Questions to Ask Yourself before Getting a Small Business Funding
June 18th at 7:00pm Published by sharpshooteradmin
A small business runs on the finance that you pour in it. No small business would be able to perform well without the right finances being poured in it. For a small business to be successful, it is necessary that there be frequent growth and progression. Now, if you want growth you need external funding from parties that are willing to invest with you.
While business funding can be imperative at times, there is nothing that can harm your business more than funding that has been taken in your haste. Funding taken without due contemplation can have lasting impacts on your brand and can lead you into a state of no-return. Most brands fail to succeed when the small business funding they acquire gets a bit tough to handle for them, and they go bankrupt.
Hence, it is necessary that you develop and show good business awareness when taking funding so that all issues are kept at bay.
Here we look at some of the questions you should ask yourself before taking any business funding:
What is Your Purpose?
What is the purpose that you are taking this small business funding for? Is the purpose growth oriented or just survival oriented? The purpose you are taking the funding for can go a long way in determining whether you will be able to repay your amount of the funding or not.
If you’re taking small business funding for meeting survival needs, then you might have trouble recovering from the dip in sales to pay back the amount.
How Much Do You Need?
You should also have an idea of just exactly how much you need to fulfill the purpose you have in mind. The last thing you want is to quote an inaccurate amount for the funding and to find out later that you are short on cash.
Let’s just say you want to expand the seating in your restaurant and want small business funding for that purpose. But, if you don’t have a fair idea of how much you will need to pay, you wouldn’t be able to satisfy your funder.
Can You Repay the Funding?
Call it self-reflection or financial literacy, but you should sit down and think whether you have the ability to pay back the funding you are getting? If you cannot pay back the funding, you should preferably get some time on your hands and try to make your situation work without small business funding. Small business funding is a proper commitment and can only work when you are ready for it.
Do not go for it, if you aren’t sure whether you will be able to pay back or not.