Having your startup gives you a feeling of joy and pride, but it also comes with a lot of stress without financial planning. Because a lot of that stress is finance related. You have to make sure that you do not spend any unnecessary penny.
For this purpose, a lot of us partake in a lot of activities that are all for the sake of the startup, but some of them are not as helpful as we thought they would be. Living off cereals and noodles and living as minimalist as we can have their advantages, but in the long run, this is not the way to fund your startup.
You might save a couple of bucks here and there, but you won’t be able to increase your funding in a major way. Depending only on these things can hurt you and your recently opened business.
So, today we thought we would share with you some ways that you can finance your startup without starving yourself or working without the lights or the heat.
Why Do You Financial Planning?
It is pretty obvious for most of us. Either we want investment to start our company, or we already have an existing business, and we want to expand it into different avenues and do not have the dough to make that happen.
The important question that we should ask ourselves is this:Do we need the money from an outside source?Can we not save it ourselves or increase our sales to ensure that we get that money and do not have to pay it back to others?
A lot of times, all you need is some financial planning, and you could be on your way to financial bliss without depending on anybody else. You may or may not believe it, but often the simplest solution is also the best solution. Cutting your costs, increasing your sales, and finding other creative ways can sometimes fulfill your requirements easily enough.
Choosing the Best Funding Strategy for Your Business
Depending on what you require the money for, what resources you have, and how soon do you need the money, there are various options for you to choose. Just make sure that you have done your research and select the best possible source. Also, ensure that you have your facts and figures down.
No one is going to invest in a company whose owner does not know his own business. It means that you need to have the perfect pitch; you must have an accurate report on the finances and a kickass business plan.
Let’s look at some of the ways that you can get that money within the time frame that you need.
You might not have considered this as financial planning, but your credit cards could be your way out of a financial crisis or to fund your business. There are pros and cons of using credit cards to fund your business, but if you are an astute businessman, you can pull this off.
The benefit of using your credit cards is that you are your own master. You have full control of your company, and you can get the money as soon as you want. Another benefit is you do not have to worry about paying someone else; as long as you pay regularly.
The cons are that the interest rates will be very high, and whether the business succeeds or not, you have debts to pay.
The use of your credit cards depends on how much money you require. If you do not need a lot, then using your credit cards can be a good option to look. Another thing that will affect your credit limit and interest rate is your credit score. So make sure that you know all about it and how it can impact you.
Another way of gaining some short term cash that has gained a lot of popularity recently is crowdfunding. It all depends on the size of your network and whether you have an idea that people will find interesting. If you have the network and an amazing idea, then you can always go to websites like Kickstarter. Or other crowdfunding platforms and ask the people for help. You can promote your brand and let the people know what your vision is.
In your financial planning, you can book pre-sale orders and a lot more on a crowdfunding platform.
Friends and Family
Another popular way of getting the money that you want is to go to your family and friends and ask them to invest in your company. No one knows you better than your family and your network of friends. They know what skills you have, and they will believe in your vision faster than an outsider.
The only downside of this option is that you are putting your relationships at risk. If the business does not pan out or if there is any sort of miscommunication, then you might find yourself with a broken relationship. If you go for this option, make sure that you have a strong and reliable agreement that spells out everything in black and white.
Small Business Administration
Another great option for you is the U.S. Small Business Association (SBA). They offer a lot of options for loans as well as grants for small business so that you can fulfill your needs of equipment, bigger office space, seasonal changes and more. They also have a lot of online resources and tools to help you out along the way.
As it is a government entity, the process involved is a time consuming one, and you might not get your loan as quickly as you thought you would. There is also a lot of documentation involved.
During your financial planning you can always make your way towards an angel investor. These are wealthy individuals who are interested in good business ideas and are willing to provide the money that young companies look for. Recently they have become hugely popular, and there are now various angel networks and groups of people who have joined the angel ranks. You will need to have an amazing business plan. As they are investing their own money, they will take a deep look into all your processes and only invest in your company if they are truly satisfied.
Wrapping It Up
There are various financial planning paths that you can take to make sure that you have the money for the company, whether it is a startup or an existing business. The important thing is that to research and finds the best possible option for yourself, depending on your need as well as the business’s need