Ask Questions 
Share Tips 
List Your Business 
Coffee Talk with Experts 
Biz Planning | Sample Plans 
Idea 
Name 
$ 
Do It! 
Promotional Merchandise
Managing | Operations
Work @ Home 
Yoga @ Your Desk 
|
|
Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
New To Business? Get Your Personal Finance In Order
Settling on a big idea and moving towards setting up your own business is an incredibly exciting time, but it’s expensive, too. According to the SBA, it costs $30,000 to open a business, and for a lot of people they will require the input of their own personal reserves, or lending that they personally will ultimately be responsible. It’s in this way that your personal finances become tied to your business.
It can work both ways, however. A willingness to wisely invest in your business can provide impetus where it would otherwise require handing over a piece of your business to investors. Finding the right balance in managing your business financesis crucial to having a healthy business.
How your personal history will impact on establishing your business
The good news for small business founders is that funding is not far away. According to USNews, banks loaned $600bn to small businesses every year - and that's without considering personal cash injections and venture capitalism. You will typically have a business and a personal profile, but they can affect one another. It is entirely possible that you will have no business profile, but a good personal score can persuade bankers. The opposite is true, and having negative decisions on file when it comes to credit reports can affect you. How do you counter this? Before thinking about establishing your business, make sure that everything on your credit report is up to date. Take steps to ensureit presents a good image, and follow good credit practises in your private life.
Supporting your business with personal funds
While it is now fairly routine for businesses to receive loans and cash injections, 40% of businesses receive lessmoney than they requested, according to US Today. Plugging the gap is your own personal funds. This can be from savings, salary, or even personal credit measures. This is a great way to help fund your business and gives you full control. However, ensure you treat it like a business. If you opt to use personal credit cards to fund your growth, you cannot repay it with business funds; it will co opt from your personal life. Make sure you clearly define your incoming funds and outgoing cash. It’s best practice to get any credit arrangements you have in good health prior to opening a business to remove any temptation.
Attracting capital investors
Businesses often receive their ‘big break’ when they are targeted by venture capitalists. If an idea seems reasonable enough, big money can come in to supercharge the business. According to Bloomberg, startups took in $67bn of venture capitalist cash last year, showing the possibilities and market appetite.
Like with the banks, venture capitalists will ask questions concerning your ability to manage the business, as this comes under risk. It’s crucial that you have your personal finance together to demonstrate that you’re able to manage a big-figure business in the future.
Starting up a new business is exciting, but in many ways it will be a reflection of how you live your life. You need to be financially responsible, organized and pragmatic. If you can demonstrate these traits, lenders will have faith in you.
|
|
Small Business Tax Center • Idea Cafe Home • Sign Up • Biz Grant Center • CyberSchmooz •Coffee Talk with Experts • People in Biz Profiles • Starting Your Biz • Biz Planning • Running Your Biz • FREE Trade Publications • Marketing • Financing Your Biz • Human Resources • Legal & Biz Forms • Managing Your Biz • eCommerce • You and Your Biz • Gen X • Work@Home • The Fridge • De-Stress • Send an Award • Send an eGreeting • Yoga @ Your Desk • Web Guide • Idea Cafe in the News • About Idea Cafe • Advertise on Idea Cafe • Contact Us • Privacy Policy • Site Map • Small Biz News
Copyright 1995-2023, Idea Cafe Inc. Downloads are for personal use only, not for resale to others, and may not be reprinted in any form without written permission from Idea Cafe Inc.
DISCLAIMER: We hope whatever you find on this site is helpful, but be cautioned that it may not apply to your own situation, or be totally current at any given time. Idea Cafe Inc. and all of its current and past experts, sponsors, advertisers, agents, contractors and advisors disclaim all warranties with regard to anything found anywhere on this family of websites, quoted from, or sent from Idea Cafe. and its related sites, publications and companies. We also take no responsibility for comments published by others on these pages. TRADEMARKS: The following are Registered Trademarks or Servicemarks of DevStart, Inc.: Idea Cafe®, Online Coffee Break®, The Small Business Gathering Place®, Take out Info®, Biz Bar & Grill®, Complaint-O-Meter®, A Fun Approach to Serious Business™, CyberSchmooz™, and BizCafe™.
|
|
|
|