As far as I can! This would be the simple answer is shouted by most entrepreneurs. The fact is that both over and under-estimate the amount of capital required to finance a business can be serious negative consequences.

Underestimate what you may have problems that go from having to use all the time consumption of the fund raising process again need to create, after closing the business because funds have run dry. Having to go home to return investors are demanding more money and often undermines the credibility of the contractor with investors and may lead to significant dilution of their ownership of the founder.

Get more than enough capital can be like a blessing at first, but it can cause a lax attitude toward the control of expenditure. . “If you have it, spend it,” the currency is not desirable for a new company if the investment is made in the form of equity, raising too much money means that the proportion of the founders of the company has been more than necessary – and this reduced violates one of the maxims of entrepreneurship: Keep these points in equity!

Typical advice for entrepreneurs is a projection of cash flows or cash flow, then add a 10%, 20% or even 50% of that amount for the “unexpected”. These unexpected results are all things that can go wrong in a start-up cause any adverse events that damage.

Contingency planning is a skill that does not come easily to all entrepreneurs – even those who finance background. How do you get the squint optimistic (which we must be able to introduce the idea of starting a business), who expects the best, plan for the worst?

To promote emergency planning, it is useful to examine the reasons why entrepreneurs are so consistent in money, including:

Not realizing how expensive it is introducing a new product, consumer products, mainly national basis.

Unaware of how long it takes to introduce a new product or for the market to accept the product really does.

Delays in regulatory approval, local zoning or licensing of patents.

Under the assumption that a small start-ups with the same patience for payments and favorable conditions, which have a strong will.

A contractor of a company in the early phase should occur for one or more of these situations, be prepared. Emergency preparedness is not just a percentage or dollar “cushion” for the amount of capital from investors or lenders sought. It is a kind of thinking – a recognition that the path of entrepreneurship is still rocky. Imagine what could go wrong, does not mean entrepreneurs lose confidence in their product or company, that they take these difficulties as steps on the path to prosperity.