friends and family members, maxing out credit cards or using personal savings.  Here’s a great article on asking your friends and relatives to buy-in to your business,“5 tips for asking Friends and Family for Money”, Entrepreneur.com.

In Washington State, there are some small business loan programs, microloan programs and grants available for start-ups, but these still require an investment  on the part of the business owner.  Also, you will most likely also need a business plan, personal financial statement and financial projections for any grant or loan application; also, quite often a bank will require at least a year of business history.  It’s a good idea to talk to your lender about the loan requirements in advance, rather than waiting until you’ve signed lease papers!

There are extremely limited grants available for the average business venture, unless you have some revolutionary product or are working on a high-tech or technology product, grants are even fewer and farther between.

Read more about financing your business and the Truth about Grants and Loans. There are some alternative financing mechanisms available (here’s another blog on creative bootstrap financing), let us know if you are aware of any reputable sources and we’ll be happy to share.

Lessons From Liberty: A Yakima County Start-Up Success Story

To kick off the Entrepreneur Spotlight series, an audience of local business supporters and entrepreneurs heard from Tim Andis, founder of Liberty Bottle Works.  Liberty Bottles are the only American-made metal water bottle, BPA-free, made out of 100% recycled product.  Andis recounted the story of how he came to start a manufacturing company in Yakima County and offered some nuggets of wisdom that he learned in getting his venture off the ground.

Tim tells the crowd that when he was working in the sports bottle industry, many of his customers wanted ‘Made in the USA’ products to satisfy demand from their environmentally responsible customers…and there was no product out there to meet the need.  Tim took this request to heart, and with the support of his family, started in on the venture to create a product and a socially responsible manufacturing company. Liberty Bottleworks was financed with private investment and a lot of sweat equity.

Tim also shared some of the lessons he learned along the way.  One of the most important pieces of advice he offered is to spend the time creating a quality business plan, and more importantly use it.  He also talked about how it took more time and money than he originally planned, “Double the money you think you need…and the time, it takes longer than you think to start a company”, Andis noted.

In addition to the lessons mentioned earlier, here are three worthwhile pieces of advice from Tim:

1.  Assemble a strong team. Know your leadership skills and weaknesses and fill in with key people where you need them.  I used to have a former boss that told me when she hired quality people it made her look good.  Having a well-rounded team of advisors, mentors and key employees is invaluable to a company, no matter if it’s new or old, or the type of business.

2.  Protect your Intellectual Property. Andis was emphatic about this, commenting that he was fortunate to Trademark the word Liberty, of all things.  He received patents for the design of the water bottle, the closure and, since Liberty is using a new manufacturing process that is not currently in the United States, he was able to protect the process and machinery as well.

3.  Develop strong partnerships. Whether it is with suppliers, vendors, customers, employees, financial partners or the community, this is a key component of success.  He also talked about how this is a ‘great, supportive community’, and he is especially thankful for strong financing partners, noting that when start-up costs came in higher than expected, he was able to raise additional capital from his current investors.

Finally, Tim explained that starting Liberty Bottles has been “a huge learning curve, there has been constant problem solving”.  He went on to say how important it is that your team needs to grow with the company and that he knew there would be challenges but had no idea of what to expect.

We are so pleased that Tim was able to share his story with some of our local entrepreneurs and members of the business community.  Watch for more on Liberty Bottle Works…the word is getting out – Whole Foods is doing a video on buying locally made products, Liberty Bottles will be in Sunset Magazine soon and also mentioned in the Boston Globe.  Follow them on Facebook for up-to-date news on the company and the product.  You can find the bottles locally at SportHaus and they are available at REI, with many other national brand stores coming online soon.  We are so excited to have Liberty Bottle Works in Yakima County!

 

Please join us on June 22, 2011 at 5:00 to meet Lori and Ruth Babcock, who started the Tieton Farm & Creamery in 2010; they were also the winners of the 2010 Enterprise Challenge.

Entrepreneur Spotlight: Start-Up Successes & Lessons Learned

New Vision and the Greater Yakima Chamber have joined forces to kick off a new series of learning and networking events focused on entrepreneurship.  These events will feature some of the region’s brightest new businesses at each month’s “Entrepreneur Spotlight”.

Our first event will feature Tim Andis, owner of Liberty Bottles.  The event will be on:

Thursday May 19th
5:00 – 7:00 p.m.
$5 for New Vision or Chamber members
$10 nonmembers

To reserve your spot(s) call the Chamber at 509-248-2021 or click here to register online.  Enjoy beverages, appetizers, and networking from 5-6 p.m.  Tim Andis will start his talk at six and discuss some of the initial successes, challenges and lessons learned from starting Liberty Bottles.  We hope to see you there!

To learn more about Liberty Bottles click here

Want to learn more about lean?

You may have heard about lean manufacturing, or the necessity for a company to ‘be lean’.  One common definition of Lean Manufacturing is a “systematic approach to identifying and eliminating waste through continuous improvement”.  In other words, constantly striving to identify areas to improve and ultimately reduce waste (i.e. cost, bad product, wasted time).  In this economy, companies are forced to be more efficient and do more with fewer employees to improve their company’s bottom line.

If you are interested in learning more about lean and its benefits, we are pleased to offer two introductory classes on Lean Manufacturing. Business owners, supervisors and employees will learn more about how lean manufacturing can help streamline their operations, improve efficiencies and cut costs.

This half-day workshop is designed to give a basic overview of Lean Manufacturing and the benefits a company can realize and how that translates into dollars.  Also hear how one of Yakima’s largest employers has been undergoing a company-wide lean transformation and how it has benefited employees and the company.

• Tuesday,  May 10th, 8:00 a.m. to noon, OR
  

• Thursday, May 12th, 8:00 a.m. to noon

For more information or to register, please visit the event registration page.