If you’re thinking about launching a new business, you may not know where to start with your finances. Here’s how to figure out how much you’ll need to launch your business and the best ways to get funding.
1. Be Reasonable and Realistic, Start Small
You most likely have high expectations for your company. However, blind optimism may cause you to invest too much money too quickly. At the very beginning, it’s smart to keep an open mind and prepare for issues that may arise later.
A prospective business owner should start planning a small business by simply understanding the potential of the business idea. The best approach is to test your idea in a small, inexpensive way that gives you a good indication of whether customers need your product and how much they’re willing to pay for it. If the test seems successful, then you can start planning your business based on what you learned.
2. Estimate your costs.
According to the U.S. Small Business Administration, most microbusinesses cost around $3,000 to start, while most home-based franchises cost $2,000 to $5,000.
While every type of business has its own financing needs, experts have some tips to help you figure out how much cash you’ll require. Have a plan to cover your expenses in the first month and identify your customers before you open the door so you can have a way to start covering those expenses. When planning your costs, don’t underestimate the expenses, and remember that they can rise as the business grows.
The SBA states that there are various types of expenses to consider when starting your business. You need to differentiate between these costs to properly manage your business’s cash flow for the short and long term. Here are a few types of costs for new business owners to consider:
- One-time vs. ongoing costs
- Essential vs. optional costs
- Fixed vs. variable costs
- Direct Costs vs. Indirect Costs
- Most common startup expenses
- Web hosting and other website costs
- Rental space for an office
- Office furniture
- Basic supplies
- Basic technology
- Insurance, license or permit fees
- Advertising or promotions
- Business plan costs
3. Project your cash flow.
Another important aspect of a startup’s financial planning is to project the business’s cash flow. New business owners should project their cash flows for at least the first three months of the business’s life. Add up not only fixed costs but also the estimated costs of goods and best- and worst-case revenues.
This is an essential step in maintaining your business’s financial health. Without being realistic about your cash flow and debt, you won’t be able to get your business off the ground, especially as other costs begin to build.
4. Figure out your financing methods.
Once you’ve determined your costs and projected your cash flow, you’ll need to consider how to pursue financing. How you obtain funds will affect the future of your business for years to come. Personal savings, loans from family and friends, bank and government loans, and grants are just a few potential funding sources. Many companies use a combination of different sources
Thinking of Starting a New Business?
Now is the time! With our society ready to get back in action (safely), new business concepts are quickly emerging with creative flows for serving the public without the high risk of spreading the virus. Put your innovative business concepts into play, and connect with us to get the funding you need to start your newest venture!
Financial restraints have been a complaint for many of the dreamers, limiting themselves to their immediate funds. There is an alternative. If you have the dreams and decent credit, Small Business Loans and No Doc Loans are available to you. Our goal is to provide you with the knowledge you need and the resources available to make your dream a reality. Give us a call – we have the education and the perspective to help you obtain the loans you need for your small business. Visit our website or give us a call to find out what financial backing is available to make your business soar!
Unsecured Finances has over 10 years in the consulting business! We specialized in educating and assisting clients on acquiring Unsecured Business Loans and Start-Up Business Specialty Loans including; Unsecured No Documentation (No-Doc Stated Income) Loans, Unsecured Business Loans, and Unsecured Start-Up Business Loans and Lines of Credit from $10,000 to $500,000 without Assets.
Apply on our website to find out if you qualify, or call today for a free consultation: 1-888-294-2584