How To Start A Business When You Have Limited Funding
November 22nd 2019 at 4:32pm Published by sharpshooteradmin
If you’ve come up with an exceptional business idea, but don’t have the money to start one, you may get discouraged and believe it isn’t possible. However, starting a business when you have no money is feasible if you go about it the right way.
At SharpShooter Funding, we are experts in financing and know that a small business funding can launch that business that you are so passionate about creating. We’ve put together a guide on how you can start a business when your funding is limited.
Put Aside At Least Six Months’ Worth of Expenses
You may have spent a lot of time saving money and setting it aside. However, if you have built up some savings over the years, do not simply rush in to starting a new business. Instead, come up with a business plan where you determine how much you’ll need to spend and how much revenue you expect to come in.
You must be honest with yourself and set a realistic estimate of how long it will take for you to generate profits. As a general rule of thumb, it takes about six months to several years to make a profit off your business, which means you’ll need to be able to cover at least six months’ worth of expenses in advance.
How Do You Acquire the Funds?
There are many ways to generate start-up capital, and while applying for traditional bank funding is one option, we believe most new businesses are better served by working capital funding. But what are working capital funding and how can they help your business? These types of funding are highly advantageous, as they help you plan for unpredictable revenue, ensuring you can meet costs for your business’ daily operations.
When it comes to small business funding vs big banks small business funding are a more convenient option, as traditional funders are often less flexible in their requirements. In contrast, our services at SharpShooter Funding are more convenient because we offer all kinds of funding for people starting new businesses that are looking to cover their bases. When you apply for funding online with SharpShooter, you can expect quicker approval times, a simple application process, favorable payment terms, as well as more possibilities for your business.
To get into specifics, traditional banks have an approval rating somewhere between 13% and 20%. With our online funding application process, our approval rates are much higher, ranging between 61% and 64%. You can also expect your application to be approved within 24 hours or less, whereas big banks can take months to approve your funding.
Big banks are also more rigid in their repayment options, while ours cater to small businesses and their needs. We also value the customer service process, which is why our expert team offers specialized funding products specific to your company.
Use Funds to Your Advantage
If you do go with a short-term funding with a private funding company like SharpShooter, you’ll want to use your acquired funds to your best advantage. Determine how much funding you will require, and the proposed amount of your funding.
When you plan correctly for your funding, you’ll be able to provide the most accurate amount when asking for the capital that your business needs. Knowing the numbers is crucial so you can determine how much money you will need for inventory and hiring staff. It’s also essential to anticipate your return on investment and predict any business operations that will change as you grow.
Timing is everything when you want to pursue funding. If you wait too long, then you could face emergency cash issues that you need to expand your business. Luckily, when you apply for small business funding with SharpShooter, you can receive funds in less than 24 hours for any immediate cash issues.
Avoid Using Personal Credit
If you have limited funding for your business, using your personal credit for business costs can easily put you at a disadvantage. While it may feel like a tempting idea to use your personal credit to get your business started, it’s essential to start using business credit instead.
One reason why not using your personal credit is so important is because you can set it up as an LLC or corporation, as well as protect your assets and liability for any debts incurred. You can only do this by not mixing your personal and business funds, assets, or credit files.
Tax season can get complicated when you file taxes as a business owner. If you use your personal credit with your business expenses, then you will have to go through your statements and determine what a personal expense was and what was a business expense, which can be a daunting process. It can also open you up to potential legal issues or financial penalties if you make any errors.
One benefit of avoiding using personal credit is that you can build business credit. Even though we don’t require you to have a good credit score when you apply for one of our small business funding, it’s always good practice to improve your credit score for future business transactions.
Another option you need to consider is to look beyond the bank. When first starting, many business owners seek funding from the bank where they have their business accounts. However, this strategy is not practical because your business needs to have been operating for a few years, your credit has to be high, and a bank may not be willing to give you larger funding. Young businesses benefit more from small business funding from funders like ours.
If you’re starting a business with limited funding, you still have many possibilities to consider to get your business off the ground. At SharpShooter Funding, we help our clients with small businesses get started by providing them with convenient, flexible, and fast funding solutions.
People who own small businesses also enjoy working with us because we have no hidden costs or charges and require no collateral, and provide the cash flow necessary to convert your business into a profitable one. We believe in being transparent with our customers so we can build trust when helping you grow your business.