Venture Start Up: Finance Options

As an astute business mind you may come up with a perspicacious idea to promulgate your existing business or start an altogether new business venture. Well! flourishing the existing one may not seem to be that challenging as it is when you are to start a new venture. The success of your business plan considerably depends on : To what extent your idea or business plan is insightful. That means it has to be viable and clear and should have the capacity to pique the interest of the investors so that your idea does not go to dirt because of the scarcity of capital or resources. To discuss a little about your business idea:

• It should be insightful and viable for influencing and making the investors to not only think but invest on it.
• Your business plan must dictate every step from starting to earning profit very clearly.
• There must be sufficient space for explaining your plans to pay the borrowings back to the lenders or investors.
• The strategy you are going to pursue in order to achieve your set goals has to be clearly explained.
• The audience you are going to target and the competitors you are going to compete with must also be clearly understandable form your business plan chart.
• Moreover the objectives of the venture you are planning to set up, should be showcased via your business plan.

In this way the more powerful and effective your business plan will be the more it will attract in terms of investment required to be invested in order to shape your business idea into a real business venture.

In case scarcity of financial resources is compelling you to put your great business plan or idea on hold, you may opt for any of the following options:

Your Own Funds

Market experts consider it the most convenient financing option as you are the one who understands your new venture and existing status the best. Thus, choosing the financing options also relies on you. You can use your savings for the fund. In other case, you can even sell or take credit on your personal assets, such as: mutual fund, property, etc.

Banks

Banks usually provide the financial support to the small businesses. However, no one in the market stands to bear loss and that is why banks are likely to play safe. They prefer to rely on your business history and expected future. Support from the banks can only be attained by proving that you are able to replay.

Leasing: 

 

Leasing is also an easily available and feasible means of financing your new venture. Needs of computer, office tools, phone system, building, etc. can be availed on lease to reduce the startup cost. However, on a later stage when your business flourishes, you can always think of owning them.

Business Credit Cards

These can be considered as one of the most readily available means to finance your start up and get it running. It is very beneficial and less burdensome, because the minimum payment amount is very less on credit cards. These may work as saviors, in case a lot of money is not coming in via your newly started up business venture and you are able to pay back a very little amount every month.

However, the other side of using credit cards may not be that lucrative, since in case of inability to pay the interest rates and cost get on building up and up. The other drawback is - it is always on your head untill and unless you do not pay the whole amount back.

Angel Investors

Angels are considered as the paragons of virtue. Angel investors are usually those investors who possess an abundant amount of money and are willing to invest it on the business for making it run rather making profit out of it. Retired entrepreneur or the family members of a business tycoon who possess enormous capital can also be such angel investors. Such kind of investors may look for twenty to twenty five percent returns on their investment and can prove very beneficial for your business as they usually possess great experience in business. Big companies like Google as well was supported by such angel investors in its starting up time.

Venture Capitalists

Unlike Angel Investors, Venture Capitalists are considered to be profit oriented and they usually invest in a business which they find to be already in profit and possess higher rate of return on investment(ROI). In simpler words Venture Capitalists are profit oriented and they can be lured only if you can promise for great returns in a short span of time.

These kind of investors are generally limited to certain kind of businesses so they possess great knowledge in forecasting about the possible success of your product in the market. Hence, they can assist you when it comes about strategic management of your business.

Winning a Contest

Your luck can also play a vital role in case you try it out for winning a contest and earning via winning it to finance your new business venture.

There are different kinds of business plan competitions in the market now a days, that offer a handsome amount as the winning prize. This kind of cash prize can really help you with your business plan or idea and scale your product. You also get a chance to meet great business minds during the competition that means you get certain great ideas from them apart from the handsome cash prize.

Crowdfunding

Crowdfunding is an online way to gaining attention for your project, ideas, product, cause, experience, etc. Every individual on the crowdfunding platform acts as an individual investor who invests on the basis of his own choice and liking. This practice helps you raise the fund from other users available on the crowdfunding platform to support the project. So, in a brief description one can call it a collaboration of three parties; one who presents the idea/project, the supporters (or crowd), and the crowdfunding platform (or an intermediate link between crowd and presenter).

Presales of Your Product

Presale of your product is a really effective way to accumulate the amount of money required to use as seed money for any business plan. The task of presale starts right from contacting a customer and ends up at his acquisition as your customer, in simpler words at the sale of the product. The biggest challenge in this direction is to define the delivery time and forecast the exact number to be presold.

To encapsulate, there are end number of ways, means or methods via which you can raise the funds and arrange the seed money required to start a new business venture. Above all the end result depends on the strength of your idea and the strategies opted for shaping that idea into a business set up.

Financial Re-Engineering

The technological advancement has not only shaped the technical, mechanical and electrical markets and innovations, but also the ways of handling the financial problems of any organization, sector, or market. Now the term engineering is not merely attached to technical things, but with financial as well. Financial engineering is a very popular term and very tough to take a hold on. Financial Engineering is actually using the technical aids in the form of mathematical techniques, statistics, computer science etc. to produce applicable, innovative and reliable solution for financial problems. Investment banks and other organization that somewhere deal with finance use financial engineering/quantitative analysis as regular users.

Increase in number, variety and complexity level of financial problems gave rise to the need of - Financial Re- engineering. As the name suggests, Financial Re Engineering is basically the redesigning the process and structure of a business or organization to stimulate the saturated financial growth positively and reduce the production cost or other cost effectively.

Financial Re-engineering can also be termed as:

Financial Restructuring:
Rebuilding or re constructing the financial structure can be considered as financial restructuring. It is very important to enhance the financial performance of any financial structure.

Corporate Restructuring:

It is all about restructuring the existing plans, policies, process and people in order to set the new benchmarks or achieve a defined set of goals and that too on a sustainable basis.

However, to achieve the best targets while implementing Re- Engineering, it is very important to take care of the following points:

• It is very important to focus on the organization of results, instead of tasks
• Once you think of opting for Financial Re Engineering it is very important to first identifying and prioritizing the processes of your organization. Then on the basis of the urgency it should be implemented for those processes.
• When it comes about resources, it is must to control and use them properly, even when these are dispersed, geographically. Treat geographically dispersed resources as though they were centralized.
• Apart from integrated results of different activities, these must go parallel
• Above all proper control and management of every plan and activity is very crucial to implement Financial re Engineering.

Reasons that promulgate Financial Re-engineering can be many, to mention a few:

• Increased level of external competition for an organization in the market
• Either large companies lose market share or expand their market share there would be a sure shot change in the market share of small companies. In other words in case of erosion of market share Financial Re engineering becomes must.
• When there is increased number of market opportunities.
• Continuous Poor financial performance of an organization
• There can be different reasons that require and demand the re-cementing of the financial structure or process structure of an organization in order to enhance the financial performance and efficiency.

Financial Re-engineering possesses a set of objectives, which can be:

• To enhance the productivity and veracity of the existing data capture
• To reinforce the new framework for the budget of the company
• To reduce the cost and delivery cycle for any process
• To formulate an altogether new team to perform a specific process
• To innovate and introduce the financial structures that facilitates the future project costing.
• To organize around the different processes for better performance
• To eliminate or minimize the number of teams for a process.
• To create product and service opportunities by understanding the needs of customers in a better way and creating better standards for the products.

In this way Financial Re-engineering eases the analysis and access benefit and piques better decision making for a continuous financial improvement along with a sound risk management. It minimizes the resources` consumption, envisions new strategies for accomplishing processes and ensures maximum customer value.