November 30, 2021

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Money, money, money… How many euros do you need to start a business?


Find the money, and fast. A legitimate concern for a project leader! But before launching the race for funding, it is essential to ask yourself these preliminary questions: money, yes, but how much? and why do ?

Estimating your financing needs is closely linked to the company’s strategy. A lack of thought can put the start-up in danger. “It’s a job often poorly done by entrepreneurs. Some want to do with the means at hand, others to raise a million without really thinking about what they are going to do with it, ”noted Alexandre Chopin, partner accountant at TGS France.

Minimum accounting knowledge

Maison Felger almost paid it off. This start-up specializing in the manufacture of high-end custom shoes has come very close to going out of business. In 2017, the project leaders, Maria and Cyril Karunagaran, outlined a five-year financial roadmap with an initial budget of 100,000 euros, including a precautionary mattress of 10,000 euros. “We have defined this amount in euros according to our strategy of penetrating the high-end market. We needed a shop, a scanner, prototypes, customer contacts… ”, explains Maria Karunagaran. It was without counting the blows of fate.

First, an intractable shoe manufacturer demanding cash payments, then, above all, the health crisis which forced the curtain to be lowered in November 2020. “In fact, we should have provided 40,000 to 50,000 euros more,” notes Cyril Karunagaran . We were lucky to have a benevolent network which supported us with love money. ”

How to accurately assess your financing needs? “First point, know yourself: Do I want to become a unicorn or a local business? “, Recommends Adrien Chatiel, founder of Eldorado, a platform for bringing entrepreneurs and investors together, and author of the book” Obtain the best financing for your project “(Ed. Vuibert).

It all depends on the ambitions of the start-up. “You can get help from a chartered accountant, but he doesn’t have to do everything. Business strategy cannot be delegated. In any case, it is essential to acquire a minimum of knowledge in accounting. According to Adrien Chatiel, the project leader must know how to master the basics of a cash flow plan to make the figures interact in an Excel table.



The co-founders of Fasteesh multiplied the sources of funding before soliciting investors.
– DR

12 months of working capital

Alexandre Chopin supports entrepreneurs in establishing their forecasts. It advocates a reflection in three stages. First, the financing needs for the design of the product, in particular R&D. Then the investments in marketing and communication for the launch on the market. Finally, the development of the HR strategy over three years to support growth. “From this reflection derive the company’s fixed costs, such as office rents,” underlines the accountant. We must build the forecast according to a cost strategy, and not turnover, by relating a vision. ”

And the famous precautionary mattress? “It is calculated on the basis of future costs according to the expected turnover, recommends Alexandre Chopin. Expenses can be more or less smoothed over time by adopting a progressive or aggressive strategy. Generally speaking, you need 12 months of working capital ”.

And to supply its cash flow without getting into debt, many sources of funding exist: crowdfunding, honorary loans, public aid for creation and innovation … In 2017, Benjamin Cohen, co-founder of the brush brand à dents Y-Brush, benefited from a financial boost from the French Tech Stock Exchange. His start-up Fasteesh has also collected Love Money and rewards: Lyon Start-up, Inpi, Start Up and Handicap competition …

This first prize pool then enabled him to turn to individual investors. “It’s complex. It is important to properly schedule funding requests according to the type of expenditure and the stage of development of the company, ”notes the founder of Fasteesh, who has since carried out several fundraising events.

How to establish a good schedule? “You have to see how other companies with a somewhat similar business have financed themselves, and rely on networks of entrepreneurs to exchange views between peers,” concludes Adrien Chatiel.