So you’ve settled on what type of business you want to do and you probably have a business plan laid out as well. The next step is to figure out where to get money to fund it.
Oftentimes businesses start out under-capitalized from the get-go, which can slow down their business growth. After all, a business can only grow so much with little financing. Today’s harsh economic climate can make it doubly challenging as well.
Keeping those things in mind, it’s very important to have the right working capital requirements from the start. Here are some helpful tips on how to finance your business:
- Look at Your Personal Finances
It all starts with you, even when it comes to funding. Most business start-ups are funded by self-financing. Start by doing an inventory of your assets, such as savings accounts, retirement accounts, equity in real estate, vehicles, and even collections.
- Determine How Much Money You Need
Ask yourself what do you need the money for? Go back to your business plan for this. Do you need it to pay rent and your employees? Do you have equipment that you need to buy? Remember to prioritize areas where you’re limited to paying in cash.
- Consider Bringing in an Investor
An investor is another equity option worth considering. Investors are usually people who are interested in providing equity for a stake in the business, but do not want to carry the burden of running the business themselves. If your business plan is good enough, you can bring in an investor who will not only help you with finance, but also with knowledge and experience.
- Explore Different Lending Options
There are plenty of ways to secure capital funding apart from your personal finances. First would be banks, although they are generally the hardest to qualify for. Consider different options like specialized lenders, leasing companies, state pension funds, or even high-interest loans. You can also try borrowing money from relatives and friends, but use this as a last resort as much as possible and put everything in writing to avoid creating tension.
When weighing your lending options, also consider important issues like cost, the payback program, and the loan size.
One Asia Center is happy to provide you with all the things you need to get started and move forward with your business in the Philippines