Whether you are starting a business or expanding a current one, understanding the early cash flow dynamics is essential to both determining how much you need to finance the business and your overall success in achieving positive cash flow in the first several months of your business.
We are often asked about how a company can get its initial financing. There is usually considerable misunderstanding about the various alternatives and their implications. This article positions the various alternatives that a company should consider before embarking on a financing strategy.
There are many ways to skin the cat when it comes to financing a business. You need to really look at the fundemental financial dynamics and understand what the appropriate sources of financing should be for your company’s specific situation.
Whether or not you are approaching venture investors or simply trying to convince someone of the attractiveness of your company, you need to have a well thought out presentation that tells the story about your business in a compelling and exciting way. Nobody is going to invest in or join your company if you cannot effectively explain why they should be spending their time and money to participate in it.
Entrepreneurs often come up short when explaining how they are going to achieve potential customer awareness of their new product or service. Generalities about widespread advertising, appropriate trade shows and email campaigns will not impress potential investors and will leave the impression that you really don’t know how to find customers. When explaining this aspect of your business, you need to bring your marketing programs to life with specific targets and expected results that are focused on the sweet spot of your target market.