partners for life
How can you raise capital for YOUR business?
Money. One of the most prominent reasons people start their own small business is to earn more, and have greater control over it. However, raising capital to invest back into your business can be far easier said than done. It takes research, patience, expertise in your own space, and a certain amount of willingness to take on risk if you want to be successful in enhancing the amount of cash available to you.
Private equity and seed funding are options available to people with access to those with great wealth or borrowing power, who can then invest in your small business. Importantly, you should find investment from people who share the vision for your business, and are willing to ride the bumps that most go through. The ultimate private investor is one who has some semblance of experience within the industry you operate, and can therefore operate as an advisor and sounding board. This is in the best interests of both parties, because you as the business owner can receive timely and knowledgeable advice, and the investor can help to influence decisions which ultimately can lead to a better return on their investment. It should be noted, however, that investment carries certain risks, and often involves giving up a share in your enterprise. These risks should be clear in the terms agreed between a business owner and potential investor to ensure both parties are happy.
Mergers and Partnerships
As is the case with many things in life, you are often not alone in business cash flow struggles. A lack of capital is something that can affect multiple small businesses within the same industry, and can potentially be addressed with a merger or partnership. Joining forces with a similar business opens up each entity to the market and client base of the other, while also affording both parties to leverage ideas, experiences and other business tools off one another. Working together in the same premises is an example of raising capital, as it can allow the money from the sale of one location to be re-invested into the new partnership. Embarking on such a venture is certainly not one that should be taken on lightly, but remains a viable option for some people who wish to unlock the potential in their own business as well as someone else’s, for the benefit of both
Good old-fashioned saving is perhaps a deceptively simple method for raising capital within a business. It certainly isn’t the first thing that would spring to mind when looking to obtain more cash, but is a proven way to raise money with little to no risk. It involves no debt, partnerships or involvement from outside sources of any kind, and therefore puts all the responsibility (and benefits) in the hands of the person running the business. Also, you don’t need to dilute your equity or take on any interest repayments, whilst developing your business on more solid foundations. Even simple measures like spending less of your revenue outside of the business can make a difference over time.
Getting the flow of money going in your enterprise is a great habit to get into, and paves the way for sustainable and prosperous business growth. Reaping the benefits of the hard work that goes into it is not only financially rewarding, but solidifies the reason many people have for getting into their own business in the first place – more money.
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