GET FUNDING FOR YOUR EVERYDAY BUSINESS Part 2: How To Grow Your Business With Other People’s Money
Lost in Translation Entrepreneurs and small business owners know their product very well, the services they offer, how to market, how to sell, but they arenâ€™t always familiar with the needs of the business.
They know they have a good business plan, but they donâ€™t know exactly how much capital the need to fulfill that plan.
So when these entrepreneurs and small business owners approach banks and investors without a clear idea of how much money to ask for, or asking for funding for the wrong reasons.
Most business owners approach banks for money to fuel their companyâ€™s continued existence; pay the bills, fund employee payroll, purchase equipment.
But banks and investors are asking questions like… • “How is your cashflow?” • “What does your balance sheet look like?” “What are your long-term plans?” • “How do you intend to grow your business?” “How will you pay me back?” or • “What returns can I expect?”
Banks and investors arenâ€™t asking these questions to be difficult, theyâ€™re like doctors asking the questions to assess the health of the company.
Most business owners haven’t spent much time building relationships with the bank or investors BEFORE they need funding. It’s like trying to get money from a total stranger. Do I know you? Where’s the trust? Where’s the credibility?
Business owners need to start bridging the gap between themselves and their sources of funding, to get over the barriers of communication and start speaking the same â€œlanguageâ€?. Continuation in Part 3
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