7.22.2013

Still Using Your Savings?

Unless there's a grant, loan or investor involved, most businesses start out using the savings of their founder(s). While this is often a necessary step, it's important to determine:

1. When You'll Cut Your Business Off: Just like an external source of funding, there needs to be some kind of cut-off point, when it comes to funding a business with personal savings. Whether it's a few months or a few years down the line, it's important to set a firm date, to stop you from going broke and also motivate you to get things going with your business.

2. How You'll Know if Your Investment is Successful: Set metrics to help determine if the money that you've invested in a business is yielding the results that you expected. If you've invested in inventory for example, how many more orders are you able to fulfill and how much inventory is left over at the end of the month?

3. Where the Rest of the Money is Coming From: Cutting your business off so to speak is important, but where will the money to sustain and grow your business come from after that? The answer should hopefully be from the revenue you generate selling a product or service. If your business however needs a bit more time to start generating enough money, or you're running a non-profit, then you need to start looking into external sources like grants, loans and investments.
 Remember though that regardless of where the money comes from, you'll need to figure out how to hold yourself accountable.

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