Risking assets like your home is often the bottom line for business startups, says Shannon Coughlin, director of the Canada/Manitoba Business Service Centre (CMBSC) (Joel Schlesinger, Do your homework before starting up a new venture, Winnipeg Free Press).
But don't let this deter you from starting a new business. Having to risk your personal assets to get your new venture off the ground has always been a startup requirement for most new small businesses.
What it means is that the business plan is doubly important. It's not only a vehicle for getting money (as all lenders will expect to see one) but a way of safeguarding your money. As Warren puts it, writing a business plan forces you to take a idea and put it into concrete terms. You'll analyze both the positive and negative aspects of your new business idea and see just how viable your business idea is while you're doing it. Making putting up your house less of a risk.
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"You have to assume that if you are going into business, to start off, you will have to put your house up," says Robert Warren, executive director of the Stu Clark Centre for Entrepreneurship at the I.H. Asper School of Business. "You will end up signing a personal guarantee. That means if the business goes under, they are going to come after you."That's because usually it's up to the would-be entrepreneurs to come up with capital of their own, especially if they're opening a restaurant or retail venture (the two most popular types of business startups in my opinion).
But don't let this deter you from starting a new business. Having to risk your personal assets to get your new venture off the ground has always been a startup requirement for most new small businesses.
What it means is that the business plan is doubly important. It's not only a vehicle for getting money (as all lenders will expect to see one) but a way of safeguarding your money. As Warren puts it, writing a business plan forces you to take a idea and put it into concrete terms. You'll analyze both the positive and negative aspects of your new business idea and see just how viable your business idea is while you're doing it. Making putting up your house less of a risk.
More on Business Startup
- 5 Resources You Need to Succeed
- 8 Sources of Business Startup Money
- How to Write a Business Plan Step-By-Step
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