A disciplined path from an initial concept or acquisition opportunity to a business with accountable management and a funded operating plan.
Kreative Koncepts’ venture model covers original concepts, acquisitions, and the development of existing business assets. The work begins with the market and continues through ownership, operating management, growth, and an eventual decision to retain, sell, restructure, or close.
Our approach evaluates the work behind an opportunity: evidence of demand, delivery requirements, economics, management capacity, and the conditions needed to operate responsibly. Entity formation and branding are part of development, alongside the decisions that make a business viable.
A promising concept can earn a limited research budget. Launch capital requires a complete operating case. Additional growth funding requires actual results.
Each opportunity starts with a clear account of the customer, the offer, the competitive alternatives, and the resources required to deliver. Research should identify the weaknesses in the case as carefully as its strengths.
Customer interest is useful, but purchasing behavior provides stronger evidence. The financial case considers price, direct costs, staffing, working capital, and the time required to reach sustainable operations. A downside scenario tests how delays, slower collections, or weaker sales would affect cash needs.
A business requires someone who can run it. Operator capability, available time, supplier dependencies, and systems requirements belong in the initial assessment. Expansion must fit the organization’s ability to supervise and support the work.
The review considers ownership rights, applicable licenses, insurance, contracts, and the potential effect on customers and other businesses. Capital commitments need a defined purpose and a realistic limit. An unresolved material issue must be addressed before it becomes an operating obligation.
Identify the customer, purchasing behavior, competing offers, market constraints, and operating requirements. Use interviews and direct evidence. Assign a sponsor and a capped research budget.
Decision: Proceed with a test, revise the concept, or archive it.
Run the smallest lawful test that can show willingness to pay and ability to deliver. Set price, cost, quality, refund, and conversion measures before testing. Do not accept payments before required legal and operational conditions are met.
Decision: Require evidence against predefined success and failure measures.
Prepare a 12 month monthly operating forecast, a 13 week cash forecast, staffing plan, total capital exposure, risks, proposed entity, and launch milestones. Record base and downside assumptions.
Decision: Board approves a maximum commitment and the first funding tranche, or declines.
Confirm ownership and tax structure with advisers. Form the entity or authorize the existing operator, adopt governing documents, appoint managers, register as required, and establish banking and accounting. Document equity or loans.
Decision: Ownership, capital, authority, and entity records must reconcile.
Clear the business name, document IP rights, secure domains and accounts, arrange systems, price the offer, negotiate vendor terms, and prepare customer contracts and policies.
Decision: The business can identify who sells, who delivers, who owns the assets, and who answers complaints.
Confirm licenses, permits, insurance, payroll setup, payment processing, data controls, signed contracts, opening balances, operating procedures, and available working capital. Assign a manager and backup.
Decision: Manager certifies readiness; finance and advisers clear their items; authorized decision makers release launch funds.
Review cash weekly and close books monthly. Track customer outcomes, delivery cost, recurring demand, staffing capacity, and budget variances. Resolve exceptions before adding complexity.
Decision: At 30, 60, and 90 days, continue, correct, pause, or stop against the approved plan.
Approve expansion only after the operating model works and the additional investment has a supported return. Compare buying, leasing, hiring, outsourcing, and doing nothing. Inspect title, maintenance, financing, and integration needs.
Decision: Release additional capital against measurable milestones; update the exposure and cash forecast.
Review strategic fit, future cash needs, operator continuity, legal obligations, and likely net proceeds. Retention is an active capital decision. Plan any transition before signing.
Decision: Board and relevant entity approvals, creditor and contract consents, and documented execution.
Buying an operating company requires more than verifying reported profit. Separate the price of the business from the cash needed to stabilize it, replace assets, retain staff, and finance the first operating cycle.
| Diligence area | What must be resolved |
|---|---|
| Financial quality | Reconcile revenue to invoices, bank receipts, and tax records. Test margins, owner adjustments, customer concentration, receivable collectability, inventory, payroll, maintenance spending, and working capital seasonality. |
| Legal and ownership | Verify seller authority, cap table, liens, contracts, litigation, permits, transfer restrictions, employee obligations, IP title, privacy obligations, and required consents. |
| Commercial and operational | Interview customers and key staff with appropriate permissions. Understand demand, supplier dependencies, owner dependence, delivery quality, systems access, and loss scenarios. |
| Deal structure | Compare asset and equity purchase consequences, assumed liabilities, tax allocation, financing, guarantees, working capital target, escrow, indemnities, and earnout measurement. |
| Integration | Identify the day one operator, bank and payroll transition, insurance binding, customer communications, accounting opening balances, systems access, and the first 100 day priorities. |
Do not promise a fixed closing timetable or funding availability before financing and diligence are complete. An asset purchase does not automatically eliminate successor liability, tax exposure, or permit transfer issues. Obtain transaction specific legal and accounting advice before signing binding terms.
The acquisition approval packet should state price, total funding, source of funds, downside cash requirement, debt service, manager continuity, required consents, unresolved issues, and a walk-away position. Approve the entire exposure, including guarantees and post-close commitments.
Keep ownership, contracts, financial records, IP, personnel responsibilities, and operational procedures organized from the start. Review assignment and change of control provisions. Compare an asset sale with an equity sale based on liabilities, consent requirements, tax, and net cash proceeds. Plan transition services, customer communications, indemnities, escrow, and retained responsibilities.
Document why the existing plan is failing, the cost of correction, the owner of the turnaround, and a fixed review date. Stop new discretionary commitments while the plan is assessed. Moving assets, writing off related party balances, or forgiving loans requires proper approvals and tax and creditor review. Do not shift losses or valuable property among entities to conceal distress.
Stop taking obligations the business cannot fulfill. Reconcile customer deposits, refunds, employee pay, taxes, vendors, leases, debt, and contingent claims. Preserve adequate reserves and obtain advice on creditor priorities. Address regulatory notifications, final returns, dissolution procedures, insurance run-off, records custody, and access termination. Distribute residual assets only after applicable requirements are satisfied.
Record the final capital lost or recovered and what the parent learned. An orderly early stop can preserve more value than repeated unsupported funding.
