Startup Basics – Financial Start-Up Basics
Startups require a thorough understanding of the fundamentals of finance. If you’re trying to convince investors or banks that your business idea is worthy of investment, crucial accounting records for startups like income statements (incomes and expenses) and financial forecasts can be helpful.
Startup financials typically boil down to a single equation. You have cash in your bank or you’re in debt. Cash flow can be a struggle for new businesses and it’s essential to keep an eye on your balance sheet so that you don’t overextend yourself.
As a start-up you’ll probably need to find equity or debt financing to expand your company and ensure it is profitable. Investors typically evaluate your business plan including projected costs and revenue as well as the likelihood of a return on their investment.
There are a variety of ways to bootstrap a startup such as obtaining a business credit card with APR that is 0% to crowdfunding platforms that can help you start a new business. However, it’s important to keep in mind that using debt or credit cards can harm your personal and business credit score, and you should always pay off your debt promptly.
Another option is to take money from relatives and friends who are willing to invest in your venture. While this could be a good option for your startup but you should make sure to set the terms of any loan in writing to avoid conflicts and make sure that everyone is aware of the impact of their contribution on your bottom line. In addition, if give an individual shares of your business they’re considered to be an investor and therefore need to be governed by the law of securities.
www.startuphand.org/2021/12/19/organizing-an-internet-fundraising-campaign/