Nobody plans to fail they just fail to plan. That statement is no less true about the business world than any other aspect of life. One cause of new business failure is lack of funding and the inability to properly anticipate cash flow problems. However if you take the time to fully explore your possibilities and know where to turn for needed funding your chances of success are increased.
STARTUP FUNDING
If you have created a well thought out and detailed business plan you should have a good idea of the amount of money you need and there are several places you can turn to secure funding. While it’s possible you may get every penny you need from one source it’s likely you may have to find multiple sources.
1. Personal Savings.
This is the most popular source of funds for startups, and for good reason. Many investors and loan agencies will be hesitant to put up their money if you haven’t shown that you are able or willing to invest a portion of your own savings into the idea.
2. Friends and Family.
This is the second most popular source of funding. People close to you know your character and integrity and therefore are often more likely to help fund your business than outsiders. However this can become a tricky situation so be sure to set clear expectations and boundaries for all parties involved.
3. Angel Investors and Venture Capitalists.
Many of these individuals or corporations will gladly invest money in a business that has a solid business plan and the potential to make money. Crowd funding websites would fall under the category of angel investors. These people generally will help fund your business with little or no expectation of return or reward. Venture capitalists are in the business of making a profit off of their investments however. Before approaching an angel investor or a venture capitalist be prepared to make your pitch.
4. Government and Bank Loans.
These can often be the hardest types of funding to secure, especially since the Great Recession. Yet if you have a proven credit history and a solid business plan you shouldn’t overlook this potential source of funding.
DAILY EXPENSES
Congratulations, you made it through the startup phase and opened your doors! But don’t stop now. You now have to work hard to maintain the steady cash flow needed to pay your expenses. This is not always easy or possible on a daily basis.
Often business, and subsequent profits, will come in waves but your creditors aren’t willing to wait for you to pay them. Hopefully you anticipated this ahead of time and secured enough initial capital to get you through however, things can happen that even the most savvy business person was unable to plan for. In cases like this you may have to turn to a business cash advance.
Business cash advances are short term loans designed to help businesses pay their daily expenses. They are available from a number of sources and usually have specific criteria your business must meet in order to qualify. But for those that do qualify, this can mean the difference between getting through a rocky patch intact and having to close your doors for good.
Don’t fail to plan. If you adequately anticipate your financial needs and know where to turn for funding, your business will have a greater chance of success.