Startups need a firm grasp of financial fundamentals. If you’re seeking funds from bankers or investors essential startup accounting records such as income statements (income and expenses) and financial projections will convince others that your business idea is worthwhile to invest in.
Startup financials usually boil down to a straightforward equation. You either have cash on hand or you’re in debt. Cash flow can be a problem for small businesses. It’s important to monitor your balance sheet and be careful not to overextend yourself.
In the beginning, you’ll likely need to look for debt or equity financing to expand your business and become profitable. Investors will review your business plan, the projected costs and revenues, and the likelihood that they’ll get the return on investment.
There are numerous ways to bootstrap a startup including obtaining the business credit card that has APR that is 0% to crowdfunding platforms for a new business. It’s important to remember that the use of credit cards or debt can affect your personal and business credit scores. It is essential to pay your debts on time.
You may also take out loans from family and friends who are willing to invest. While this might be an excellent alternative for your startup however, it is important to put the terms of any loan in writing to avoid conflicts and ensure that everyone is aware of how their contribution will impact your bottom line. If you offer someone shares in your startup, they are considered an investor. Securities law is applicable to this.
www.startuphand.org/2021/12/17/financial-startup-basics-fundraising-tips/
