According to a study, 79% of businesses fail due to starting out with too little money. Despite many entrepreneurs not wanting to go into debt, a new startup business loan can be beneficial. Some of the saddest experiences I have is when I meet with an entrepreneur who has a beautiful business idea. The customers are just starting to trickle in, but the business owner isn’t earning enough revenue to be profitable. They’ve come to me because they’ve invested everything they have into the business. They may have diminished their savings, blown through their retirement… all on the belief they can make their dream business happen. They’re looking to me to help them because their business is on the verge of closing and they’re hoping I can find the money for them to continue until they get through the startup phase and become profitable.
It’s an awful situation, because they’ve proven they can get customers. However, their business is still going under. What’s worse, they’ve created a track record of having a non-profitable business. They’ve shown they didn’t plan. Neither of these aspects are great for getting funding. Investors typically don’t want to put money into a failing business.
I don’t want you to be in a place where you’ve spent your cash reserve and still find you don’t have enough to sustain your business. No one goes into business to fail. However, if you don’t plan properly and don’t put into place the pieces to be successful, failure can definitely be the future of your business. Instead, put yourself in the position to succeed. It is so much easier to start your business right than to go back and repair damage that’s already been done. With that in mind, let’s talk about the benefits.
Most businesses don’t start out booming. When you make the ask for a new startup business loan, you can allocate a portion of your funding toward working capital. This working capital can be used to help you get through the leaner times of starting your new business.
When you start your business, you want to have EVERYTHING you need to properly serve your customers and clients. You can certainly skimp, but why make that kind of first impression? A new startup business loan can help you obtain all you need to provide the quality services you want to give.
Peace of Mind
Starting a business is stressful as it is. And not having enough money to properly run it, and you’re looking at a miserable situation. A new startup business loan can help alleviate some of those cash flow issues that could cause you to lay awake at night.
I mentioned individuals coming to me when they’re business is just starting to make some progress but not enough to be profitable. If they’d started with extra cushion, they could have reserved a bit of fund to help them through the tough times. In essence, it buys you a bit of time to get your business stable and profitable.
By starting with the right amount of funds and having a clear financial plan, you can leverage your money and double your capital and in some cases even 10x the funds you have. The alternative is starting underfunded and joining the ranks of businesses that fail due to having too little money. Curious on how you can get your business funded? Check out our New Business Funding Services.