It is only understandable that first-time business owners will have many questions like where do I get more funding? What is contract management? How do I make sure my company survives? It is encouraged as it would be much more problematic if company owners do not ask questions. Not asking enough questions is a sign of arrogance and over-confidence which might bring their downfall. Many reports that managing a business is a humbling experience.
Managing a business venture is extremely challenging, especially if you are doing it for the first time. There is also the added pressure of making it past the first couple of years. Statistics, unfortunately, is not on your side as reports claim that over 90% of all startup businesses fail.
On top of that, the global market, for a long time now, has been in a precarious place. A single traumatic event can disturb the status quo and plunge a nation into recession. A recent example would be when the housing bubble of the US burst, rendering the country lopsided for a time.
Funding is one of the essential parts of starting a business. Money is required to operate a business, and without it, there is no viable way for your company to survive, much less succeed. It goes without saying that these funds, regardless of where it came from, must be appropriately managed. Tracking your cash flows will give you an insight on just how much you spend on things and where you should cut back.
Below I’ve listed down some of the best sources of funds for startup businesses.
If you’ve saved up quite a bit from your 9-to-5 corporate job, then you can easily use these as funds for your business. Using your own personal money can be quite problematic for some, while others find it better than asking others for funds. The main benefit of using private funds is that you won’t be indebted to anyone and can thus make executive decisions without thinking of others.
Another common way of getting funds for a business is through personal loans from affluent family members and friends. If you don’t mind being indebted to someone you’re close to, then this is the way to go. The best thing here is that no loan interest will eat away at your revenues. At the same time, bank loans and venture capitalists will need a good credit history which you may not currently have.
Taking a bank loan is the most reliable and common way of getting a business started. While banks are the best way of getting a large amount of money quickly, there is a catch. Loan interest can be quite high, so you need to pay off the loan as fast as possible.
Likewise, there is added pressure for the business to succeed as your own personal name and assets are on the line. It would also be hard to get a second bank loan should your first one burn to the ground. Note that a good credit score is required for the bank to approve your loan.
If you think that your product is one of those that will catch on with the masses, then crowdfunding is your best bet. Currently, there are dozens of websites offering crowdfunding options for visionaries to ask money so that they can start their business venture. You can quickly start a crowdfunding campaign with GoFundMe, Kickstarter, or even go to Shark Tank.
Venture capitalists are private individuals that provide capital to companies whom they think has high growth potential. In exchange, companies provide VCs equity stakes or company shares. The problem with this setup is that most startup owners complain that VCs almost always try to dominate their business, making it hard for them to make executive decisions.
Just looking for an entity to fund your business can be difficult, especially for first-timers. This is why it would be deplorable for the venture to fail after all the effort that you went through. One way of ensuring that your company does not become part of the 90% demographic is by integrating contract management software into your business operations. A contract management software will provide you with full visibility of your contract metadata, ensure that all of your contractors perform as agreed upon, and guarantee strict compliance.