Financial Considerations
What you need to know up front

What Are Your Financial Needs
Many startup businesses sometimes must raise outside capital to fund their growth. Various sources of money are available to you at different phases of your business development, and your overall plans must be structured with this in mind. Following, are questions concerning financial need:

• Do you need more money or can you manage on your current cash flow?
• How do you define your need?
• How urgent is your need?
• How great are your risks? All businesses carry risks, and the degree of risk will affect cost and available financing alternatives.
• Where are you going to run your business? Will a home office do?
• Do you need to hire employees to help you run the business?
• In what state of development is the business? Needs are most critical during transitional stages.
• For what purposes will the capital be used? Any lender will require that capital be requested for very specific needs.
• What is the state of your industry? Depressed, stable, or growth conditions require different approaches to money needs and sources. Businesses that prosper while others are in decline will often receive better funding terms.
• What are your bookkeeping needs? Do you need an accountant?
• What taxes do you have to pay and collect?
• Is your business seasonal or cyclical? Seasonal needs for financing generally are short term. Loans advanced for cyclical industries such as construction are designed to support a business through depressed periods.
• Perhaps most importantly, how does your need for financing fit with your business plan?
• All capital sources will want to see your plan for the startup and growth of your business.

$500 Startup
Many of the business ideas shown on ideas4biz can run for less than $500 to start—money you probably already have.

Finances That May Be Required >>