Startups need a firm grasp of financial fundamentals. If you want to convince investors or banks that your business idea deserves investment, the most important accounting records for startups like income statements (incomes and expenses) and financial forecasts can help.
Startup finances often boil down to a simple equation. You either have cash on hand or you’re in debt. Cash flow can be a problem for new businesses and it’s vital to monitor your balance sheet to ensure that you don’t overexert yourself.
You’ll need equity or debt funding to grow and make your business profitable. Investors will typically look at your business plan including projected costs and revenue, and the likelihood of a return on their investment.
There are a variety of ways to fund your start-up. From getting business cards with an introductory 0% APR period to crowdfunding platforms, there are plenty of options. It is important to note that the use of credit cards or debt may affect your personal and company credit score. Therefore, you must always pay off your debt promptly.
You can also borrow money from family and friends who are willing to invest. While this might be the best option for your startup however, you must put the conditions of any loan in writing to avoid conflicts and ensure that everyone understands the impact of their contribution www.startuphand.org/ on your bottom line. If you offer an individual shares in your company they are considered to be an investor. Securities law applies to this.
