Monday, 28 May 2012

How much money will you need?

Every business is different, but it is still possible to get a reasonable idea of how much cash your
business is likely to need by considering a few key factors.

Does Your Business Produce a Product or Provide a Service?

Initially, a service business will require less cash because it will not have high material and
equipment costs. If you intend to manufacture a product, you must consider the type and amount
of direct materials and equipment needed and expenses incurred.

Who Will Provide Labor?

Do you intend to do most of the work yourself or will you hire employees to assist you?
Contributing your own time to the business is one way to keep costs down. Later, when your
business is firmly established, you may wish to hire employees to take over many of the day-today
operations.

Do You Have Personal Funds to Invest in Your Business?

Almost all investors prefer or require that you contribute some of your money to the business.
This contribution of unborrowed funds is called equity. There is no fixed percentage for this equity contribution, but most lenders require at least 25 percent of the total amount needed to establish
the business. The amount of equity required is also influenced by other credit factors, such
as management experience and adequacy of collateral.

Can You Provide for Your Personal Expenses While the Business Is Getting Started?

It is unusual for a beginning business to show a profit in the first few years. It's good strategy to
plan to cover your personal living expenses for at least six months while your business is getting
started.
If your business is already operating, it may be necessary to reduce your salary while you
try to expand. If you have your own funds set aside for your personal expenses during these
periods, you will have one less expense for which you will need borrowed funds.


Why i-Fund is the solution to your start-up finance
Just think all the people you know, family, friends, former classmates everyone, they are your potential cutomers so you can approach them and ask to pre-buy your products and services in order to raise the necessary capital to start up your business.
Here are the steps on how i-City is able to help you do this.
What are you waiting for to start up your own business?
 

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