Investment Discussion

It is one thing to have a business idea and it is another thing to bring that idea into actualization. Many people have great business ideas that are quickly forgotten no sooner than they realise it will hectic when it comes to funding.

Sufficient working capital is a key aspect of any company’s financial health, and not having enough working capital can have a serious impact on the future of your business. Many businesses choose to apply for external funding to create enough working capital to enable them to fulfil their growth ambitions. A loan can cover short-term funding requirements while giving the business the money it needs to grow, or can bridge the gap between customer orders and supplier payments to help the company meet its funding obligations. Figures from the British Business Bank’s 2015 Business Funding Survey show that working capital is the most common reason for small businesses to seek funding.

Sourced from:

For others who already started a business funding could still be needed. This is because there is capital needed to start a business and funding needed to sustain it. It is therefore important to know the signs of a growing business that still requires funding to be fully established.

  1. Cash Flow Management – You have heard it time and again that cash is king. In order to succeed as a business, you must effectively manage your cash flow. This is a common issue for many businesses. Ultimately, businesses have to deal with negative cash flow due to poor planning. And because of the nature of some companies, they have to at times spend more cash than is available. This is usually the case for a business that has to stock up on its inventory at certain times during the year. Other businesses may deal with negative cash flow issues because they experience different business cycles or seasonal fluctuations. This would be the case for a business that is busier at a specific time of year.
  1. Growth / Expansion – Obviously, we are discussing funding your business at its growth phase. So let’s discuss specifically recognizing funding needs for specific expansion projects. The type of expansion really depends on the nature of your business. Expansion can mean different things to different types of businesses. So what are some specific expansion projects that your business may go through?Sourced from:

A business idea should not be dropped but it should be pursued till it is actualised. There are several ways of getting funding simply try them out and see what comes in.

1. Boostrapping

In the idea/experimental stage, use your own financial resources, such as money from a savings account or careful use of personal credit cards. Wise deployment of these precious dollars is critical.

2. Friends and Family

If you don’t have your own savings or credit cards – or you do, but your growing business needs additional funding – all is not lost.  Consider inviting family and friends to invest in the company with the understanding that their money may not be returned.  In most cases, these friends and family are investing in you, not your business. Both parties should think of this investment as a grant with no strings attached. If the enterprise succeeds, a reward to these risk-takers would be a nice gesture.

3. Crowdfunding

Let’s take the “friends and family” investment discussion up a notch or two. If you haven’t heard about crowdfunding, you must not be serious about funding your business – or you’ve been living under a rock over the past six months. Or both. Crowdfunding – allowed under the JOBS Act launching January 1 – allows for a wider pool of small investors with fewer restrictions and is ideal in the early stages of a business, especially if you don’t qualify for a bank loan, aren’t ready for angel or venture capital funding (as outlined later in this article), or don’t have the friends or family willing – or able – to provide the “no-strings-attached grant.”

Sourced from: