Most businesses, at some point in time, need injection of cash for operations and or growth. Without the needed capital injection, a business can grind to a halt or achieve sub-optimal growth with detrimental long term effects.
Fundraising is one of the top 3 challenges most entrepreneurs face. Here are 3 tips that can help you with your fundraising exercise for your business
1. Prepare well in advance for fundraising
Ensure that your business is creditworthy and due-diligence ready. This involves incorporating best practices in business management, bookkeeping and accounting right from when you start the business. The financial and operational discipline you develop will not only help you attract money but help your business grow sustainably.
2. Establish whether your business needs equity or debt
Knowing what kind of funding (a) your business needs and (b) qualifies for helps alleviate a lot of the headaches entrepreneurs face when raising money for their companies. Get professional help to guide you on what financing your business needs at any particular stage and what options exist for businesses like yours.
3. Understand your business and what makes it attractive to investors
Apart from strategic investors who acquire a company for its talent or for other strategic reasons, all other investors and lenders are interested in how your business will generate enough cash for them to recoup their investment (whether short or long term). Understand how your business will make money long term and the factors that drive revenue growth and cash generation. This will help you explain to investors/lenders how they get their money back and also serves as a blueprint for business success.
Learn about this and much more in the training session, How money works in a business