One of the first hurdles encountered by small businesses is that of funding. What is the right type of funding, how much do I need, and how do I secure it? What are my options? What should I do with the money I secure? These are questions that are not easily answered, as they depend on the type and situation of the business in question, but here are some guiding questions to consider when thinking about funding for business:
- Are you practising good credit control?
Practising good credit control is one of the most important components of cash flow in a business. When met with cash flow problems, it may seem like the best option is to use credit cards, but these cards will rack up interest and debt, which can cause more cash flow problems in the future. Try to maintain complete control over your credit use and be prepared if cash flow problems occur.
- Is your business ready for your tax bill?
Many businesses feel inclined to spend all the money they are met with in the first year, but they may forget that a tax bill will likely be waiting for them at the end of the year. Make sure your business has set enough money aside to cover that bill. Large and unprepared for tax bills can significantly harm a business.
- Have you included a salary for yourself in your expense plan?
You do a lot of work for your business, and you need a salary too. Make sure you have included a modest salary within your expense plan so that you can rest easy as well.
- Do you have an accounting system in place?
Accounting and reporting systems are crucial in managing your business; your systems should have records and up-to-date business data so that you can give banks, lenders, financiers, and government entities any information they need so you can continually prove that you are trustworthy and worth their time and money. Demonstrate your capabilities in business management by maintaining an updated business strategy plan and financial objectives so that you can secure the funding you need.
- Do you have a good relationship with your bank?
Banks exist in a field of constant lending and service, and they want a strong customer base so that they can protect themselves. By showing your capacity as a reliable lender on your current loans, it may be easier to secure financing in the future.
- Have you applied to government-sponsored programs?
Many governments provide sponsored lending programs and grants designed to encourage small business ownership, but many eligible businesses have not applied to these programs and are missing out on valuable benefits. See what is available to your business before you look for external financing.
Funding your business is difficult, but having the right person by your side makes it much easier. Reach out today and we will help you find the perfect financing that will help your business be successful!