Owning and operating a business is a daunting task and one in which many small business owners have failed simply because they weren’t adept in the world of finance. They knew their industry inside and out but never seemed to understand business finance. Perhaps if they’d known about the availability of getting an online finance degree, they could have resolved issues as they arose. The key point is that no matter how expert you are in your line of work and how great your products or services are, you may be doomed to failure even before you launch if you don’t understand how to raise capital for your business, especially at startup.
The Difference between Failure and Success
Before looking at ways to raise capital for your business, let’s take a look at why the difference between failure and success is having an aptitude for finance. This isn’t necessarily something you were born with, although some people seem to have emerged from the womb with a financial head on their shoulders. Others need to study and may even be willing to study hard enough to earn an online master of science in finance degree. It is all well and good to raise capital, but unless you also understand the mechanics of repaying loans timely or selling shares without losing a majority stakeholder, you can be in for a world of trouble.
Suggested Ways to Raise Capital
There are many ways in which to raise capital for your business, but all may not be right for you. For example, if you want a small business loan to build a structure, you might want to go to a bank. On the other hand, if you are looking for money to keep you afloat while you are waiting for clients to pay you for invoices you’ve sent, there may be totally different ways of raising the money you need.
Some of the ways in which to raise capital for your business include:
- Traditional loans from banks
- Angel investors
- Friends and family
- Venture capitalists
- Funding from personal assets
While there are several other ways to fund your business, it’s good to remember that in the end, you need to pay back any capital in one way or another. Sometimes it’s a loan that needs to be repaid and other times it’s a share of the profits going forward, as when selling shares or repaying investors with a percentage, not quite in the way shares would work.
One thing which can’t be overemphasized is the need to understand the financial side of running a business. You may be the very best at what you do but if you can’t handle financial affairs, your business may soon fail – and at the point of losing everything you’ve worked so very hard for. Armed with the right tools, you can handle the financial side of your business, but that might mean taking a few courses or getting an advanced degree.
Finances are nothing to play with when running a business, so get it straight and you will succeed.