Most entrepreneurs’ will easily tell you that the greatest obstacle standing between them and perceived success is funding. True, some businesses may require additional funding but for majority, they usually have what it takes already. The problem is mostly the strategy for growth. Accepting funding from external sources comes at a cost which if most entrepreneurs thought deeply about they may likely reconsider. The process of obtaining external funding is stressful and tedious and can be a huge distraction for entrepreneurs.
It is not uncommon to find Small Business Owners who are so eager to launch out their brands; they barely take time to understand the implications of what establishing a business means. There is a marked difference between producing a product and building a business out of a product you have produced. One demands a higher level of commitment than the other.
One sure proof way of determining if you need external funding is from your business plan. A good business plan will tell you if the capital you have is adequate or if you will need more and how much more. Your business plan will also highlight what aspects of your business will demand the highest funding and at what stage you will need the funds. If from your plan, you realize that you cannot raise the required funding on your own, you may decide to restructure your business model. If you decide to ride alone without external help, here are some strategies that can help you keep costs at a minimum:
·Consider running a home office: Depending on the product or service you provide, a home office is an effective way of scaling down costs especially as rent prices are high and continue to rise. Having a home office saves you cost of rent, utilities, and other bills that are associated with renting an office space.
·Cut out unnecessary expenses: At this stage you do not have the luxury to spend like big businesses do, so aim to save every dollar. Seek out cheaper but efficient alternatives. The most important factor to keep in mind is that you do not compromise quality.
·Have a financial plan: Understand the math of how much it costs you to produce what you are selling, how much cash comes into your business, the time and materials involved, how you can price your products/services to remain competitive but still generate a profit. This is the foundation of your business model.
·Keep Records: I cannot overemphasize the importance of having records. The only way to know if your business is growing or declining is by reviewing data which you have collected based on your transactions. Use tools such as Microsoft excel to create spreadsheets to help with basic accounting and book keeping.
·Excellent Product/Service: The quality of your product/ service must remain top notch regardless of where you are running your business from. This is the singular factor that will keep customers returning for more and gain you new customers.
·Customer Service: Closely tied to the point above exceptional customer service. Make it a goal to meet and if possible exceed the expectations of your customers. If you have staff, share your philosophy with them and impress on them the importance of providing a unique experience for every customer.
There is a right time for every business to raise capital and this timing is different or every business. What works for one business may not work for another. What is more important is to focus on building a business that will be sustainable. Difficult? Yes, but Achievable!
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