There are two funding rules of thumb that too few startup entrepreneurs are aware of. One: The timeframe you predict you’ll break even is normally double in reality. Two: The funding you predict you need will turn out to be four times more than what you thought. These rules have massive implications for any business’s ability to survive the initial months and years of its existence. Common forms of startup funding are personal savings and credit card facilities. This is followed by the three Fs – friends, fools and family – and finally, you try the banks and investors. We present a magnificent j-curve of our three-year forecast while trying to convince them to part with their money. Because it’s embarrassing to approach family and friends for funding, we feel compelled to present the lowest possible amount we need to borrow with the quickest possible payback period. And so, when our “sure thing” doesn’t pan out in the way our Excel spreadsheet said it would, we find it difficult to go back to our “financiers” to either delay repayment or ask for more money. A vicious cycle has begun that few small businesses will live through. Join Allon Raiz for episode 3 of his 20 lessons over 20 years podcast series where he talks about the correct way to finance a business.

Many would-be entrepreneurs make the assumption that if a problem can be solved by a product or service, it amounts to a sustainable business. A cold toilet seat in the middle of winter is a problem that many people would love solved. However, there is a miniscule subset of people who would be prepared to pay for the installation and running costs of an electrically heated toilet seat for their home or office. Aspiring entrepreneurs erroneously view a market as a function of a perceived problem without considering whether people would be prepared to pay for the cost of solving that problem. Listen to episode two of 20 lessons over 20 years where Allon Raiz discusses the importance of taking time to honestly assess the market size, the ability of that market to pay the right price, and the right time to enter the market.

Anyone who has started a business recently or is about to start a business should ask themselves the serious question: Am I really an entrepreneur? At its core the question does not refer to the skills of an entrepreneur but rather to their characteristics. Statistics show that 96% of businesses do not see their tenth year (in fact, most do not even see their third year) but 100% of people who start a business believe that they will be successful, and most think of themselves as entrepreneurial. Listen to episode one of 20 lessons over 20 years where Allon Raiz discusses what it takes to survive as an entrepreneur.