Up with a kicky service, a mettlesome product or ardent about your hot new idea? But wondering at what point should you seek funding to take your enterprise to mart. It is an incessant job, usually seen as a challenge for every venture.
The first question you need to ask yourself is “ Does my startup need an investor ? ”We all know that most of the investors need corroboration and some alluring before they take any step. Investors gamble on the future of your startup. What you have do so far is not weighty for them. At the same time, don’t think maiden luring is not significant. Having a briskly pace of growing customers substantiates the investor. It shows the treasure hidden in your product. This will impassion the investor as risk of gambling will decline. Investor’s anticipation for the product will increase. For the startup’s momentum, it will add the demanding spark.
To lower the risk of the investor, you can induce some initial return before you reach out to an investor. This is just a ladder, where you have to climb and strive for success. And every step you climb, you leave some percent of risk that is revolving around your venture.
To reduce this risk, one needs to tick on all the bullets of your ‘things to do’ list
- Create a team
- Develop a product
- Procure users
- Keep track on Profits
- Nurture Growth
- Attain Positive Cashflow
Keeping track on cashflow is decisive and it’s management is crucial too. It will help you to regulate the sustainability of your startup.
Trends, Hype, Big potential acquirers or luck are one side of the coin. They are very much temporary. But, perpetual cash flow will lead your business to another level. Destitute management of cashflow will spurn the investors.
Now the question arises “How to maintain a sturdy, positive cashflow and sail your boat?”
It’s not that easy but resolute vision can become effective. Below are some key points that can be helpful :
Adopt Profit Yielding Practices
It is rightly said ‘ Create opportunities for yourself instead of waiting for them to knock at your doorstep’. In the same way, you need to create value of your employees and customers with resources available to you.
“Why aren’t we able to fulfill our orders?”
” Are we in need of more employees? ”
” How to monitor our cashflow ?”
These are some questions which you need to address efficiently so as to elevate the value of your venture.
After magnifying all the processes within your venture, pinpoint the wasteful and logjam areas. This will not only increase your productivity but also enhance your cashflow effectively. You also need to monitor your expenses, which will automatically solve out the issues related to inventory management.
Sort out Payment Problems
As per a survey of 40 million invoices, 64% of small ventures are affected due to delay of their payments. It clearly reflects that the account receivable are creating problems for the small ventures. Wondering how to subdue this?
Make a record of those customers who delay payments. Frame sturdy and clear policies and penalties for all the late payments. With some handy softwares you can send auto-reminders to your clients.
Monitor your Cashflow
Monitoring the cashflow is one of the most important thing to do. It becomes more significant when due to some reasons you are unable to pay your bills in time. Tracking your cashflow helps to mollify this issue. It gives a clear account of what expenses are paid or whether there’s inflow our outflow of cash. So, maintaining and monitoring cashflow is influencial on your part.
Mindset of the investors about Cashflow
Cashflow unveils the health of your business. An investor easily judges your DSCR i.e Debt- Service Coverage Ratio. It shows the proportion of your treasure with respect to your debt. To reckon your DSCR you need to divide Annual net operating income by total debt service. This ratio’s prequisite differs from investor to investor.
Here’s a hard hitting fact – In spite of taking all the steps to attract the investors you may still face rejections. You’ll hear a lot of “NO’s” but remember all that matters is one “YES” . So keep working hard until your name is synonym to Success.