A lot of business entrepreneurs today, usually face some thorny problems of raising a good capital to finance their efforts, this is because setting up any worthy business venture requires not only technical know-how but also very good capital to keep the business going.
Moreover, ability to plan ahead of time for the immediate and remote financial needs with the venture, no doubt, should enjoy a cogent role during how much capital that could be increased and sources in this value can be from two places – debt and equity.
Sourcing for capital through debt from loan merchants could be quite challenging considering that facility providers always evaluate critical areas such as the entrepreneur’s character, capacity to pay, protection, social conditions and the income that the person him or herself is ready to invest in any venture as well as the level of its competition in the focal market.
Whichever manner one looks at it, acceptable capital is an inevitable condition to start up a business, run it well particularly during these hard days from global economic melt down and ensure a good way to rest even, the normal inclement surroundings notwithstanding. Capital is generally confessed as the amount of financial resources important for the implementation and delivery of a profitable business venture.
The idea normally stands to rationale that for an entrepreneur distribute his or her first product or service, bother for financial resources and item development; marketing as well as management support cannot be overemphasized.
To raise a good capital for a new business venture the following questions are to be conscientiously answered: What is the needed capital? How much is the entrepreneur geared up, willing and able to buy the effort? How much can the affected individual raise from other offered sources as well as the ability to encourage other persons to provide the balance?
The major issue consequently is how to find the right and profitable source of fund which has a very high return and evenly ensure the lowest accruable cost. Although this may look fairly simple, experts are of the access that it is a matter on the careful analysis with regard to that targeted business environment. That they equally maintain that catastrophe to secure a good capital is a sure way to business failure.
The next step consequently is to decide the quantity of any assets the person is willing to invest in the business as collateral capital since the necessity to make sure you inject one’s personal pay for into a business cannot be ignored. This is because if an adequate personal capital is not there, the choice is to source for one which will suit the type and size of the intended business enterprise elsewhere.
When sourcing for capital through debt or loans, the entrepreneur must cook well-thought-out business plans, economy analysis, projected balance bed sheet, imaginary profit and loss account as well as cash flow projections and this should be for the first six months or at least one 12 months and thereafter three years as this is what lenders normally always see to guide them on their decisions.
Capital, in the true sense with the word, is not just the amount of profit at hand but rather the fund available for the execution of an business venture, so the primary capital, in this regard, must originate from the person setting up the business her or herself. To start with a comprehensive veritable assessment of the entrepreneur’s savings, stocks, bonds, market value of life insurance and investment in real house must be made.