[This article was written by Rachelle Wilber.]
The secret to building any business is in the finances. Nothing will cause a company to crash and burn faster than lacking funds. For this reason, savvy business owners must take measures to ensure their company begins with a solid financial backing and continues to remain financially stable. The following are four ways entrepreneurs are creating financially stable companies from day one.
Developing a Solid Business Plan
One of the primary reason entrepreneurs put a business plan together is to answer the question of where the money is coming from to fund their business. When a business-owner knows what funding sources are available to them, this takes the guess work out of having to scramble to find funding sources when money runs thin. Entrepreneurs who do this research well in advance tend to find that there are numerous funding sources they can appeal to when the need for capital arises.
Business Loans and Vendor Credit
When it comes to generating initial capital for opening a business, new business-owners are often dependent on leveraging other people’s money (OPM). This is done by taking out business loans with the Small Business Administration (SBA) or other loan agencies that help businesses become financially grounded. Even vendors help upstarts by extending them lines of credit to cover the costs associated with products and supplies entrepreneurs need to hit the ground running.
If an entrepreneur has difficulty acquiring the business funds they need through banks and lending institutions, then angel investors can be a huge part of making a business financially viable. An angel investor will want to exchange their money for a stake in the company they are investing in to earn a return on their investment. This means you must be able to convince an angel investor that your business is based in a solid, proven idea from the very start to acquire funding through angel investors.
Many successful businesses have obtained huge financial support through crowdfunding. It is important to use best practices crowdfunding to repeat these kinds of successes. Having a clearly defined goal, telling an inspiring story, involving people through social media, developing a website that represents the business’s brand in all its glory and keeping donors up to date on how their money is being put to good use are just some of the ways business-owners have acquired massive funding for their new upstart.
When a business receives the funds they need to be financially viable from the start, the drive to locate and acquire funding does not end there. Savvy business owners are always seeking out deep pockets to fund their business’s present and future needs. The important thing to remember is that new sources of funding provide capital that can be used as leverage to acquire and generate even more money. So, the sky is the limit when it comes to how much creative business funding a clever entrepreneur can access if they really use their head.
Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and Facebook: @RachelleWilber; https://www.facebook.com/profile.php?id=100009221637700