Tag: money

The idea of starting a is exciting. But this only lasts for a while till you dwell on the nitty-gritty details of funding the business, operating it and so on. Raising capital is one of the biggest challenges faced by startups. You may have a brilliant business idea, but where you decide to get the capital from may determine the success or failure of your new adventure. If you are looking to become an entrepreneur, here are the best ways of raising money when starting a business.

Self-Financing

If you are in a position to get the money you need to start the business, then this is the best option for you. If you have personal savings, then channel them into starting the business. You may also self-finance the business by selling personal assets. Although you risk losing everything, it gives you peace of mind knowing that should the worst happen to the business, and no one will come knocking on your door asking for their money back.

Friends and Family

This is a popular yet highly effective way of raising money for a business. The ones close to you are the ones likely to believe in your abilities and the business idea and vision more than anyone else. Structure the funding in a manner that those who invest will get a share of the profits before you repay back their money. Some of your good friends and family may be willing to give you money without expecting it back as a way of empowering you. Take advantage of this!

What makes this a good way of raising funds when starting a business is that even if the business struggles, your family and friends are less likely to auction the business to recoup their investment. However, this also puts you in a tough position as you may lose relationships you have cultivated for years in a case where you fail to keep your word.

Angel Investors

These are entrepreneurs who have made their money, and they are looking for startups to invest their money in. Some of the world’s most successful businesses received their start-up money from angel investing. This is a great way of raising money as you get more than the cash. The investors give you advice on how to make the business successful, and they also act as an excellent channel for networking with potential clients. Look for angel investors who focus on the industry you are in and pitch your business idea.

Business Partner

You may lack the money, but know someone who has it. A business partner can be a driving force on the success of your business besides giving you the money. Choose a partner whose vision for the company is in line with yours. Ensure that you have all the agreements written down.

Venture Capital

Venture capitalists invest their money in businesses which are just starting with high growth potential. Most of them will request for equity in exchange for the money. The …

Creating a budget is easy, but creating a good budget needs extra work and dedication. Whether you are creating the budget for yourself, your business, or any other endeavor, there are things you need to do to ensure that it is a success. Here are tips to guide you in creating a good budget.

Know Your Income

Even though this might seem obvious, those who don’t have a formal job may not exactly know their net income. Knowing one’s income is helpful in creating a good budget. Your net income is what you get after subtracting mandatory deductions such as 401(k), taxes, Social Security, etc. from your gross income.

Your net income is what you will use in creating your budget. If you have additional income from freelancing, a second job, etc. add it to the net income. If you don’t have a formal job, then you need to track the average of what you earn monthly and use that as the net income.

Review Regularly

From time to time have a look at the goals you set and see how much you have accomplished. This will not only help you stay in tracking your expenses but also inform you of the other adjustments you need to make.

Having helps you have a healthy relationship with your money. These tips will definitely guide you in achieving this.

Track Your Expenses

It is necessary for you to know where your money goes. Doing this helps you know where to make adjustments and motivate you to reduce your spending. List all fixed expenses such as rent, school fees, mortgage, loan, etc. You are less likely to cut your spending on these, but understanding how much you spend on them is helpful in your budget-making process.

Next, list all the variable expenses such as food, entertainment, and utility bills. This is where you will be able to cut your expenses. Use your bank statement to make it easier for you to calculate these expenses. You might be surprised by how much you spend eating out while you could spend less by cooking at home from time to time.

After this, buy a notebook or create a spreadsheet and always record your daily spending so as to stay on top of your budget. Having to note the expenses down will make you have second thoughts before making an impulse purchase. Subtract your monthly expenses from the monthly income. The balance is your overage if positive and shortfall if negative.

List Your Goals

Categorize your financial goals into long-term and short-term goals. Short-term goals are those taking less than 12 months to be accomplished, while the rest are long-term goals. Goals are bound to change from time to time, but knowing what your priorities are will help you in making your budget allocations.

This knowledge also acts as a driving force for you to cut your spending. Set realistic goals on savings and debt payoffs. If you have a shortfall, you will first …