When you are first starting a business, one key component will be the funding you have available. In some cases, people start out their small businesses organically and fund their company as they go from the profits of their sales. In other cases, someone has an ambitious idea for a startup and seeks outside funding to fuel the business. No matter how you approach funding, the reality is that having enough capital available will be vital for your business’ growth.
If you are currently in the stages of securing funding, you are probably both excited and nervous. It is wonderful to find new funding solutions, but it isn’t always easy to accomplish this task. Make sure you check out these five important tips when you are seeking funding as a small business and reach out to our team at any time to learn more about our asset-based lending solutions.
#1: Make Sure You Have Accurate Numbers
During the process of seeking funding, providing accurate reporting on where your business currently stands will be paramount. Anyone who is considering an investment in your business will want to see data on where you currently stand and your future trajectory. Depending on the type of business you are in, creating a forecast for your future can be difficult at best. In some cases, there are so many factors to consider that coming up with the right numbers can feel like throwing a dart into the dark.
When in doubt, seek the help of a professional business analyst. If running numbers isn’t your strength, don’t just throw together what you can and hope for the best. It is vital that you have extremely accurate record keeping and that you are 100 percent honest and straightforward with any potential investors. This will ensure that everyone is starting on the same page and that no one is misled.
#2: Think About The Best Presentation Team
As you approach banks, investors, and other funding outlets, be sure that you have thought through how you will present your case. Are you a talented public speaker? If so, spend time honing in on the presentation itself. Do you struggle with speaking to a group? Perhaps it is worth putting together a team to help out with the actual presentation. In some cases, you as the founder of the business might not be the best person for presenting the numbers to potential investors. Bring along your numbers guy if he is better at demonstrating where your company’s future growth can lead.
Not only do you want to ensure that you have your best team possible for presenting your case to potential investors, but you also want to be sure that the way you are presenting the information is easy to understand. In some cases, you will be working with a very limited amount of time to make your case. In other situations, you will be grilled about the information you are presenting. Take the time to practice your presentation in front of others and ask for honest feedback. This can help you see any holes before you are standing before a group of potential investors.
#3: Seek Out The Advice Of A Mentor
Not all funding is the right fit. It can be easy to want to take the first offer you get from a potential investor, but there are a lot of factors to consider. What kind of stake are you losing in the company? How much control will you be giving up and is it commensurate to the capital you are being offered? These, among many others, are important questions to ask before you sign on a dotted line.
The best thing you can do during the funding stage of your business is to seek out the advice of an experienced mentor. If you are new to the world of business, your best resource will be someone who has walked your path before. A mentor can help advise you on whether or not a deal is actually a viable solution for your specific company’s needs. They can help you step back and think clearly to prevent you from excitedly signing a contract too fast.
#4: Don’t Allow Setbacks To Discourage You
Raising funds for your company is not easy. There will be countless setbacks along the way and more “no’s” than you probably want to think about. However, the key to success is to never give up. Those setbacks cannot be your focus going forward. Rather, you need to keep on pounding the pavement and looking for alternative solutions.
Odds are good that the first funding opportunities you seek will not be the final answer to your needs. When one door closes, look for another to open. When one solution is a bust, try to brainstorm a different path that your company can take — which leads us to the next point.
#5: Be Open To Unique Funding Solutions
In some cases, traditional means of funding are simply not an option for your business. If you have been rejected by multiple investment firms and banking establishments, it might be time to open up your mind to different possibilities. For example, here at the Commercial Finance Group, we offer asset-based lending as an alternative funding solution. This method of funding allows you to leverage your existing assets to obtain working capital. You can then use this capital to help spur the further growth of your company. The end result? You can work your way back to being eligible for traditional funding solutions. While you might not have envisioned this originally as the right path for your company, having an open mind to new solutions can improve your chances of securing the funding you need.
The ability to continually approach funding from new angles will be an asset to your company’s future growth. If you have been deemed “unbankable” and you are looking for a new funding solution for your small business, please reach out to our team to learn more about asset-based lending and the unique solutions we offer. We can help you take a different approach to the funding process, allowing you to continue to operate your business smoothly.
