Business Funding Rules to Break

Business Funding or business financing is the development through which entrepreneurs arrange money for investment for business purposes. An investment can set up a new business or finance an already established ongoing business or commercial activity.

There are three primary purposes of funding:

1. Funding a business startup
2. Financing for the progress and extension of a business
3. Dealing with unanticipated financial happenstances

Sources of Business financing

• Self-funding
• Equity
• Debt
• Term loans
• Retained earnings
• Venture funding
• Letter capital loans
• Small business loans
• Foreign financiers

Are our business funding Rules good or bad?

If you ever studied economics, accounting, or management of books in a business or trade, you would always encounter rules. Following the rules is essential in succeeding in nearly every aspect of life, particularly business; running a prosperous and growing business must abide by the rules.

But personal experiences, predictions, observations, and judgments also matter to a greater degree. These unique experiences sometimes surpass rules and general beliefs. For a fruitful outcome in business and commercial projects, one must be smart enough to make their own decisions and not blindly follow the rules.

If you ever come across a successful businessperson and ask them if they strictly adhere to business rules, their answer will be a big no. According to a study, successful entrepreneurs have patterns of risky behavior and their distinguished ways of doing business.

Business funding ‘rules’ to Break

1. Think out of the box:

Take risks and be innovative. Try to formulate your ways and calculate your equations. Do what suits you and your budget. However, be smart and rebellious. Being rebellious in business does not mean risking struggle in lawful issues. It means not thinking like everybody else. Even if the market is going down and the economy is crashing, there is nothing wrong with taking risks and facing challenges. One must be wise and not be over-confident. Instead, be prepared and get ready before taking on a new challenge. It could be risky to bring a new product out for the customers according to their likes and dislikes and criticism of the previous products through a survey or a campaign. Still, success comes at a cost, and taking a risk and experimenting with new ideas is very important.

2. Again, being risky in business is essential:

If you are not satisfied with your current growth rate in the market, there is no harm in trying some new approach and going over new horizons in business. Those who do not opt for this approach do not achieve much in life or business. The large corporations that we now see often started with minor capital investments and small-sized companies. Invest money in new projects and give your best to make the most out of them. Even if the business goes into recession, it might rise again after using effective strategies.

3. Don’t rely on your previous business history:

Suppose you think your previous business history must be flawless in commercial accounting. In that case, you are probably wrong because shareholders and investors are often not looking at your last ventures. Still, they are interested in your interesting new ideas and contemporary plans.

4. Be mindful of scammers:

Online lenders could be fake or scams sometimes, so you need to be very mindful. But that’s not always the case. There are some registered tools to find and meet online investors. Go for reasonable interest rates and keep track of when the loan is due.

5. Think long term:

It would be best always to have a long-established and high-profit-yielding business plan to meet the investors. It is again not true; exceptions are always there, though. Every shareholder has a different approach and business perspective; many are available to loan money and collect it back with some interest.

6. Don’t entirely rely on the investor’s money; create a backup:

Businesspersons often go for too much loan money to show that they require massive investment capital for their business. It is not the right approach. Financiers often have no concern about how big your business is. They are lending money to get more.

7. Don’t let failure stop you:

Never let the fear of failure stop you from doing your thing and trying out new strategies. No one in the world who ever succeeded never only failed once in their lifetime. There are always new things to learn.