How Will You Finance Your Business

How Will You Finance Your Business

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Business Plan Guide Article No. 12

How will you finance your business?

What a great question! So this is the last section of the Business Plan Guide, and we have talked a lot about planning and strategy, so by now a business is planned out and organized, but then reality steps in… financing this business. Finding the funds to start a business is not easy. One may have funds from personal savings, gifts, or selling off personal belongings. The rough part is getting investors. Even if one starts a corporation, there still needs to be an investor who is willing to buy the stock.

This is where a solid and concrete business plan steps in. Investors will want to know the product, the plan to sell the product, production methods, growth plans, and everything that investors will need to know to feel confident they will see a return.

There are many forms of getting funds to start a business. There is the classic small business loan, which is paid back with interest. Of course the lender will want to see the business plan and assess whether business operations will return large enough profits to pay the loan back with interest. There are firms that’ll invest in startups by purchasing some or all of the initial stock. Some firms will ask for some type of ownership or portion of profits.

The big picture to consider when financing a business is whether the debt is worth the work; meaning, is the amount of expected profit worth the risk of the debt? Keeping $1 for every one million earned for 20 years, probably won’t be worth it. That’s an extreme and obvious case, but let’s consider Amazon.com. The original business idea was highly criticized, and few had the confidence that the business would be able to repay the enormous startup cost. It still holds one of the largest startup costs ever in history. Well, Amazon.com has proven itself more than just a little. The thing about Amazon.com is that there was a plan, and that plan and strategy was assessed against it giant startup cost, which proved to be rewarding. Most likely anyone reading this article isn’t looking into a startup cost like that of Amazon.com; if you are, I want in; but no matter how a business will finance its startup costs and no matter the size, it doesn’t make sense to go into business for the mere “pleasure” of being in debt. We all know there is no pleasure in debt.

Well, this is the last section of the Business Plan Guide. If the entire guide was read, it is greatly appreciated. If only some sections were read, well… it is still appreciated. The big idea to take away from these articles is plan, strategize, and persist. It isn’t easy to run a business. It’s actually very challenging and difficult to endure. That’s why more than 95% of startups go out of business, but there is still the percent that don’t go out of business, and that’s the percent one should focus on and aim for. Anyone can start a business, but it takes a lot to run a business! It is an adventure worth living. Consider our article on The Advantages and Disadvantages of Self-Employment. Looking at the number of Disadvantages far outweighs the number of Advantages, but the one Advantage that takes the lead is how amazing it is to create something and watch it work! The most amazing part is watching that creation impact human lives and help contribute to a better life and better world. Good luck and do more than great… be amazing!

Wishing you much luck and a whole lot of success,

Sergio with the iBrand Your Business Team

Business Plan Guide

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