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Business Funding
/Financing is the course through which entrepreneurs arrange money for investment for business purposes. A investment can be used for starting a new business or to finance current activity in a business that’s already well on it’s way.  

There are 3 main purposes of financing:

  • Funding a business startup
  • Financing for growth and expansion of a business
  • Dealing with unforeseen financial encounters

Sources of Business Financing

  • Self-Funding
  • Giving up Equity
  • Debt
  • Business credit card use
  • Small Business Administration loans
  • Foreign investors
  • Crowdfunding /Selling shares of the business

Are Business Funding Rules Good or Bad?

If you ever turn to economics, accounting or managing the books in a business, there will probably be rules everywhere. Following rules in business are good for running a successful and growing business.

But, experience and personal forecasting and judgment matter quite a bit in making decisions for running a successful business and producing result oriented business operations.

If you ever ask a successful entrepreneur if he is a strict rule follower, the answer will be no. From a study conducted on a course of 30 years and on 12,686 Americans sample size, “Study finds successful entrepreneurs have brains and a history of risky behavior in their teens

7 Business Funding ‘Rules’ to break:


1.  
Think out of the shell. Be rebellious in nature. Being rebellious in business does not mean risking conflict in legal matters. It means to think out of the box. If the market is going down and the overall economy is falling, even then there is nothing bad in taking risks and facing challenges. But, be prepared and get ready before falling into any kind of new challenge. Introducing a product with better taste as demanded by customers in the previous survey can be risky but those who do not try new ventures, do not get new experiences and/or better outcomes.

2.  Be risky in business. If your current growth rate of business is not up to the mark, there is no harm in being risky and going over new horizons in business. Those who do not take risks do not reach to the skies. The large corporations that we now see often started with the least capital investment and a small sized business. Invest money in new ventures and put your efforts in fully. Even if the business goes into recession, it might rise again after using effective strategies.

3.  If you think your previous business history must be spotless in financial bookkeeping, then it is a wrong assumption. Investors are often not interested in previous failures, but they are interested in your new ideas and new business plans.

4.  It is not true that 100% of online lenders are spams or scams. Though many can be, not all are. There are registered tools to find and meet online lenders. Go for suitable interest rates and look at the time in which the loan has to be paid back.

5.  You must always have a confirmed and high-profit yielding business plan to meet lenders. This is again a wrong assumption. It can be true to some lender’s point of view. But, many are just available to lend money and receive it back with some interest.

6.  Do not go for too much loan just to show you need a huge investment capital for the business. This is not the right thing to do. Lenders often have no concern with how large your business is. They are lending money just to get more.

7.  Fail harder. There is no one in the world who never failed in his/her lifetime. Never fear failures. You fall and you rise again. That is the real success.

CONCLUSION

When studying business and financing, we are told thousands of rules during our whole coursework. Accounting consultants and economists are always explaining the rules to run a successful business with an upsurge growth. However, how to fund your business is not always by a perfectly rule-abiding procedure. Use skills, be risky, gather experience from the past, and be  ready to take challenges to ensure a successful business funding and growth.

Sometimes breaking the business funding rules ensures a better entrepreneurship than sticking to the rules as told by books.

Check out America's Best Bookkeepers

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

Idea Concept Light Bulb Crumpled Paper on Blackboard
If there is anything that worries entrepreneurs more, it is how to fund their start-up business venture. Having a unique idea and a perfect business plan in your pocket, only to find that you lack the capital investment to make it happen, is probably the most discouraging thing ever. There’s no secret formula that will magically create a stash of cash that can be used to kick-start your business operations. In order to fund your start-up, you have to accumulate capital from different sources. There are quite a few ways by which you can do it, but you need to predict the repercussions and have a backup plan before accumulating capital from different sources, as high interest rates can cripple your business and cause you to lose everything. 

Investors’ Perspectives on Whether or Not to Fund a Start-Up

On the other side of the story, private and public sector investors love to invest in projects and business ideas that they find interesting and profitable. In the initial phases of development, a start-up requires a lot of capital investment to establish different areas of the business. You cannot afford to have fewer resources, no matter what. Thus, you need to come up with a concrete plan on whether to pursue external help for funding or accumulate capital from private channels like friends and family. Typically speaking, established investors encourage entrepreneurs to find different funding channels in order to get the backing of strong, seasoned investors.

3 Most Reliable Ways to Fund a Start-Up

Self-Fund Your Business

According to surveys, more than 80% of start-ups are self-funded as this gives entrepreneurs more command and control over their business. However, you don’t necessarily have to fund your business entirely on your own. If your business idea is somewhat unique and you require some financial help from outside sources, investors can surely get things going. Although there are many multinational firms that invest in entrepreneurial business ideas, they will only be intrigued if they feel safe about the idea. That being said, personal financing and self-funding are the most widely used tools to fund start-ups of any scale.

Start an Online Crowdfunding Campaign

Investors love to take advantage of every opportunity at hand to double their investments and that’s the core reason why they are willing to fund a start-up. For that, they have developed strong platforms where they can learn of potential ideas of entrepreneurs, take an interest, and invest in them, if they feel sparkle in the idea. Therefore, if you have a perfect business idea and lack funding, you can launch a crowdfunding campaign to lure financiers, lenders, or even individuals who are ready to contribute money to help entrepreneurs establish a business.

Find and Apply For Venture-Capital Investors

Venture-capital investors are a group of financiers who are always in search of start-ups to fund. Most start-ups are in need of more capital, which is why looking for venture-capital investors for funding is so popular. The investors often have professional bookkeepers who properly maintain their financial books in order to determine if funding a certain start-up is a good idea or not. This indicates that bookkeeping is vitally important for any business to understand the precise equation and get a clear picture of finances from the very beginning.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Funding Your Business - Complete Controller

According to research, more than half of all entrepreneurial ventures close their operations within their first year. The shortage of funding options has been recognized as a significant contributor. The importance of cash cannot be denied for all kinds of businesses. Therefore, your priority should be to find the right channels for funding your business. Whether you are expanding your business or sustaining the current business model, you must have a consistent cash flow and an optimized strategy for acquiring financing.

Whatever your business needs may be, getting the money at the right time will exponentially enhance the chances of your business success. The use of innovative technology is encouraged among new businesses as they have to compete with other players who are already using it to significant effects. Here are some of the tips that will help you reach your potential.

Innovative Tips for Funding your Business Check out America's Best Bookkeepers
Bootstrapping

Bootstrapping, or self-funding is one of the most efficient and suggested means of funding a business. It is hard for new business owners to obtain capital as they are novel and may not have a financial history. Convincing someone to finance your business can be a tough job. Therefore, it could be better to save up enough money to start your own business.

Ask family and friends or find a potential partner who shares the same views as you. These are the people that you trust the most. Therefore, it’s wise to ask them first before looking at other options. You can put your idea out on the internet, find someone interested in your idea, and agree to finance or partner in your business. You can offer shares in the company for their investment. Bootstrapping also allows you to own your business from day one. Gathering and organizing all of your financial resources is key to bootstrapping and funding your business. Check out America's Best Bookkeepers

Crowdfunding

Crowdfunding is an innovative way of acquiring finances for businesses these days. The funds are collected and contributed by many people who are interested in your business idea. You set up a comprehensive narrative of your business plan on a crowdsourcing platform. The account contains all details about the potential business or project: its product offerings, goals, plans on making revenue, and many others. Visitors on these crowdsourcing websites make their judgments about the plan and decide to invest. They then become the stakeholders in the business with privileges.

Funding your business through crowdsourcing is an inordinate way to access capital and promote your business. It is like free marketing for your business, as everyone that sees your idea acts as a potential marketing tool. The response you receive shows if your business idea is sustainable and is going to attract an audience. Primarily, it offers you a broader viewpoint that can be utilized to formulate your future business strategy. Crowdfunding, however, is relatively competitive. To generate interest, you will have to come up with a good business plan. Check out America's Best Bookkeepers

Angel Investors

Angel investors are individuals with surplus cash and a profound interest in financing lucrative business ideas. They usually operate in groups as it narrows down the risk by sharing it with partners. These people are experienced businesspersons who are adept at what they do and have a keen eye for market trends and innovations. Alongside their resources, they offer mentoring and counsel to businesses, which is of enormous value based on years of experience.

Finding angel investors is an innovative option that has helped successful businesses today. They offer their capital and advice in return for a percentage of equity in the business. It is fundamentally a win/win condition for both, making it one of the most rewarding ways of funding your business.

Keynote

While the many financing options have made it easier than ever to get started, smart business owners should ask themselves how much monetary support they need before reaching any conclusions.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
accounting problems - Complete Controller

As a business owner, managing your finances should be the number one priority on your to-do list.  You have to focus on inventory, manage accounting and bookkeeping, and other financial tasks that are lying in front of you. But all these functions require clarity in your financial statements and bookkeeping records.

Delayed or missed entries in the business bookkeeping can pave a way to financial disaster and business failure. Building a clear picture of your financial health will contribute to business growth. If a business is ready-to-audit, it attracts investors. Check out America's Best Bookkeepers

Accounting Problems that can Sink your Funding

  1. You do not use an accounting software

Manual work is always the hardest and is at risk of errors. A small accounting error can lead to big losses in the business. An accounting software, according to your business size, is as important as funding your business. Small business owners can also get specific software to meet their needs.

Working on a spreadsheet is not like working in accounting software.  Be sure to research and find the appropriate accounting software to make your business bookkeeping run smoothly.

 

  1. Financials are incorrect

Incorrect financials is a threatening accounting problem in your business. If your finances are incorrect, it may sink your funding round in your business. Check out America's Best Bookkeepers

Any error in financial statements leads to big losses. Business bookkeeping and other business operations will be a mess if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be clear and related to cash flow and balance sheets. Delayed data entry is a big risk for fraud and theft.

 

  1. There are projections in revenue, but there is no financial data

You cannot have a clear picture of how much revenue your business has generated unless you know the expenses and purchases you have made. Your sales are increased, but is that according to the profitability of your business? Investors want to get a clear and transparent presentation of your financial data to invest their money. A business loan cannot be achieved from banks unless a clear, transparent financial record of your company is present. 

 

  1. Financials are not produced monthly

In a small business, it is often thought that it is appropriate to produce finances on a quarterly or bi-annually basis. However, monthly financials show investors that you are closely monitoring your business.

If you do not produce monthly financial statements, it can lead to a negative balance if expenses are made, but no income statement is updated. Invoices that need to be paid by the company may go unnoticed, and it can put a bad reputation on a company. It can end terms with the suppliers. Business growth is halted or significantly reduced. Check out America's Best Bookkeepers

 

  1. Your personal and business accounts are all mixed up

Business owners often mix their personal finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated, then it cannot be known what was intended for business and what was used personally. The amount of profit that was generated out of your invested capital cannot be estimated correctly.

Your funding is going to sink if you do not keep a separate business account. 

Conclusion

A small business owner is enthusiastic about growing its business at a rapid rate. In the start, small business owners fund their business without keeping their financial data up-to-date and tend not to focus on accounting problems while running a business. Such accounting problems can sink your funding round.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
business funding home - Complete Controller

When creating a solid business plan, the funding of your business is a critical step. The first thought is to apply for a loan or borrow money from a relative. These methods come with restraining a valuable asset or time. The best place to find the funding solution is your own house.

 

Bootstrapping is another term for “self-funding.” Bootstrapping is a variety of different methods used by entrepreneurs for financing their startups other than a small business loan. The phrase “pulling themselves up by their bootstraps,” means doing business without help from an outsider or doing business without any external financial support. Check out America's Best Bookkeepers

The advantages of bootstrapping a business are simplicity; it has low operating costs, flexibility, and requires less time. Here are ways to make funding a business from a house possible:

 

Source #1: Household savings

Savings are used as a business investment by many entrepreneurs. This is an ideal source. How much profit will be earned is in your control. No justifications to other investors need to be given.  It can be operated as you perceive best.

You need to be determined and sacrifice your luxuries to start saving so that you can obtain enough to launch a startup.

Source #2: Credit

The use of credit cards and a house equity loan is used as the source of funding, but it can be risky. By utilizing these resources, your credit or home is at risk, so these should be used carefully.

Source #3: Family members and friends

Family and friends can invest in your business; however, if anything goes wrong, your relationship with them can be affected. Moreover, personal and business relationships should be kept separate, and investors should be treated professionally. Check out America's Best Bookkeepers

Source #4: Customers and suppliers

Prepayment by customers can be utilized as a business fund but, keep in mind that customers will prepay only if you provide exceptional services. They are interested in your products.

Managing finance for your business from supplier credit is another source. 30-60 days are given by suppliers to get payment after delivery. This credit can be an interest-free source of leasing. Getting credit form suppliers needs little effort but is a great funding source.

Source #5: Small Business Administration

The SBA offers microloans to small business owners. Its range can be up to $50,000, and it can be easy to get. Training is provided to beginners.

Source #6: Peer-to-peer lenders

This personal loan is given to entrepreneurs by investors for startups. It is small (ranging up to $35,000 or more) in peer to peer lending personal credit, which matters a lot for startups.

Source #7: Factoring companies

The credit of clients can be utilized as funding sources because most clients agree on 30-60 days to pay the invoice.

Source #8: Leasing

The equipment needed by a small business can be leased from a finance company on a month to month rent. After the accomplishment of the lease period, the equipment can be purchased.

Source #9: Crowdfunding

Crowdfunding is a unique way to manage finances for businesses. It requires pre-selling products by you and pre-purchasing by customers. If sufficient consumers pre-purchase merchandise and the transaction clears, you can move onward and forward. Check out America's Best Bookkeepers

Source #10: The bank

Banks offer loans against assets, especially for commercial credit. These assets should qualify with the strict criteria of the bank.

Source #12: Government grants

Many loan schemes are started by the government to provide small business loans. This is the least reliable method.

Source #13: ACH Loans and merchant advances

ACH loans/merchant cash advances permit you to fund future trades. ACH loans are used to finance commercial sales, whereas merchant cash advances are used to finance credit card sales. You pay back the lender by giving them a portion of your monthly credit card sales or by allowing them to debit your bank account through the ACH system (direct debit).

Conclusion:

A reasonable amount of savings every month from the household and monthly income will give you greater and better funding for your business. All these methods are useful when your business planning is well organized.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers