After setting up my business and being successful, one common question I always face is – Where did you get the funding from? This is a tricky question. And the answer is even more tricky. Business funding does not come out of your pocket, it mainly depends on how you manage your funds.
Once you start operations, the first 3 months are going to be the toughest time. I personally put in more than 12 hours of work every day. Each of my companies – VO logistics, Virtual Healthcare, and VO IT had different strategies at the start. The winning strategy in business depends primarily on how you spend the incoming cash flow.
In fact, there is no answer to that question. It is all in the mindset. Marketing strategies and business development models need to be strong. This will ensure savings as well as the steady growth of the business.
There is numerous advice available on the internet, but till the time you do not start working practically, you will not understand the issues. Therefore, it is essential to learn as you develop.
Options For Sustainable Business Funding
It is a general understanding that starting a business requires a lot of funding. However, there are alternative options available. From my personal experience, I believe working for the success of the business is more important.
The flow of finance will keep your business running smoothly. Everything depends on the marketing strategies. I have put up 5 essential tips which will provide options for generating revenue in the initial stages.
Try To Raise Funds From Investors
This is not a simple process though. Roping in investors requires you to convince people. There are chances for you to ace a lot of denials. It is important for you to have a very strong business idea.
However, trying multiple times to get funding may push you to equity. And after that, it becomes even more difficult to get funding.
Creating Strategic Partnerships
This is a more innovative approach for funding initial operational costs. Partnerships with other companies can be highly profitable. Mutual understanding also improves the functioning of the company. Other advantages include lower costs, an increase in reach, and better efficiency.
Creating partnerships helps in generating business funding easily. This is because of the positive impact for both members who get the maximum advantage.
Improving The Efficiency Of Operations
It is essential to plan every action well ahead of time. This helps in the proper planning of various activities. There is no specific time when to start this process. It is better to start this process immediately at the start of the business.
I have personally seen a number of business owners who are almost left cashless at the end of the month. To avoid such a situation it is essential for having proper operation efficiency. For generating a steady income flow, efficiency is necessary as well as automation of activities to some extent.
Strategically increasing revenue
It is not possible to expect a high income right from the start. There should be steady growth. But it is essential to ensure that the growth stays positive. Working on the pricing strategy, and expanding the customer base are key answers for continuous positive growth.
It is very essential for business owners to have a proper plan for increasing their revenue steadily. Trying too hard for sudden growth can also have its own negative impact on the success of the business.
Optimizing Cash Flow Management
A lot of business owners believe in spending for earning. Although this may sound like a good idea, this is not a proper method of spending. There should always be a proper strategy before spending. The key to winning strategy in business lies in proper planning of the various spends.
It is essential to spend only on essential activities and cut down on other unwanted spends. This not only helps in saving but also inculcates the habit of steady investments.
Other Funding Options
Although the above options for funding are mostly based on equity, I personally recommend staying away from equity. At least till the time the business starts performing better, keeping expenditure minimal is a good option.
There are a couple of options that one can explore in this non-equity segment. However, these are also not simple and may require additional effort.
Prior saving before starting the business
This is one option that a number of entrepreneurs do. They try to save as much as possible from other sources of income. After realizing that this will be enough for the business to start, they invest the money into their business. This not only makes you independent but also lowers your financial dependency on other sources.
The one disadvantage of this method is the delay it takes for setting up a successful business. A genuine business idea may become old and outdated after a few years. There is also possible that competitors develop in the meantime. Therefore, postponing a business idea for some time may have some negative impacts as well.
Having A Friend Or Family To Support Your Start-Up
This is the best option for starting a business. Although the risk of losing money is little, being credible is essential. It is essential to have equally strong marketing strategies when investing. Non-equity funding is an advantage, however, there is a need to pay it back.
This may look like an advantageous option, however, this option too has its own issues as well. From receiving funds on a timely basis, to the payback time, there is a sense of insecurity. This is one of the most complex methods of funding in comparison to the others.
The main reason for the complexity lies in the reason that the repayment schedules may become tricky. The lack of proper agreements also adds to the existing complexities.
Obviously, none of the above steps can prove to be foolproof. Successful business setup requires implementing a key strategy for sustainable business funding. There is a very slim line of difference when it comes to planning. Proper planning can help you reach new avenues in your business.
Although my family was into business, I wanted my name Anek Bedi to have an individual identity. The idea of entrepreneurship was in my mind since childhood. In 2014, I started my company, and since then there has been no turning back. I am proud of the way my business is growing. I credit my success to my team who are the real face of the brand.
A clear road map is a perfect way to get things done. The winning strategy in business lies in having a proper plan and then following the plan. Staying grounded in the roots even after achieving success is essential for continuous growth.