4 mistakes to avoid when funding a business

[Augusta]

A business will always need to start or expand it. it is always good to take precautions when trying to fund your business to avoid regretting at the end of the day.

So what are the mistakes to avoid as you fund your business

Avoid pumping in too much money too quickly: This is mostly for a new business. Don't put in all your estimated capital at once. You don't know the pitholes awaiting you. So apply caution and be sure of safety before pumping in more money into the business

Avoid funding your business with funds that the interest on it, is very high. You might not get much from this funding style.

Don't fund your business with money that the repayment period is almost immediate. You might just collapse the business before you get started.

Avoid funding a business with a huge amount that you wouldn't be present to oversee for a period of time.

What do you think?

 

[Mika]

First of all, you need to be clear on what you want to become: an entrepreneur or a businessman/woman; or, want to start a business or startup. Being an entrepreneur is not just about making money, it is all about social change, being a businessman is all about making profits. Once you have set your priorities, you can start building funds for your business or startup. Whether you should invest a lot of money at once or gradually increase investment in your business depends on a lot of things. For example, if you have products that have the potential to go viral, investing a lot of money at once might be better than investing gradually. If you are getting a loan for your start-up try to get a long-term loan instead of a short-term loan, also avoid a high-interest loan. Instead of funding your business through a loan try to find a venture capitalist.

 

[Rubz]

I totally agree with you. In my opinion, business especially small scale businesses are better funded by one's personal savings. Borrowing money to start up a business often contributes to the failure of a business because most times the interest rates attached are usually too high or the business owner is focused on returning back the money borrowed instead of growing the business.

 

[Abigael]

Those are truly the big mistakes that one should avoid when funding a new business. These mistakes are so easy to look over yet they really affect the business. They could make your business fail before you even get started on it. So you should take caution a lot before starting the business.

Pumping too much money into a startup may seem like the right move to take but more often than not, you are not taking the future into consideration. I think business growth should be gradual and exponential. You don't just wake up and succeed. So invest a little and give effort to make as much profit from it as possible. Then keep expanding from there.

It is common knowledge that taking loan for startups is a very risky move. You need to look at so many things when deciding that. This includes;

• The amount of interest to be paid.
• The repayment date.
• Your familiarity with the business.
• Your ability to pay the loan using another source.

 

[King bell]

When you're trying to get your startup off the ground, it's important to know what pitfalls are awaiting. In this blog post we'll take a look at some common mistakes that entrepreneurs and aspiring business owners make when funding their startup. To avoid spending all your money on an idea that's dead-on-arrival, these four mistakes can be avoided before they bring your project down with them.

1) Picking an idea that doesn't have legs - It sounds counterintuitive, but it's worth being specific in the early stages of a business plan if you have any hope of succeeding. It's easy to be swayed by a good idea, but you need to make sure that the idea is an area of business that you want to spend your career in. If you're having doubts about your startup even before it gets off the ground, it'll only take a few short months for those doubts to become full-fledged concerns and then finally, outright doubt.

2) Picking an idea that isn't yours - It might have worked out well for Marissa Mayer (a Google executive who was named CEO of Yahoo! in 2012) when she brought Google's advertising model over to her previous employer, but not every instance of bringing another idea over will work out this well.

3. Thinking banks care about your idea or passion more than your capability to execute it well
4. Hiring people that don't share the same vision or values as you do."

 

[Kennysplash]

Don't start a business with a loan. You are already at disadvantage, when you should be thinking of how to improve your business and take it to the next level, you are thinking of what to do about the pending loan repayment. And there is the outrageous interests as well. It should be your very last resort, which you should think about well before you make the decision. There are some other ways to come up with money for your business, like working for some time, family and close friends, grants etc. There are various examples of businesses that folded up and some were even taken over all because of loan. It's better you wait it out than to put yourself in that horrible situation.