Should I stake my own money on an expansion venture?

Dear Aunty B,

I have a fantastic business that has had market validation, passionate managers with long experience in the industry and loyal staff.

I am trying to raise money for growth but although the group of products provide customers with a very quick return, I am having trouble selling it.

I have been trying to raise some money for a big marketing campaign as the market needs education and I am actually thinking of putting my own money towards this, which my wife is against if I can’t raise the money.

Can you tell me what the risks are of me putting in my own money?

Dean

BM

 

Dear Dean,

What are the risks of putting in your own money? You lose it – and your wife – is what.

Look, the biggest thing for you to work out is this, and it is a very common problem: Have you got a great product that the world wants, and that a clever marketing plan will significantly boost sales? Or is your product wrong?

You said you had been trying to raise some money. Think back to what the potential investors said about, no, not your product, but your potential customers.

What were the questions they asked? Did they ask you to demonstrate that there was a compelling need to buy your products? In other words, can they live without you?

I suggest now that you are thinking of putting your own money behind the business you have a really honest look at the marketplace, what it needs and where that need is currently being fulfilled.

Ask some clever friends to put you on the spot and grill you about the value proposition. Remove the passion you have for the business and your products. You never know. If you go through that process you may emerge with stronger business.

Be smart,

Your Aunty B

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