Did you know that 67% of startups fail within a few years of commencement? Reason? Inadequate management of cash. That is why many entrepreneurs start to get frustrated when their financial statements show negative cash flow.
Collecting finances for your business and managing them are the most challenging tasks that you have to face. Failing at these challenges means endangering the existence of your business.
But, here’s the catch! No one would intentionally fail their company. Right? So, it means that this unintentional mistake is the cause of any loophole in the corporate objectives.
Speaking about corporate objectives, tell us something: According to you, what is the most crucial objective of any organization? If your answer is making profits. Then, our dear reader, sorry to say but you are wrong. Earning profits and leading the market is secondary and tertiary objectives of the organization. The most crucial aim is managing the money available to you.
As Sir Richard Branson has said:
“Never take your eyes off the cash flow because it is the lifeblood of your company.”
So, now the crucial question is how to manage your money to fulfill all the operating expenses and avoid a shortage of monetary resources? To know the answer to this question, keep on scrolling.
Bank loan
What is the first thing that comes to your mind when someone says ‘money’? It is Banks/financial institutions. Right? Banks are made to cater to all the financial needs of every person. So, you can take a bank loan to run your business. There are several types of loans available for companies to select from, such as:
- Equipment financing
- SBA loan (Small Business Administration’s loan)
- Microloans
- Startup loan
- Fast business loans and many more.
So you can select according to your requirements. However, keep in mind that the financial institution will only provide you the loan if you have the capability to repay it. Moreover, you need to pay regular interest on it as well.
Credit card
Applying for a bank loan and completing all the formalities can take several days. So, when you are in a hurry, it is not quite helpful. However, if you have a business credit card, you will be able to survive this challenge. It will help you improve your working capital and reduce the burden of current/urgent expenses.
Nonetheless, you can’t just take any credit card. As it has been written here https://www.nav.com/business-credit-cards/, you should conduct proper research before choosing the card. However, you can’t do it all on your own. So you can take the help of experts to make the right decision.
Angel investors
A monetary deficit is not a surprise if your business is just a startup. However, because it is a startup, it becomes more than crucial to get the investments. So, you need to pitch your business ideas to angel investors. Make sure not to use jargon and highlight the key benefits of investing in your business while pitching the idea.
Wrapping up!
Even the most successful business ideas fail due to the lack of financial resources. You need to apply for bank loans, credit cards, and investors to manage your cash flow well. Once you get the money, ensure to use it properly.