Business Funding for Startups. I’ll answer,
- How to manage Business funding?
- What are sources to get funding?
- What is Alternative option?
I’m telling you an incident of Iyer.
Iyer wants to start a new shop of Children’s wear in New Delhi. He is counting his costs to start a shop. He found a Shop which is 900k [rupees] for Buy& 11k for rent per month. And Maintenance is around 3k per month. Basic Shopping for clothes is about 30k including some rented goods. This is a production cost, which is about 1Million Rupees. And after adding Marketing, Supplying& all additional costs, It would be around 1.09Million. Which is very big amount.
To manage his funding, what should he do?
- Crowdfunding [ ].
- Find an Investor [ ].
- Get a Loan [ ].
- Manage Production costs& Restart with new strategy[ ].
- Think about other options[ ].
- Other[ ].
That box fields are Empty because you have to Decide which one is better. None is too bad, see all sides..all are black And white. If you don’t Understand Any of this, then you should not worry because We are going to see Exact meaning of Each. Also at last, I will share you To-Do list. I hope you Remember those 3 questions of Starting of Blog, Let’s see all.[NOTE:-If you want to listen this blog content ,click on the Sound button .And if you want to read this blog in your language click on the choose your language button( scroll up-top right of this page.)]
How to Manage Business Funding
For a New business Money can be at Centre issue for Success. So, it is good to know How much you money you will need& How to get money. This Question includes 2 Portions.
- Calculating Costs.
- Managing Funds.
1. Calculating Your Costs
You need to manage your business funds. For this, 1st you need to Calculate your costs. So, you can know how much fund you need. Calculate from setting up to selling costs. Now, I’m teaching you How to calculate it.
We are calculating your costs. A key to estimating costs is being Organized. So Arrange or Purchase a spreadsheet or any Budgeting software& Get ready to create a clear picture of your Finance. Count with me.
Start by listing some items most businesses need. Here is normal list, count how much it will cost.
- office space.
- Desk& pens.
- Electricity& Heating.
- Communication equipments.
- Any necessary licenses, permits or insurance.
- Account for paying employees& outside consultants like lawyers, accountants& yourself also.
- Loan, Investment and taxes [if needed].
- Marketing, Advertising including market research.
- Ad space& website.
Tip:- Once you’ve accounted for standard expenses, Add in items that are Unique to your business. For ex.These could be Iyer a children’s wear shop owner offers Free Hairstyle coupon or Game Link for Desired amount of buy.
2. Managing your Fund
Let’s try to manage it. Now you have a big list of expenses& some costs that go along with them. It’s time for fun part: MATH. We will try to manage this problem Mathematically. Count with me..its not hard!
1st Note which Expenses will be 1time costs. These are typically the Initial costs needed to start or grow your business, whether its buying major equipment, designing, a logo or paying for a permit that lets you open your store. The rest of your costs are repeating expenses. So, these will generally help you to sustain your business.
You should Include things like salaries, rent& utility bills. Calculate how much each of these will cost you over 1month, 1year& 5years. Add up your total expenses to see How much money you’ll need& when you’ll need it. Make separate calculations for monthly costs, annual expenses& 5years budget.
A Tip:- Give yourself some Extra space. In case your actual costs are higher than expected. You don’t want your plans to be ruined just because the price Spiked on an item you needed at the last minute.
–Now you’ve also figured out your costs. You exactly know how much do you need. Now I’m giving you How to get funds which are actual source of business funding for startups.
What are sources to get Funding?
Once you’ve an Idea How much funding you’ll need, its time to figure out which source is better for you. Now I’m showing you some ways, Think which way is good for you. I will say meaning, plus& minus points basically. Also provide you link if needed. So, let’s start.
Bootstrapping means self-funding. It is a good option if you’re able to afford it. If you have a small budget then self-funding is better option. Most of people consider it as the safest way. And it is safe in real also. Biggest benefit of it is, you can have complete control over your business. Because, in most of other ways, you may have loss some control. The downside of it is, you’re only responsible for all your risks. So, Do not spend more than you can afford easily.
You can check about How to grow Local Business:11steps. Now let’s talk about another way to business funding for startups.
Trouble is where you spend wrong, not where you spend less.
It’s based upon Investors. Venture capital is like you give me money to buy a juicer& then you get 1out of every 10 juice-glass I make. With venture capital, investors usually offer funding in exchange for ownership shares& active roles in a company. Primary advantage of venture capital is you get financial ability that would not be possible through loans or any other methods. The Downside of it is lose of control. You may lose some control over your business due to venture capital. Although which is depended on investors.
Tip:- You need to show your business has bright future to get Fund from venture capital. Here is the Top10 Venture capital sites by Traffic.
You can know meaning by its name. If you want to keep control on your business& also want a nice Funding, then you can turn to a Platform that allows you to Crowdfund. Crowdfunding is a way to raise money from large number of people. Crowdfunding usually involves collecting lots of small sums From potential customers, your social network, friends& family. These supporters aren’t technically investors since there’s no Financial return. So, In return they generally get gifts but you can also offer them Discounts or Meeting with some company leaders Etc.
Be aware with all sides of contract.
Since Supporters aren’t owed money, Crowdfunding can present a pretty safe option for business. And benefit is if your project fails in the long term, you don’t need to repay anyone. But, you’ve to be success, so make best strategy. Though, the best way is you can get connected with me! Yes, This is my program. I’ll meet you there.
Tip:- Since Every crowdfunding platform is different, make sure to read any fine print carefully and understand your full financial& legal obligations.
Top Crowdfunding sites for startups in 2020
For women- iFundWomen.
Best for charity- gofundme.
For B2C- CircleUp.
Flat-Free option- Fundable.
Here’s the Link of All these Sites. Also More sites to Explore. See it Digitally. Now let’s see another option to get business funding for startups.
Honestly I ain’t expert in these loans and banking etc. But I am sharing what I learnt& what I know. Bank will offer Startup Loans to qualified business. But you’ll be taking on debt. So, you should be ready to make regular payments. You need to feel them confident, that you’ve high chances for success. So You’ll be able to pay them back. But, You should have proper plan and strategy before you get a loan. As I know, There are some kind of Loans like Microloans, Online loans Etc. You can Google about these programs.
Stop getting into Needless debt.
What is an Alternative option for big Business funding ?
Have you ever thought How much your startup will cost? How much Funds you need? Suppose, If you Get Failure, Have you thought what will you do? 1decision can change your Life. And its in your hand to take a wise decision.
Is there any option, that can cost so least& give you more opportunities& facilities? Ans. is Yes! Answer and Alternative Option is Digital. It is the best option in current situation. Even if you are thinking to start a business, you should start on Digital platform. Now, I tell you some basic benefits of starting-up by digital.
1st play Trial ball. [Digital platform offers you.]
What are benefits of going Digital?
- Digital platform is Global platform with Worldwide audience& outstanding opportunities.
- By Digital, Budget will be mostly 20x time lower. Suppose if your store takes 1million to develop and start selling, your E-store will just cost around 20k.
- You will learn mostly all the things, you learn with traditional shop.
- You won’t loss much if your E-startup fails because you can also do much with your E-shops and these knowledge. I can say it has lower chances to fail.
- The Best benefit is You will learn Digital Marketing. It is Future and present also!
My Tip for the blog
Make sure, you have the best goal& strategy. Before getting any kind of Funding, do recheck your Plan. If you have backup plans, forward plans with mostly all possibilities, then you should go further. I can say If you need too much money to start a business, then you’ve either No or Bad Plan. So, Make a plan& Go for it!
- Make sure you have proper strategy.
- Count your costs.
- Separate 1time& repeating costs.
- Plan monthly, yearly& 5yrs expenses.
- Figure out which type of funding suits you.
- Be aware of all the legal obligations& risks of any Funding you choose.
- If you are a starter, choose Digital 1st.
- You need Best vision, Apply to Join strategic guide Trial.
So Friends, Today we learnt about Business funding for startups. And I hope you get some knowledge. Its Enough for the week. See you next week!
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