Why do so many businesses fail? According to a recent Forbes article, at the surface level, they simply run out of cash. It’s easy to get things wrong when you’re starting out and the article points out that 8 out of every 10 businesses fail within the first 18 months.
Other factors that can contribute to a collapse include poor customer service, poor management, and unclear knowledge of the marketplace. On the other hand, good money management seems to be key to weathering the storm of starting up.
Anyone hoping to enter the entrepreneurial arena needs to first calculate how much cash they’ll need on hand, and how to generate more in order to keep the doors open, the bills paid and employees funded.
Good money management is key to business survival
If you’ve already amassed enough discretionary savings to stimulate your business, you may be okay for the short-term, although it’s still vital to track how much you’re losing, how much you’re earning, and what your make-or-break point is.
If you’re starting from scratch, additional funding is available from several sources. This funding will help you get your product or service off the ground. This includes loans from both traditional banking institutions and private lenders.
The U.S. Small Business Administration (SBA) may also be able to offer assistance through loan financing, bond guarantees or by helping you find venture capital.
Assembling investors is another useful option if you need more in the bank, as venture capital groups or angel groups can provide extra leverage.
Finally, crowdfunding is a new option. Originally, for long-shot personal projects when all other funding options have failed, it is now viewed as a viable funding alternative, allowing both large and small investors to come together in order to make things happen.
4 ways to secure funding for your startup
In our infographic, we’ve covered some of the main sources of funding you can secure for your startup business. You are welcome to embed and share the infographic.
How did you fund your business? Share your thoughts with us in the comments below.
Need help finding a loan? Check out the Bplans Loan Finder.