The biggest reason small business entities fail is not for lack of solid business understanding or mismanagement or market demand. The main reason they fail is lack of capitalization. The reason is simple: starting a new business is deluging. There are so many things to find out, generally in a very short span of time. Unknown and unexpected expenses may spare away any initial investment capital. The main problem of a startup business is mainly the amount of money spent every day, week, and month while gaining all those vital clients, contracts or customers. Regardless the clients or customers call or not, the phones should be in service. The office should be maintained at a comfortable temperature even if nobody doesn’t shows up. Landlords don’t give a damn if you expect to double your money next month when your business starts taking off, they want the rent paid right now. Till now, the biggest problem goes to staffs and their benefits. You can’t do without the staffs you have to get off the ground running. As a businessman, you can’t take over every role and wait to fill up the important positions later. As a business owner, investment in startup business implies adequate staffing from day one. While investment in small business is considered to be a gamble, it doesn’t hurt to look around to find investment solutions. The very first thing you should do is make sure that the business is undercapitalized instead of being based on an unsustainable profit model that will keep them in trouble for years to come. You might be perplexed at how little money it takes to save a business from becoming extinct. Many of them close down over a hefty amount. If you spend your investment dollars prudently, this investment may pay off in spades.
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