In my previous post I discussed keys to entrepreneurship. Here I share my journey to get crucial key to entrepreneurship how to arrange capital for first business….
Arranging capital for first business can be challenging, whether you’re looking for start-up funds, capital to expand or money to hold on through the tough times. Hiring talented people, advertising, machinery, product stocks etc. are necessary to run business and all this required capital. Most of time it happen that entrepreneurs who depends upon limited capital stunt their business growth. Successful entrepreneurs mostly have sufficient capital a mix of debt and equity. Power of leveraging and compounding will surely act as catalyst. Majority of sitting on fence entrepreneurs think about arranging capital and few proactive move forward and fulfill their dreams. To start my business I realized that I need to arrange capital. Available option for me were
· To use my savings: As I mention that since last two years I was preparing myself to start business. I had saved enough to sustain myself for coming eighteen months. I decided to use my savings for initial expenses.
· Debt: Debt is good option but with cost. Debtors were willing to lend money for my business but they were insisting on showing initial cash flow. I decided to approach banks after establishing my business.
· Raising money from friends and relatives: I had presented my plan to number of good friend and close relatives. Two of my friends and one relative came forward to lend money to me for my venture. It was my big success.
· Crowd funding: Crowd funding is finance method where crowd funding platforms try to sell your idea with their members or wiling investors. I approached the three crowd funding platforms and discussed the idea but unfortunately I was not able to garner their support.
· Factoring: Factoring is a financial method where a I have to sells my receivables at a discount to get cash up-front .In beginning I was not able to convince them but after three successful billing cycles I avail the factoring for to leverage my cash flow conveniently.
· Attracting angel investor: I had communicated with angel investors but no one come forward. It was good experience. Angel investor’s interaction developed my business perspective with local approach.
I decided to go with my saving and taking help from my friends and relatives in future. It was risky but considering risk and reward I decided to chase my dreams.I suggest readers to go for calculated risk to fulfill their dreams.