Launching a new company is an exciting, intimidating journey. It involves tackling several challenges, including recruiting human resources, buying technology, and more.
One of the most pressing issues startups encounter is the creation of a financing strategy. And not just any strategy, but a comprehensive plan that suits their financial needs, objectives and goals.
Financing strategy: Why it matters
No company can survive without a financing strategy. Comprising short and long-term financial goals and targets, a financing strategy enables companies to make better use of their financial resources.
After all, startups need money to survive in the competitive industry.
An effective financing strategy can help them manage their resources to achieve their business objectives.
Developing a financing strategy involves research, planning and decision making. Read on to understand how you can develop a practical financing strategy for your startup:
What is your business plan?
Before approaching banks, investors or others for financing, you must come up with a clear business plan. Without a business plan, lenders don’t provide financing to companies.
Your business plan should include:
- Your company’s mission
- Your company goals, objectives and long-term plans
- Your main products and services
- Your target audience (age, income, etc.)
- Your main competitors
- What separates your business from others?
- How much funding you need from lenders?
- How will you use it?
Your business plan should be clear, concise and compelling. Investors need to know why they should put their money in your business. Tell them why investing in your startup is an attractive opportunity for them. What makes your startup different from others? How will you use their funds? Investors want to know that they will get substantial returns on their investment.
What are common funding sources for startups?
From partnership to venture capital, there are plenty of funding sources for startups. Depending on your exact business needs, you may approach the right financing party. But, as a rule, you should consider as many funding sources as you can. This is the way to secure the best deal.
Before meeting with investors, make sure you do your homework. The more prepared you are, the better.
Investors will ask many questions about your company. They want facts and figures to determine whether or not they should invest in your business.
Apart from the business plan, study your business and industry to make the right impression on investors.
Are you ready to develop your business financing plan? Contact humanitarian, philanthropist and insurance executive, Gregg Marcus, to kick start your financing plan. He provides financial consultation to established and upcoming businesses based in Georgia, Texas, NC, Chicago, Michigan and more.