Whether you have just set out on your journey through the world of business or you are an established player within your niche, maintaining appropriate levels of funding will be at the heart of your business plans. It is wise to not rely on just one source of funding but to cast your net far and wide. Should one source of financing become unreliable, there will be others that you can fall back on.
Less mythical than they might sound, business angels are increasing in popularity as a source of corporate funding. Not only do they invest money in a business that they feel has the potential to provide them with solid returns on their investment, but they will also invest their business acumen and knowledge. Some act as mentors, others allow more autonomy. Either way, this funding option has obvious benefits for you personally as well as your business.
If you are less inclined to have an angel swoop into your business, you could secure funding using your invoices. Debtor factoring involves a specialist company who, for a small fee, purchase your invoices from you. That means there is no more waiting around for thirty days for the invoices to be paid and you can ensure your cash flow remains buoyant at all times.
Bank loans are the most traditional route for entrepreneurs to secure funding for their business. You will need a well-constructed business plan with financial forecasts. You may need to present this plan to managers at the bank. They are investing in you, not just your business so ensure you are articulate, professional and can answer any questions that they might have.
Loans don’t necessarily have to come from banks. Family and friends can be reliable sources of finance. When undertaking a loan with a family member or a friend, you should conduct yourself as you would with the bank. That means contracts are drawn up, and fair terms, conditions, and timescales for repayments are agreed.
Crowdfunding has become a bit of a buzzword in recent years and, given the right marketing, can be a source of lucrative funding. Vast swathes of people who like your business idea will raise money to allow your business to grow. For this route to be viable your business needs to give something back, whether this is donations to charity, recycling the waste generated through your business or even building a school in Uganda with a proportion of your profits.
It goes without saying that you should be investing your own money into your own business. It doesn’t fill your potential business angel or bank manager with confidence if, when asked, you state that you haven’t invested a single penny. They will see you and your business as a liability and walk away. If running your own business is something you are genuinely passionate about then you need to show it. That shiny red convertible on your driveway is stunning, but it’s time to sell it if your business needs a cash injection.
With these funding options at your disposal, financial success for your business has never been more attainable.