To get your business venture off the ground and watch it grow, there are several different funding options you can use to get there. Since every business has different needs, there is no one “right” financial solution that can be applied to ALL businesses. However, you can use this map to determine what financing option would be right for you:
Once you identify where your business venture lies on the “Stage Development” axis you can clearly see the level of investment risk associated with that stage. After you learn this, the next step would be to decide how much money you actually need. Usually businesses fall into one of the three categories:
- Brick-and-mortar businesses (manufacturing)
- Online businesses
- Service providers
Based on which category your business venture falls in, you will face different expenses. Make sure to look into the specific category and what expenses it entails. Talk to other business owners in the business category. Do some Googling! However, some of the common business expenses that most businesses incur include: office space, equipment and supplies, licenses/permits, lawyer, accountant, website design, advertising/marketing.
Include all these into your expenses spreadsheet (yes, now is a good time to start one!). When you build a decent list of expenses you will need to run your business, you can estimate the cost of each one. Some costs, such as licenses or lawyer fees can be well-defined. But others, like website design or advertising, will depend on how much money you want to allocate to them. Research all expenses thoroughly in order to evaluate what offers the best benefit and has the lowest costs.
When you have the final amounts for each expense, you should put it in a formal report. This report, together with your business operations plan, can be used to search for or attract investors. Of course, if you are unsure about any of the steps that you need to undertake in this process, it is best to speak to an expert on the topic. Few options for this include: freelancers (experts on the certain topic), or specialized consultants