Funding is an important aspect of business and startup. It is a fundamental part of the company’s process and often the difference between a successful business and a failed one. The key to funding is to find the right partner that will provide you with the right type of support that you need to achieve your goals. Although there are many ways in which businesses can be financed, here are some tips on how to go about finding the best possible method for your business:
Create a plan first before looking for funding.
Your plan should detail your business ideas as well as what you need from any financing source you might be considering. This way, you can create a spreadsheet that will outline all aspects of your startup business. It should include things such as capital required, start-up costs, monthly costs, revenue targets, profit targets etc. Once you have created this spreadsheet, it is important that you run through it so that it is 100% accurate, so that if any part of your plan changes, you can adjust your funding source accordingly.
Refine your business plan.
Investors will be looking for a well-rounded business plan that will give them a good idea of what it can offer. If you have a solid business plan, then this will increase your chances of being accepted by an investor. The plan should include a description of your company, your product or service, who you are and what you do. It should also include financial information such as the amount of capital required, how much it will cost to start up and what your expected turnover is going to be.
Research all possible funding sources.
In order to make sure that you are fully prepared for any potential funding sources, you might need to research them thoroughly. Start by looking at local government grants and, if these don’t fit in with your business, then move on to other sources, such as banks and loan companies or venture capitalists. You can also consider angel investors and funds from your friends and family.
Manage your personal credit score.
When you are seeking funding, you need to make sure that your personal credit score is high enough to get approved for the funding you require. This is especially important if you are looking for funding from a venture capitalist. In order to achieve this, it is important that you start paying off all your debts and any other credit cards that have been running up debt on them. If you have a good credit score, then you will be able to get the funding you need in order to start your business.
Hone your skills and knowledge of your business.
You should also be well-versed in your business ideas. If you are looking for funding from a venture capitalist, then you will need to have some knowledge about the sector in which you are operating. This is because they will want to know what you can offer them. If you manage to convince them that you know what you’re doing and that you are the right person for the job, then they will be more likely to fund you, because you have proved to be an expert at what you do.
Think about the return on investment (ROI).
ROI is a very important aspect of any funding source. The amount of money that an investor will receive for their investment will be directly proportional to the ROI they will receive from the company. This means that the more money that you will make for them, the more money they will invest in your business. So think about what your potential funding source wants and how much you are going to earn from them. If you can show them how much they are going to earn from your business, then this should increase your chances of being accepted by them as a business partner.
Finding the right funding source for your business is a difficult task. It is important that you do your research and make sure that you have everything in place before you approach any potential funding sources. The tips provided above should help you with this task.
About the Author
I am the Founder of Cudy Technologies (www.cudy.co), a full-stack EdTech startup helping teachers and students learn better. I am also a mentor and angel investor in other Startups of my other interests (Proptech, Fintech, HRtech, Ride-hailing, C2C marketplaces, and SaaS). You can also find me on Cudy for early-stage Startup Founder mentorship and advice.
You can connect with me on Linkedin (https://www.linkedin.com/in/alexanderlhk) and let me know that you are a reader of my Medium posts in your invitation message.