Running a startup is one of the most exciting things you are ever going to do, however, it can also be one of the toughest. One of the biggest challenges most startup entrepreneurs face is funding. It can be hard to get startups off the ground and turn a profit, which often leads to a severe lack of cash. If and when that happens to you, the worst thing you can do is panic. You need to keep your head and know that most cash flow problems can be surmounted if you’re smart. Below are some things to do when you’re ready to start funding your startup. is running out of cash.
Prioritize The Options Open to You
Sit down with a pen and piece of paper or open up a spreadsheet on your laptop. Create two columns, one for raising money and the other for selling or merging your business. Then brainstorm all of the ways you could raise money from opening a line of credit at businesslineof.credit to borrowing from friends and family. Then do the same thinking about any companies who may want to buy or merge with your business. Once you’re finished, evaluate the information and prioritize which option would be best for you. If you can think of other options (although these two are likely to be the main ones), add them to your list. You may be able to avoid doing any of this, but you need to be prepared should it become necessary.
Call in Any Debts
If you have any outstanding invoices, then really push hard to get them paid. Call up your customers and clients, send emails reminders, and if possible offer a small discount. The discount should only be offered if they are able to pay immediately.
Run a Sale
This won’t always be appropriate or even effective, but if you know that you can typically make a fair amount of money by running a sale, it’s a great way to improve your cash flow situation. Run as many sales as you can to get things back on track.
Cut Costs
It might not be easy, but letting go of staff, downsizing, or switching utility companies are good ways to cut costs. Anything you can do to reduce spending can keep your business running. Remember, it is only temporary until things pick up again. Be sure to look at your expenses and see what can be done.
Set Up Meetings
If the three ways of raising/saving money above don’t work out, it’s time to go back to your two main options: selling/merging or raising money. Schedule a series of meetings with the people you’ve identified as being interested in your company. Although you may be desperate, you shouldn’t be too hasty in accepting an offer until you’ve spoken to several people. You also should not get too downhearted when you get a few “No’s” which is almost certain to happen a few times.
Keep your chin up, don’t give up and try your hardest and there is a very good chance you’ll weather the storm and come back stronger than ever.
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