starting your own business is a risk that many individuals deem worthwhile. With much research and lending options they find the funds to help with the start up costs. There is a lot of information that revolves around starting your own business and finding funding sources, and this information can get confusing when trying to navigate it all at once. Consider these few tips to help simplify some of the confusion that surrounds starting your own business and finding funding sources to help offset some of the start up costs.
Start Up
The average amount it costs to start a company is around $10,000 and the reason about 80% of businesses fail is because of cash flow problems. Small business loans are a big factor in starting businesses, but without cash flow coming in paying off these loans can become a problem. Businesses that familiarize themselves with working capital funding strategies and strategies for working capital funding can gain an advantage over other start up companies. While some businesses that are in the process of going under are wondering what is business credit and what is business credit funding, those that have embarked on working capital funding strategies are making their way to the top despite being a new start up company. Knowing all resources available and using all of those resources are vital is a new start up business wants to make it past the start up and succeed.
Payments
One of the easiest things, aside from normal operating bills, that can be put off are invoices. Late paid invoices cause not only start up companies to gain a bad reputation, but a sturdy business that has been around many years to feel the effects as well. More than half of all invoices were paid late meaning that many companies had to wait for their money. If all invoices were paid on time in a timely manner it is estimated that companies would be able to hire over two million more employees, thus dropping the unemployment rate by as much as 27%. Paying invoices on time not only gives your start up company a boost in credit, but it helps those businesses that decided to take a chance on you as well. If your bills are paid on time, then invoices should be paid within 30 days to help not only our credit score for your business, but also the supplier that supplied the needed and necessary equipment or supplies to your company.
Credit Score
Personal credit scores are different from traditional business credit scores. When a person checks their credit they can expect to see a score between 300 and 850, but not a business. Business credit scores are calculated differently than personal credit scores. A business credit score is based on numbers from 0 to 100. The higher the number the more trustworthy a business is. It only makes sense that a start up business will have lower numbers, thus causing problems when it comes to financing and loans. This is where working capital funding strategies come in handy. Knowing these strategies can help get funding needed when most companies will turn their back because of a low credit score for a start up business.
Keep this information in mind when considering starting your own business. Start up businesses see rough years the first few years, but you can make these years more bearable if you know all the resources available to you and your business. Working capital funding strategies and other funding strategies for a start up business can help see you through these rough years and ensure that your start up business survives and flourishes. The benefits of owning your own company outweigh the risks, and these tips can help you keep a level head during the trials and come out on top.
