Every Business Needs Solid Finance Behind it
It’s easier than ever to start a business in the online era. But you still need a solid financial basis to thrive in the long term.
There is so much said and written about how easy it is to start up a new business these days that it is easy to underestimate just how much of an undertaking it really is. Sure, more new startups are launching every week, but how many of them will still be around in one, two or five years?
The answer to that question varies depending on whom you ask, and could be as low as 15 percent or as high as 60 percent. But one thing is obvious to business finance brokers in Chelmsford, the heartland of Essex small businesses. This is that regardless of the sector or the business model, a solid financial footing is vital to secure the long term sustainability of the business.
It sounds easy if you say it quickly enough, but how can you make it happen? Here are five steps towards getting the funding you need, whether you are looking to launch from scratch or seeking to take your burgeoning small business to the next step in its evolution.
Understand your starting point
Whether you’re playing the stock market, backing a horse or investing in a business, you are taking something of a gamble. The golden rule of gamblers is only to lay down what they can afford to lose. Be honest with yourself and conduct a proper audit of your assets and liabilities. That way you know exactly what you can afford to put into the business yourself before seeking to raise the balance. It might seem obvious, but you would be amazed at how many entrepreneurs omit this essential first step.
Explore personal options
If you’re going to be a successful entrepreneur, you can’t dodge the most sensible and pragmatic business options because you are shy or embarrassed. Lots of successful businesses would never have come into being without the financial support of family and friends. So take a crash course in humility and ask if your brother, your mother or your old school buddy can help out. Some people worry that borrowing money in this way can lead to damaged relationships. The best way to avoid that eventuality is to keep it business-like and draw up a formal loan agreement.
Choose the right lender for you
Only now should you venture into the world of startup loans, venture capitalists, crowdfunding and all those other exciting financial options you have heard about. There is no “best way” here, all have their own pros and cons, and the most appropriate choice very much depends on you and your business. If you are a small-scale start up who has never run a business before, the VCs are unlikely to be interested, so don’t even go there. If you have a less than perfect credit history, this will also narrow down your choices.
The most important step you can take at this point is to sit down with a financial advisor. Describe your past, present and future, and you will get a run down of the different finance providers available. From there, the decision will almost make itself.