Now, funding your business can be made simpler and efficient with these outstanding ideas provided in this post. Let whatever niche does your business fall under, funding is the key for every single business operation and this is where even powerful entrepreneur becomes clueless. Every entrepreneur will work on the goal to become successful and renowned businessmen, however not many are really making it up, mainly because of the funding issues. In case if you find yourself or someone you know in such a situation, this amazing post will certainly be a worth a read for you!
Funding start-ups are quite ambiguous and it is very challenging to find a reputed funder to assist in your business operations. No matter how big or small your start-up might be, research study and ground analysis before commencing a business is the key to find a proper funder to provide a source of money for developing your start-up firm. There is no doubt that some entrepreneurs who are business experts today might have found difficulties in finding funding sources in the beginning.
Well, discussed below are the 5 smart funding tips for aspiring and potential start-ups to operate a successful business.
1. Preparing Your Portfolio
You have to prepare a portfolio that will speak for yourself. A professional portfolio must be prepared after detailed market research, preferably by a team of researching experts. In order to raise funds for your business, you will have to meet up reputed investors to whom your portfolio and your detailed business plan will matter more than what you explain at the moment. Of course, you have to have a clear understanding of your business and must be able to speak confidently for convincing an investor, but your portfolio comes first.
For being successful in your business and to attain all your business goals, you are left with no choice but to prepare a professional business plan with the guidance of experts and present it well to your target investors. A good portfolio increases your credibility and the trust in you. A proper business portfolio must include essentials such as business objective, business scope, business US, target group and revenue structure.
2. Gather Your Funds
No business can happen entirely from a single source of money, and it is mandatory to bring in few investors to gather the essential amount for your business operations, but the first step first! Gather your own sources of business funding as the initial amount. When saying gather your funds, it includes your personal amount, sources from friends and family or from your close circles and calculates them together. It will help in deciding that how much amount you might need from investors and you can pitch them accordingly. This will help you ask for the right amount of funding at the first go itself, and you will not end up facing a financial crisis for future business operations.
3. Have Alternate Funding Sources
In the initial phase of investors pitching, you might get several convincing answers from various investors, however, don’t just rely on one source but keep going ahead with your start-up proceedings. Always have a backup investor in line, as you might never know when an investor might show a red card to you. Therefore, never rely on a single funding source for your business venture, unless you get your money in hands. Also, trust only legal and registered funding sources, because borrowing funds from unregistered funding sources will end up your business and even your personal life on a trail. Let your main and alternate funding source be legal providers.
4. Credit Score
Whichever niche your business is, whether small business or big, maintaining a high credit score is very fundamental. Banks do not provide funding for any business without a proper credit score, and even several non-banking funding providers don’t do that. Maintaining a good credit score will help in getting quick approval for your loans and you can even negotiate on the interest rates with your banker, provided your scores are high. A good credit score can be obtained based on how promptly you make your payments for your credit cards. Well, do you already have a bad credit score? If so, then don’t go to banks and other funding providers without working on improving your credit score.
5. Licensing and Registrations
Business licensing is common for any business and almost every single legitimate entrepreneur will own a proper licensing. However, there are also several other permits that have to be obtained abiding by the local law and order of your state or region. Having all such permits and business license as well as legitimately adhering to the terms and conditions of the business law will help in getting sufficient funding for your business.
Be realistic in your funding plan, because how much ever you get today has to be repaid tomorrow. Just because you have found a good funding source and got your funding needs to be sanctioned by them, you shouldn’t borrow huge amounts beyond your needs.
There may be various sources such as personal equity, senior debt, non-banking funding providers, banking funder and several other sources. However, all you have to do is to be realistic in quoting your funding requirement. Being true to your business and true to your lenders will help in business growth. If you aspire yourself to become as successful as Mehul Panchal, a renowned entrepreneur in the filtration industry, these funding options will help you in becoming so! Good Luck!
Mehul Panchal, an entrepreneur, business adviser, mentor, speaker, writer, gym lover and tennis player. Also founder and Chief Managing Director of Filter Concept Pvt. Ltd. For more about me visit my website, Mehul Panchal