First Financial’s How to Finance Your Business Seminar that was held recently, provided information to attendees on how they could fund their business. For those who missed it, or attended and would like a refresher — here are some of the key points that presenters of SCORE 36 went over:
The differences between funding and financing – Working capital is your financing. Equity cost is your funding.
Sources of funding – There are personal funds, family investments, business loans, venture capital, and group investment. *Some financial institutions do not offer business loans under $50,000. First Financial is one that does. Contact First Financial’s Business Development Department for more information.
Guidelines in financing your business – Anything that you do as far as funding can be risky and dependent upon your business succeeding. When funding your business, don’t forget about your day-to-day personal needs and what you’re going to live on. You need to make sure you have enough money to cover your personal expenses for approximately two to three years. Give yourself a salary!
Functional financing – You need to anticipate what your expenses may be. Your expenses include: electric, phone, Internet, and anything you need to run your business. Your expenses should make up a budget which you should hopefully already have in place for your business. And, don’t forget about sales tax.
Pricing – Be sure to price your products and services correctly. Develop a pricing strategy that will cover your expenses and make a profit. Take a look at your competition. Think about what sets you apart from them. Consider how you can make yourself more valuable to the people you serve. Understand your market and look for ways to curb expenses.
Turning profit into financing – Know your personal finances and include the amount you need to live. This works with guidelines in financing your business, it is important to pay yourself first.
Sources of financing – There are lines of credit, credit cards, short term loans or other business loans, and leasing.