What Comes First: The Funding or The Planning?

For some of you, this is a no-brainer kind of question.  If we were on a game show, I would guess many of you would hit the buzzer for “planning”.  Duh!  It makes the most sense.  If there’s no plan in place, how can you ever fund the business?  But let’s change the scenario a bit — You have a great multi-dollar idea.  You don’t have all the details just yet and you definitely haven’t planned how this is all going to work out, but the idea is valuable.  To top it off, you’ve just landed yourself an investor!  You have a great idea followed by a great pitch.  After bouncing the idea off a few friends and family you now have someone who’s willing to invest.  Let’s morph this wonderfully ideal dream back into a bit of reality and say that the investor has agreed to fund the business but of course, wants a business plan, a proposal, a timeline (a deadline, really) and whatever else to assure him this is a lucrative and probable investment.  All from an idea.

Funding

Think of all the in-the-shower ideas we had come to us.  What if your multi-million idea was just like that?  An idea that  was born out of some repetitive task or inspiration brought on by frustration that anyone in their right mind would want to jump on and be a part of.   But while you’re lathering up and rising off, did you bother to figure out how to find the right manufacturer, or commercial slot or print ads in every national paper?  Probably not.  But you still have the idea.

What if you don’t have an idea for a product, but rather a service.  Manufacturers are not needed, neither is inventory or stock and overhead is probably much more manageable.  But a service idea is harder to picture than a product idea, which even in it’s conception phase can be sketched out.  Do you seeking funding for that idea first, or do you plan first?

Planning

Truth of the matter, there is no real easy answer or right decision, at least not across the board.  Some people are better at selling and others are better at planning.  Sellers will pitch to investors and planners with dot every ‘i’ and cross every ‘t’.  It’s also probably best that if you have a service based business idea, that you prepare a plan, an outline of what it is, what’s provided and how to get it from conception to realization.  The same goes for if you have a product based business idea.  But unlike a service idea, sometimes a concept is enough to win over the masses and a few investors.  That that conception has to be something that can be actualized.  And don’t feel bad if you’re one of those people who doesn’t like to write or focus too much on the itty-bitty details.  You can either outsourced that to someone else for a decent price or start building a team of people in which someone on your team can do that for you.  No matter what you idea is about, at some point planning is going to have to be involved and so will funds.  But in what you arrange them it’s up to and the idea.

{photo credits: dream designs and artur84 via freedigitalphotos.net}

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