RAISING CAPITAL FOR YOUR START-UP VENTURE (4)

By Ayo Emakhiomhe.
http://www.coinboxbusinessservi
 

We continue our discourse on raising finance for your business at start-up.

We will be discussing on using credit lines to support your business.

Please note that all your comments are very welcome.

1.     Credit lines

This is very common in retail businesses. This is about establishing a line of credit with your suppliers/bankers.

What you do is agree a period of payment for goods supplied to you with your supplier. It might be for 5 days, 15 days, or even as much as 180days. What it means is that for the defined period, you do not need to pay for goods supplied to you but you can sell the goods and put good use to the money to generate further income before paying for the goods and getting more supplies. This eases the need to pay cash for goods bought and helps you run such aspect of your business without using your cash.

To achieve this, you must have had a good credit history and you must be highly disciplined and focused so as not to misuse your supplier’s funds.

You can also negotiate a temporary overdraft with your banker to assist you with short term funding of your business needs. This allows you access to more cash to run your business activities.

To employ any of the methods outline above, you must have already done your research/feasibility study and prepared a business plan. If you have not, please prepare that first before deciding which method or combination of methods will best suit your business plan and needs. If you do not have a business plan, you are like a blind man that wants to run a marathon with lots of dangerous obstacle courses and your competitors are fully sighted while you have not the slightest idea of the track.

Also, always Endeavor to start small; Even if you have all the capital to hit the high market with your product or service. Always start with just a small test first. Do a Test run of your venture before slowly releasing funds to grow it to size. By doing this you will see any small problems that otherwise would have been hidden by large outlays and your mistakes and losses will be small. Also, backing out if necessary will be at minimal loss/damage.

The author can be reached at coinboxlimited@gmail.com or 2348023526682

www.coinboxng.com

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