RAISING CAPITAL FOR YOUR START-UP VENTURE (3)

by Ayo Emakhiomhe

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

We will be discussing on using contracts/exchange Avenue to support your business.

Please note that all your comments are very welcome.

1.     Contract/Exchange

You can also engage in simple exchange. This is simply exchanging what you have for what you need.

This method is on the basis that there is someone out there that needs what you have and has what you need.

For example, you may be a company that deals in keeping of company accounts and needs to advertise. You can negotiate a deal with an advert company or go directly to a newspaper/magazine company and negotiate an exchange deal- your service for theirs and both of you get what you need. The main challenge will be pricing for which an amicable agreement can easily be reached.

You need to be flexible in your negotiations to secure a good deal.

Exchange will work well for both goods and service needs.

When you have a contract as a start up for which you cannot execute all on your own either due to funding or expertise, what stops you from subcontracting all or part of the job to another person/company you know is equally competent.

Doing this will only reduce your profit margin but what is usually most important is that you don’t make a loss at start-up.

Depending on the arrangement, you might need to seek your client’s permission to do this.

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

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