Dont Fret About Financing Your Business
Dont Fret About Financing Your Business
The first thing you have to recognise if you want to run a business, is that there is a degree of risk attached to all business ventures and you have to be prepared to take some risk. ‘Risk adverse’ people make very poor business operators (and this includes the partners!) However it is prudent to take steps to minimise risks, especially financial ones.
The greatest difficulty all ‘start up’ businesses face is lack of seed funding to commence. Work out what the minimum capital is you require to get the business started; then work out how long you think it will take before you will make a profit; also decide how you will access start up capital (loan, use savings, part time work to support the business etc.)
I have known successful business operators commence with $500 on bank card! Many people commence a home based business (HBB) because of the lower setting up costs and most of them carefully consider alternative funding. It doesn’t matter what type of business you have or what size Micro or HBB you have, lack of finance, lack of financial controls, and lack of cash flow will be the most common problems you face.
Ways that operators can (and do) finance their business are varied.
* Employment - Take on outside employment to fund your business at its start up level.
* Savings - If you are fortunate enough to have such resources, it is still imperative that you have a plan in place.
* Bricks ‘n Mortar - Many businesses get finance from banks through a line of credit based on the collateral in their home.
* Banks - The most successful way to utilise banks to assist you, is through a credit card, as long as you can pay it in full within the specified credit terms.
* Partners - Even though this can be a good solution, it is also fraught with danger and often results in ‘falling out’ with the eventual collapse of both the business and the friendship.
* Venture Capital - For someone to invest in your business, they will want to make a profit and will be looking to invest in the realm of $250,000.
* Loans - If a relative or friend assists you to get started by advancing you a loan, be professional and ensure you know what interest they charge and how long you have to pay it back.
* Equity Partners - A loan from an equity partner usually does not have to be repaid, unless the business is wound up or sold.
Once you have decided how to fund your business you must also be able to keep the cash ‘flowing’. It is not so much that poor profit will send a business under, it is more likely to be poor costing and lack of cash flow. It is essential to keep an accurate set of books to help minimise the risk. Remember - keeping accurate books can help you keep your money
Costing must be accurate too. If you are in a service industry hourly rates charged may appear high, as they have to cover non-billable hours, overheads and billable hours. The biggest mistake made in costing a manufacturing business is inaccurate (or simply forgotten) overheads.
Make sure your trading terms are in writing and that customers are given a copy. Take the time to explain the terms to them – you do not want to be in a position later of a customer saying “Oh I remember something being handed to me – but I never got around to reading it – or I didn’t understand it”.
If you do not have bookkeeping or accounting skills – then ensure you engage the services of both. But don’t use the accountant to do simple bookkeeping tasks – you will pay through the nose if you do. I uniquely solved this problem (as I am not good with numbers) – and don’t necessarily recommend it - I have been married twice and they were both accountants!
******************************************************************
Barbara Gabogrecan has dedicated the last 10 years to supporting the Micro & HBB sector. She is an author, artist & entrepreneur. You can access her FREE e-book ‘How to Fund Your Business!” full of tips and hints on how to finance your business and keep in the black - by going to bottom of the home page on htpp://www.micronavigator.com.au.
Dont Fret About Financing Your Business - To learn more about this author, visit Barbara Gabogrecan's Website.
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Many people want to commence their own business, but hesitate because of the difficulty of funding such a venture. It is great if you have an inheritance or a ‘pay out’ from work or superannuation – but even then people worry that they may lose their savings if their business idea does not work.
The first thing you have to recognise if you want to run a business, is that there is a degree of risk attached to all business ventures and you have to be prepared to take some risk. ‘Risk adverse’ people make very poor business operators (and this includes the partners!) However it is prudent to take steps to minimise risks, especially financial ones.
The greatest difficulty all ‘start up’ businesses face is lack of seed funding to commence. Work out what the minimum capital is you require to get the business started; then work out how long you think it will take before you will make a profit; also decide how you will access start up capital (loan, use savings, part time work to support the business etc.)
I have known successful business operators commence with $500 on bank card! Many people commence a home based business (HBB) because of the lower setting up costs and most of them carefully consider alternative funding. It doesn’t matter what type of business you have or what size Micro or HBB you have, lack of finance, lack of financial controls, and lack of cash flow will be the most common problems you face.
Ways that operators can (and do) finance their business are varied.
* Employment - Take on outside employment to fund your business at its start up level.
* Savings - If you are fortunate enough to have such resources, it is still imperative that you have a plan in place.
* Bricks ‘n Mortar - Many businesses get finance from banks through a line of credit based on the collateral in their home.
* Banks - The most successful way to utilise banks to assist you, is through a credit card, as long as you can pay it in full within the specified credit terms.
* Partners - Even though this can be a good solution, it is also fraught with danger and often results in ‘falling out’ with the eventual collapse of both the business and the friendship.
* Venture Capital - For someone to invest in your business, they will want to make a profit and will be looking to invest in the realm of $250,000.
* Loans - If a relative or friend assists you to get started by advancing you a loan, be professional and ensure you know what interest they charge and how long you have to pay it back.
* Equity Partners - A loan from an equity partner usually does not have to be repaid, unless the business is wound up or sold.
Once you have decided how to fund your business you must also be able to keep the cash ‘flowing’. It is not so much that poor profit will send a business under, it is more likely to be poor costing and lack of cash flow. It is essential to keep an accurate set of books to help minimise the risk. Remember - keeping accurate books can help you keep your money
Costing must be accurate too. If you are in a service industry hourly rates charged may appear high, as they have to cover non-billable hours, overheads and billable hours. The biggest mistake made in costing a manufacturing business is inaccurate (or simply forgotten) overheads.
Make sure your trading terms are in writing and that customers are given a copy. Take the time to explain the terms to them – you do not want to be in a position later of a customer saying “Oh I remember something being handed to me – but I never got around to reading it – or I didn’t understand it”.
If you do not have bookkeeping or accounting skills – then ensure you engage the services of both. But don’t use the accountant to do simple bookkeeping tasks – you will pay through the nose if you do. I uniquely solved this problem (as I am not good with numbers) – and don’t necessarily recommend it - I have been married twice and they were both accountants!
******************************************************************
Barbara Gabogrecan has dedicated the last 10 years to supporting the Micro & HBB sector. She is an author, artist & entrepreneur. You can access her FREE e-book ‘How to Fund Your Business!” full of tips and hints on how to finance your business and keep in the black - by going to bottom of the home page on htpp://www.micronavigator.com.au.
Dont Fret About Financing Your Business - To learn more about this author, visit Barbara Gabogrecan's Website.
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David BarrDavid Barr is the President of Venture Opportunities, Inc. David has been a professional business broker/intermediary since 1980 focusing on General Business Brokerage and Mergers and Acquisitions representing client transaction value from $400,000 to $20,000,000. Mr. Barr has handled the sale of over four hundred and fifty companies. David earned a university degree from the State University of New York majoring in economics and business. David holds the Mergers and Acquisition Master Intermediary and the Certified Business Intermediary designations from the International Business Brokers Association. He is also a Senior Business Analyst and a Texas licensed Real Estate Agent. For more information about David and Venture Opportunities, visit www.bizdealmaker.com. - Visit David Barr's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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Jeff FosterWebBizIdeas.com is a Minneapolis website design company founded to help people start an internet business by providing them with website, business, and internet resources that help foster the growth of successful online businesses and develop innovative Internet business ideas. We specialize in internet consulting & internet marketing. - Visit Jeff Foster's Website |
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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