Tips For Preparing Financing To Build A Business

Tips For Preparing Financing To Build A Business – You want to build a new business, but are still confused about financing issues? If so, keep reading! In this article, we will give you tips on how to prepare for Financing to build a business in the right way. New entrepreneurs usually ask, “how much financing should I prepare?”

To answer that, first know what costs are needed to build your business. Shop rentals, purchase of furniture, product stock, monthly operational estimates and so on, you need to be detailed in as much detail as possible.

Types Of Financing To Build A Business

In calculating the budget, you can group each cost into 3 different types of business financing, namely:

Initial Investment Financing

That is the cost you spend on the purchase of business assets. These assets can be in the form of a product window, a table, a cash register computer set, paying for store interior & exterior renovation services and so on.

Work Financing

Are all the products that you want to sell or it could be raw materials for production for businesses engaged in manufacturing.

Operational Financing

Represents monthly or annual routine costs such as electricity, water, internet, shop rent, employee salaries, and so on. In this case, you can calculate regular costs for the next 3 months, 6 months, up to 12 months. Initial investment financing and work financing are the largest financing in building a business. So, you need to calculate carefully.

How To Find The Most Common Business Financing

The following are the most widely used ways to find business financing:

Using Personal Savings

If possible, the first method is most recommended. By using personal money, you will not be burdened by debt installments in the future. The next advantage, the business you build will be entirely yours. There is no distribution of profits to any party. All operating profit 100% goes to your pocket. However, if the available savings are not enough, then the best solution is to sell assets.

Selling Personal Assets

Re-evaluate your less productive assets. Idle land, cars, jewelry, machinery and so on are some examples of assets that you can evaluate to be transferred as business financing. If it is not possible to sell assets, then the next way you need to find external financing from other parties.

Looking For A Business Financing Loan

As a first step, the closest people from relatives, friends and co-workers are the first people you can contact. However, if this is not possible, you can alternatively use a business financing loan service to many financial institutions in Indonesia. Using financing from borrowing has advantages and disadvantages. So, you need to consider it carefully.

Looking For Investors

Another solution to borrowing is to invite investors to finance your business. This method is more profitable than borrowing, because the business risk will be shared by you and the investor. However, you should have as detailed an agreement as possible with the investor to avoid disputes in the future.

 

 

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