If you are on the verge of starting a business, know that it is one of the most difficult and challenging things you can do in life. You need to spend time, energy and a lot of money (much more than your bank account balance). Surely you think you should fund it from somewhere else, right? No! It is completely wrong. It is really tempting to find an investor or a source of financing to start a business. But there are reasons why this is not expedient. be with us. By reading this article, you will find out why it is better to ignore the good of investors and do it yourself. Fund your business yourself and do not owe anyone.
1. Willingly or unwillingly, you will strengthen your entrepreneurial skills
There are many skills that you need as an entrepreneur. It is not enough to just have the skills to hire or fire people. Before doing so, you need to know your business and your customers in every way. You need to produce great products for sale and market.
Be your own salesperson and marketer before hiring a sales and marketing team
Once your business is on the roll, you will be hiring marketing and sales teams. But until then, you have to do the work of the sales and marketing team yourself. If you do not have a clear message to present to your business, even the best sales and marketing team in the world will not be able to fill this gap. If you do not develop your marketing and sales skills first, the day will come when you will have to sit down and watch how both you and your company will be destroyed.
Be your own accountant
Of course, marketing and sales are not the only skills you need to master. From the beginning, you have to be your own accountant. Practice your finances to make sure the money you spend has a positive ROI. Study the principles of direct-response marketing and try to master it so that you can have an account of every rial of your money.
If you get money from investors to finance your business, you will not be able to acquire any of these skills easily. One of the most obvious reasons is that many investors do not have an understanding of direct response marketing. You may even be asked to do things based on their opinions or prejudices that will negatively impact your return on investment. There is no choice! As long as they have control over your wallet, you will have no power to defend your ideas.
Use your personal capital to thrive and grow your business
Having a lot of money that you have not personally bothered with will make you feel comfortable. Therefore, since you do not feel any pressure, you do not make much effort to make your money profitable. You also do not want to be frustrated if you cannot get the right pitch so invest in a good capo.
These thoughts are completely wrong. Therefore, if you get the money you need for your business from somewhere beyond your means, it is possible that you will fall because of all the thoughts doomed to fail.
Of course, being a financier of your own business is not as easy as being an entrepreneur. However, it can not be considered an obstacle. Think of it as a gift or a classroom because it helps you become a stubborn entrepreneur and make a lot of money in the shortest time possible. You have no other choice. You have no way back.
2. Borrowing or partnering with a wealthy person to raise capital means losing control of your business
It doesn’t matter if you are a banker or a wealthy family friend, because in either case, you lose control of your business as soon as you reach out to them for money.
When you have a partner, you do not control the way you do business and how much you earn
Early on, everyone thinks they need a number of partners to fund their new business. Unaware that those who invest their money in other people’s business know this better than anyone. As a result, for every money you borrow from them, you have to sign contracts under which you are required to pay a certain percentage of the interest. Others may even ask for a portion of your business shares, instead of money, for which you are sweating and toiling.
You do everything but you have no control over your money. This means that you can not even decide how to do things. This is a breaking point in your business. Could you survive without the money of these investors and partners? Maybe you could, maybe not. But it is also really painful to have to hand over a business that is so valuable to you because you do not even have the power to fight it.
The partner bank is patient but daunting
The bank is no better than them. The bank lends you money and you think you have your own personal investor until you get lucky. Remember: the bank does not ask you for anything personal. That sounds great, but only if the bank lends you a small profit.
It is enough not to pay one or two installments or to top up your account on time. Then you will become so anxious that you have never felt like him before. You will not even have a good night’s sleep.
The fact is that whoever is in control of the money will be in control of the business. Therefore, in order to maintain complete control over your business, you must first have full control over your money.
3. Use what you have when it comes time to expand your business
Your business is growing rapidly. Customers expect more. Your income has increased and you have even achieved additional achievements. But that does not mean you have to spend all the extra profit of the company at once.
So what do you want to do?
Go through the “bipolar steps”
Put your hand on your knee. You withdraw from your personal account and your child’s university budget and put it into your business.
You do this because you are an entrepreneur and your only goal is to make more money and influence. Your goal is not to prove something to people who did not believe you in the past and said you would not get anywhere. We call this the “bipolar phase.” This is the moment when every entrepreneur must go beyond his personal well-being and ignore his past in order to achieve better results.
If you want more profit, leave the stock market and the bank
If your money is in the bank, how much can it cost you? The stock market or other investment methods will not be very profitable for you either. If all goes well, you may end up with 10% and if it goes very well, you will gain a little more.
But what if you could make 300% of the same amount of money? Would you do that if it were possible? It is a big decision. This is only possible with fast-growing businesses and not with “traditional” investments.
For example, suppose your business is at a critical juncture. You also know that if you expand it, the company’s work will fall on the roller coaster. Because you are confident in your entrepreneurial skills, you plan to increase your money by up to 300%. Even better, you are thinking about your own personal growth and development, and you know that, for example, you want to be the CEO of a franchise (a kind of communication network between small and independent businesses) that you have outlined for yourself for the next 5 years. .
In such a situation, using your own bank account can meet the needs of your business. But before you pull out all your savings, make sure you have a safe way to make money. In addition, you need to be aware of your income and know exactly where it comes from. Also, you should check how much it costs you to earn each rial of this income, in terms of marketing and human resources.
Bank loans are a business nightmare
If your profit margin is not enough and you do not have a plan to grow 10 times, it is better to try harder and not think about borrowing from a bank. There are many people who think that borrowing will make their dream come true in business. But the most successful business owners know that loans do not make dreams come true, they do destroy them.
Once your business foundation is strong enough and you can predict your return on investment with confidence, use your personal assets to expand it. Conscious belief and effort (not blind acceptance) is what can turn your business into an empire.