Many people have sought private lending to start businesses without acquiring the necessary knowledge to ensure that the venture is a success. While the astute private lender would have his own set of guidelines to judge whether it is worth his while to invest in a business, it is unlikely that the funds would be forthcoming if the investor gets the idea that the entrepreneur is not fully cognizant as to how to run the business successfully. While the entrepreneur is not expected to be an expert about all matters pertaining to the running of a business, having overall knowledge and the required skills is a must if he wants to be successful. Those skills and knowledge that are lacking can be acquired by hiring the right people in various capacities as employees, consultants, advisors, etc. That is why the business plan that a private lending institution or individual would insist on should have a frank assessment of the entrepreneur’s personal expertise and skills which would indicate what areas of the business he or she would be personally able to handle and which areas will require outside help or additional learning on the part of the individual.
Managing people, identifying the market and target customers, knowledge about sales and marketing, inventory management, transportation as well as taxation matters, advertising avenues, book – keeping, etc. are all areas that one must consider gaining knowledge of to successfully run any venture. It is therefore critical to gain as thorough an amount of knowledge as is feasible before even starting out on any business venture.
