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Different Ways to Finance Your Small Business Operations

The steady market growth we are seeing right now – despite the uncertainties surrounding the market itself – presents a lot of opportunities for small businesses and business owners. There are a lot of opportunities to grow and reach new heights, plus there are more market demands to support new business ventures. Now is the perfect time to invest in your own small business.

Of course, there are a lot of challenges you have to face when starting a new business and taking it off the ground. One of those challenges is financing. So, how you can you finance the new business and its operations? There are some financing options you can consider when you are just getting started.

A Self-Financed Venture

If you have been managing your personal finance meticulously, chances are you already have enough savings for a new business venture. Starting a business is not as expensive as many imagine, especially since you can now run the business as an online venture. With a simple online storefront and a home office, you can start catering to thousands of customers from across the country.

With the starting capital kept at minimum, the idea of self-financing your small business becomes an option worth considering. You can invest your own money into the business and begin earning income immediately. Even better, you retain control over your business. You will also be rewarded for the time and energy you put into growing the business.

Personal Loans

You don’t have to go straight to business loans to get the financing you need for a new business. After all, business loans have stricter requirements; you need to have a solid business plan and good credibility as an entrepreneur to get the financing you need to get started.

In most cases, applying for a personal loan is a lot easier. Using personal loans for productive purposes will offset the costs of the loan and allows you to generate more income. Besides, today’s best personal loans are not only affordable, but also very flexible.

You can get up to £100,000 in loan – sometimes bigger, depending on the lender you approach and your credit history – at a relatively low interest rate. Figure out the cost of using the loan and see if you can offset that cost with the income generated by the new business.

There is also a time delay to take into account; your business will not begin making money until it is fully operational, so you have to think about that gap too. As long as you have the basics covered, using short term loans to fund your new venture is a worthy option to consider.

Getting Investors

When you have a good business idea, you also have the option to bring in investors from the very beginning. They will finance your business idea while you invest time and energy into the business. In return, you give up a portion of the company or share the operating profits until the investments are covered.

Friends and family members are among the investors to consider. You have to think about separating professional and personal relationships with your potential investors, but friends and family members tend to be more flexible with the return they expect from their investments.
Venture capitalists or VCs are also easier to find, which means going this route is also an option worth considering. Whether investors are interested in backing you depends on your business idea and how well you present it.

Crowdfunding

In recent years, crowdfunding has become the go-to method for funding a new product. You still have to invest in developing a product that the crowd – your potential customers – would like and marketing your product idea to the right audience, but once you get the ball rolling you can get the financing you need to turn product ideas into actual products quickly.

There are a lot of crowdfunding platforms to choose from too, with Kickstarter and Indiegogo being the most popular ones for new products. Other platforms let you finance an entire business and use items like exclusive merchandise and pre-released products as the rewards offered to backers.

The big challenge in crowdfunding is convincing the audience that you have a solid product that is ready for manufacture. There have been a lot of failed crowdfunding campaigns wearing down the audience’s desire to fund projects, so you have some extra miles to go through in order to win their attention and support.

Other funding options – including business loans we mentioned earlier – are also worth considering, but these four options are certainly worth considering. The sooner you can secure a suitable financing for your new business venture, the sooner you can start operating and generating income. Once the business is started, the rest is easy from there. You have the whole market to conquer and plenty of opportunities to seize.

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How to Stay on Track with Your Monthly Budget

Having a monthly budget is one of the ways to stay true to your financial goals. When you have a budget to work with, it is easier to manage your expenses and watch your spending. After all, you know exactly how much you can afford to spend for every post or expense category each month.

Of course, having a budget to work with is only the beginning. The real challenge is sticking to that budget and now overspending month after month. To be able to stay on track with your monthly budget, here are some of the tips you can use.

Go Visual

There are a lot of money management apps on both Google Play Store and the iTunes App Store. These apps have one feature that is incredibly useful when you have a monthly budget to stick to: charts. Rather than seeing numbers, you get to see your expenses in a visual way.

Having charts or other visuals help with tracking your expenses against your monthly budget. The use of colours helps too. You know when you are close to the edge of your budget, which means you can cut back on certain expenses to even things out.

The money management apps also let you find categories where you are spending less than you think you would. These categories can be adjusted, and you don’t have to allocate as much money for them next month. The money you save can be used for other things, including investing in different instruments.

Prepare to Cut Back

With visuals helping you stay true to your monthly budget, you always know the state of your personal finance at every step. If you see your expenses on meals getting close to the limit, you can start cutting back on dining out and buying snacks. The same can be done with other expenses.

Make sure you prepare for cutbacks too. It is often easier to make those cuts and eliminate unnecessary expenses when you know you have to. It is even easier to do so when you are prepared; knowing that you can bring your own coffee to work – instead of buying a cup on your way to the office – makes actually making that change easier.

Watch What You Buy

One of the most important skills to have if you want to be the master of your personal finance is knowing how to separate needs and wants. Wants can be postponed; needs are usually essential and cannot be substituted. The better you are at separating these two, the easier it will be to stay true to your monthly budget.

You can set aside a portion of your income for wants. Rather than giving in to the impulses and making immediate purchases, tell yourself to save money for the items you want to buy. If you still want those items when you have saved enough money for them, you can go ahead and buy them without feeling guilty.

Separating needs and wants also lets you be more meticulous with your monthly budget. You can allocate money towards long-term savings and short-term goals, allowing you to control how you spend your income better.

Save on Everything

There is no amount too small to save. The more you can stay under the budgeted amount, the more money you can save and invest in the future. There are thousands of deals and special offers and they are always a couple of clicks (or taps) away thanks to deals apps and websites. Not using them is a waste of opportunities to save.

Saving £5 here and £10 there may not seem much at first, but you’ll be surprised by how much you actually save at the end of the month. You can then give yourself a small reward and save the rest for other purposes. Repeat these steps and start accumulating wealth.

Rewards

Speaking of rewarding yourself, it is also a good idea to set short-term financial goals and rewards for achieving them. If you manage to stay within budget at the end of the month, it is okay to spend the money you save on a nice dinner as a reward to yourself.

On the other hand, you also need to know how to deal with overspending. Things like an emergency or an unexpected expense can throw your monthly budget off balance. Now that there are personal loans and other financing options available, you only need to know how to best deal with the situation to stay on track.

With these tips in mind, you will find setting a budget and sticking to it easier than ever. Use an app that you are comfortable with the most, know when to cut back and how to do it without disrupting your needs, and be prepared for emergencies. Don’t forget to reward yourself for achieving short-term milestones and you will be more motivated than ever to manage your personal finance properly.