Tip 6: Wham – Last Christmas

Last Christmas is about a mistake that is not going to be repeated. At this stage of his career George Michael was clearly learning from past experiences, a skill that some might say has seemingly eluded him in later life.

It is often said that the reason the British are not as enterprising as our cousins across the Atlantic is that here there is a stigma attached to failure. It is seems that nearly everybody in the public eye is desperate to avoid admitting to an error of any kind. Business leaders proudly proclaim that failure is not an option.

The fact is that failure is always an option however well you plan. Indeed not planning for failure is almost as big a risk as not planning at all. Plan B should always be in place, even Plan C if you are ultra careful.

Many business plans that we see assume growth and massive returns in, oh say, three years’ time. Very few of them explain what might happen if this does not happen, or if it takes longer than anticipated. Yet when asking for finance, it is vital to build in some contingencies to cope with the unforeseen. Equally it is important that you demonstrate that you will have tight controls on any cash raised so that a contingency is just that, and not an additional pot of money to spend on a management whim.

By including a contingency, you demonstrate a sense of realism that will be appreciated. Also if you are not able to persuade an investor to part with the contingency cash up front, you have laid down a future marker. It is much better to ask for too much cash now than to get it wrong and have to go back for additional finance later.

Failure is a fact of life. There is nothing wrong with making an honest mistake. Unless of course it is the same mistake time and time again….

http://www.youtube.com/watch?v=E8gmARGvPlI

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