SOURCE OF FINANCE

How to get investment ?

To set up a business the  most important thing is finance . Due to lack of finance many people are not able to turn their business ideas to reality .

Therefore here are the ways you can use to finance you business :

If somehow you are already an owner of an enterprise , you can use retain profit to re-invest in new project . This will be an advantage as it is an internal source therefore there is no interest associate with . We also have other internal source of finance like reduction of working capital and sales of assets.

Reduction of working capital and sales of assets can be a way to raise finance to invest in the business . By using this method the business will not have  to pay interest rate and will be known as a lowly geared business.

However if you are about to start a business the best way  to get finance is to used the external source of finance that is to negotiate loan from bank like ICICI Bank . But by using this method the business will need to pay a monthly interest which will increase the cost of the business. In addition if the buisness is a highly geared business there may be a high chance that they will not get a loan.

Moreover , the  entrepreneur may decide to invest in the share capital of a company, founded for the purpose of forming the start-up. This is the  common way of getting finance to start a business. The founder provides all the share capital of the company, retaining a total control all over the business.

The benefits of investing in share capital are covered in the section on business structure. The key point to note here is that the entrepreneur may be using a different of personal sources to invest in the shares. Once the investment has been made, it is the company that owns the money provided. The shareholder obtains a return on this investment through dividends and the value of the business 

In addition , leasing fixed assets conserves cash for working capital to cover business expenses which is generally tougher to finance, especially for an unproven business. However a businessman should not put so much money down that you end up spending the same amount of cash as you would have had you bought the asset with a down payment. The cost of a lease may be slightly higher than bank financing as we will not have to pay any interest to the bank and we will not be a highly geared business  but the cost of the down payment you did not have to make is likely to be less painful than the dilution you suffer from giving away equity

Starter can also negotiate subsidies and grant from the government to finance their business .

New entrepreneur can also get financial support by billionaire in Dubai . Startuphearo.com is a site where people can get financial support if they have a successful business ideas.It is a website which is control by th founder of sellanycar.com "Saygin Yalcin " and his team. However  to be financed by the billionaire the idea must be a good one otherwise there may be a hight chance of getting rejected . Try your luck you might be the next startup hero.

Website : www.startuphero.com

Startup hero review : https://youtu.be/onkVIX0xhTs

Credit : BI