Then you want to start a new company? You have done your research into existing companies and checked in your competition while having experience of experience along the way. You are armed with your business plan and describe all your moves from your goals, strategies and target market to your financial forecast. There is only a small obstacle left to run over, the decision and the corporate finance arrangement.
More and more companies and new companies fail to get somewhere past the starting line. There are two main reasons why most companies fail. poor management plans and insufficient working capital, why raising money is important in the early stages of a business.
So why is this need for funding so important? As a new company, you do not only need a place for your business to be housed in, but also all the necessary equipment that will be needed to ensure your business is fully operational. This initial capital will be used to pay for:
Hire purchase of premises office space, which requires payment of three months in advance.
All machines or office equipment
business services such as insurance
Purchase of stock
Any financial protection you need when you wait for customers to use your business
To get the right business finance and to ensure that people will be willing to invest in your business, it is important to have a well-structured and developed business plan. It should indicate how your business will differ from the competition, why people will use your business and how to give your customers what they need. Research has been conducted that have found companies with a structured business plan that indicate their overall goals and how they plan to move their business towards them, yielding a significantly higher profit than those who do not.
Most ways you chose to go down to secure corporate finance will not come close to your business without this business plan. So what are your business finance options? There are many options open to you but that does not mean everyone is right for you.
One of the first places people go for corporate finance is the bank. Although banks are still the most common form of corporate finance, it does not automatically mean they are the best. All banks vary in terms of what they can offer start-ups, so its important to talk with a number of them before making a decision. The banks will also expect to add some of your own money into the business; As a new venture, you can not afford this.
Another form of business finance is asset financing. This is a credit facility secured by assets such as real estate. Such as a new venture, you can use these assets as collateral to obtain capital. But if payments are not made, your assets can be seized.
An ever-popular choice of Business Finance for a new venture is a business angel. Business Angels is called this because they often save battling companies with both economics and advice when no one else comes. Angel investors understand the need for a new company with their own experience and can afford and support companies in many ways. Business angels are successful entrepreneurs or executives. With its skill, happiness, careful planning and good management; They have made many companies profitable.
Finally, there are venture capitalists who are private investors for financing new or growing companies and even struggling for established companies. Even though they are high risk investments, they can offer the potential for over average returns and or a share of ownership of the company.