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6 Questions to Ask Yourself When Looking For Business Funding

The process of running a fundraising campaign for your business can be long and difficult. New businesses should expect to face many rejections before they eventually secure the money they need to up-scale or improve. 

A typical fundraising campaign can run for 6 months, but many last even longer. You can speed yours up and increase your chances of getting funding for your business by being smart about your fundraising campaign. We have detailed 6 questions you should ask yourself before you begin looking for business funding.

What type of funding is best for my business?

Although it might be tempting to target all possible types of benefactor or lender, it can be smarter to pause and think carefully about which type of funding works best for your business. Although bank loans and investors are popular choices, there are other avenues to consider.

For example, people whose business meets a common need could try launching a crowdfunding campaign. This might serve your business better, as there is no loan, and no investor who will own a percentage of your company.

Businesses that offer products could consider offering customers the ability to pre-order products. This not only raises money but shows you the level of demand for each product.

Is my cash flow forecast up-to-date?

Cash flow forecasting is when a business estimates the flow of cash in and out of a business over a set period of time. Your cash flow forecast will be based on anticipated payments and receivables.

You must make sure you can provide potential investors an up-to-date cash flow forecast. Although it does not need to be too in-depth, it should provide a thorough view of your expected costs and profits.

Do I have a viable business plan?

The business plan you provide investors and lenders should be thorough and realistic. It should show achievable goals and believable growth expectations.

Having an impressive but realistic business plan is essential to ensuring your business is valued highly. Investors will be more willing to part with their money if they see believable potential for growth. This means your targets need to be impressive but achievable. It also shows that you are aware of potential risks.

Having a detailed, strategic business plan is crucial in making sure your business is valued highly by investors. It helps potential investors to understand your plans and goals, while also demonstrating that you are aware of any risks.

Is my accounting data up-to-date?

You could work with an accountant, or by yourself, to make sure that your accounts are both thorough and current. Many lenders and investors will require accounts that stretch back one to three years. 

Which documents do I need?

As well as the documents mentioned above (accounts, cash flow forecast, business plan) your lender or investor might want to see information such as your bank statement. Always check that you have everything asked for before applying.

Should I wait longer to begin looking for investors? 

If you are currently in a period where your business is not meeting its targets, it could be worth waiting until your record boasts more successes. Lenders and investors want to see that you are achieving and even surpassing the goals you have set yourself, and as they ask for records spanning back for potentially years, sometimes it can be wise to wait.