A small business is truly an extension of yourself. It’s your unique idea that has come to life and is trying to make the world a better place. On top of this comes the multitude of exciting things that could be competing with your rivals to show consumers you have a better product or service, finding ways to make the most money but keep quality assurance high as possible and of course, one day expanding to become a powerful entity in of yourself. However, what comes before all of that is the need to be financially prepared. This is the long journey that every single person must take before they start their own business for good, and make sure it can last beyond the critical first year. Unfortunately, even though there are many books out there that tell you how to set up a business, there aren’t many that dive into detail of what you should be doing before you open the doors to your small business. There are many paths to the same goal, but there are some more prevalent and important that you can look into that may help you find a way.
Photo by Free-Photos
Can you assign collateral
If you’re truly serious about setting up a business, you need to have an emergency and large funds available just in case your main source runs dry. It’s a tough and morbid task, but you must go through it, and that is, assigning things in your life that you could do without. Should you not find investment large enough, or simply can’t find anyone that will not put in as much as you do, then you need to make a list of the items and possibly property that could fund your business. Sit down, and on a clear day where you will have no distractions, write out the things in your home that you are willing to sell, should the road to success get a little bumpy. Make two categories, which divide your major collateral assets, and your pure consumer goods and items that aren’t detrimental to your living standard. The latter is quite easy to make up once you get the hang of it, but your major assets are where it gets serious. Your house, car, and potential savings in your bank should be placed in this category, whereby you are ready to use to help your business get off the ground. Granted it’s a very serious move, but if you want your passion to be a reality, tough choices will need to be made.
Carefully make a budget
Budgeting your small business is not as complicated as it first might seem. Although larger businesses have to worry about external issues, such as satisfying shareholders and fighting in the courts for legal superiorities with their largest rival, a small business does not. What your task should be is to plan for the next year, and nothing more so far. Clearly define your largest expenditures, which will more than likely fall under paying salaries, and paying for advertisements. Lesser expenditures will be making the products and services, which will need to be calculated per unit. This may vary with regards to your distributor and manufacturing supplier. It’s much easier to plan out your budget when you have a plan for each financial quarter. When you can, you clearly plan out what your goals will be, and the timeframe in which you wish to achieve them, the demands of funds and the list of priorities will grow and formulate.
Image by Nick Youngson
Generating the funds
No business can live on your own funds alone unless you’re incredibly rich. There are lots of ways to get the funds you need for your operations. You may want to look into the independent investor path. You’re more than likely going to be dealing with someone on a one-on-one basis. They will have their personal expectations of what you need to return to them with regards to profits; however, there’s more of a human element involved whereby the relationship can be very flexible and lenient. However, if you’re confident in your credit rating, and have saved up for a long time and or showed you’re responsible and trustworthy financially, you could get a loan from UnsecuredFinanceAustralia.com.au. An unsecured loan would mean that you’re going to be receiving a loan, purely based off of your credit score alone, without collateral being placed on the list of potential recuperation of money. Whether you need the money quickly for a new project and or expansion, you can get up to $5 – 300K. Unlike a bank that would possibly take a long time for approval, such companies will have a simple and quick process of application to start you on the road to fulfilling your dreams.
Save money where you can
Even before you get up and moving, update yourself on the latest techniques in your industry. Next technologies might initially seem more expensive and a little too much for a small business, but if you can speed up your business because of them, you’re saving time and therefore able to deal with more orders and customers. Equally, if you know somebody who can give you a cheaper material or supply than the industry experts, then always have them on your list of options. Saving money where you can, requires a savvy mind and a flourishing and ever-expanding network of contacts. Hindsight is a wonderful thing, but in business, it’s a case of ‘shoulda woulda, coulda’. Losing money due to practices that could otherwise be avoided, should be a thing of the past. If you can meet people in the same field as you, and mingle with other business experts at meetings such as business expos and other workshops before you commit, that could save you a lot of money. Write down any useful hints and advice for areas where you have the least knowledge to help you avoid pitfalls.
Being ready to financially support your business is a long and open road. You could take many different turns to get to your goal, but there is always a clear marrow that runs through the planning stages. Be meticulous, and always take on board as much information you can, and be ready to make sacrifices to prop up your business if no one else will.
If you like what you’ve read here, please let others know of this post, blog, and site.
And thanks for reading! 🙂