Published on September 10th, 2015 | by Falcon0
Advice for gathering finance for your new business
A new business endeavour is a serious financial undertaking, no matter what type of business you are trying to create. Finding the capital to start your business can be stressful. Here are some tips for finding the financial means to get your business off the ground and running.
Many businesses start out with investment from friends and family. Alternatives include bank loans. Having family and friends as investors can work out well, but you need to be sure they are very aware of risks. If you happen to fail and lose their investment, sometimes there can be damage to your relationship. A bank loan can be very hard to get, at any rate, for a first-time business owner, especially if they have no collateral. Investment holding companies such as M1 Group are always looking for promising new or emerging businesses to invest in. They have a wide range of clients. With a holding company, you have the advantage of being able to get capital from many sources, while the investors themselves enjoy a reduced level of risk because it is spread out over so many investors.
Have a solid business plan
Nothing sends up a red flag to investors like an entrepreneur with no serious business plan. You and your partners need to know as much as possible about the business you are trying to create. Questions from investors can be tough, and there can be a lot of them, so you need to be prepared. A business plan takes time to create and familiarize yourself with, so make sure that you spend a lot of time on it before meeting with any investors. Several months ahead of time is the bare minimum for starting the process. This gives you plenty of time to work out any problems and think long and hard about your strategy and pitch. If your writing skills are not strong, then you should consider hiring and working with a writer with experience in putting together business plans.
Start out small
Going too large too fast can be detrimental to any business. Starting out smaller gives your business time to get a feel for your industry and the demand for your product or services. Going big suddenly can lead to financial troubles, because you have too much invested at a time when cash flow can be uncertain or low. Najib Mikati and his brother Taha are examples of successful businessmen that started out with a small construction firm before branching out and growing their business and investments. This business sense led to the creation of M1 Holding Company and their vast portfolio of investments in a wide range of sectors.
Take your time
While it is true that some businesses are timely, if you rush, you risk making more mistakes or not finding the right people to work with and for you. Getting a business up and running takes time, dedication, and hard work, but it is worth it to achieve your dream.