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How to Secure Funding for your Small Scale Business in Queensland?

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Understanding the key line of raising fund for a small business is a vital step. Whether you are planning to start a new business from scratch or buying an existing one, make sure you have enough financial resources to run your business without facing any hurdles. In Queensland, many novice entrepreneurs find difficulties during the post-funding phase. Being a business owner, you should secure financial resources, especially during the initial years of your new venture.

You should find a potential investor who can pour money into your business- this can be a huge achievement for you as an entrepreneur. But it is always difficult for an investor to put faith in any new venture and that’s is the reason why entrepreneurs don’t get enough financial support from banks, private equity firms, venture capitalists and other lending platforms available in Queensland. Since many startups fail within the first five years, lenders strive to stay away from them and pour their money only if they see any future prosperity. This creates obstacles in securing funds for a small business owner.

To help you secure your post-fund requirements, we bring you some useful business tips that will help you throughout your entrepreneurial journey.

Let’s get started!

Keep your Investors Updated

While arranging funds before starting a business gives the ability to scale business operations smoothly, it also provides a sense of assurance to the investor that you are heading towards the right direction. If you have raised funds from an investor, make sure you keep them updated related to your business growth, expenses, sales plan, future-prospects and market risks on a regular basis. Whether you are running a business in Gold Coast, Brisbane or any other city of Queensland, you should know how to build a healthy relationship with your investors.

Setup a reporting framework, mentioning different operational elements of your business as many private equity firms and venture capitalists ask for quarterly reports. This gives them better visibility and encourages them to put faith in your business strategies when you ask them to raise funds in the middle of your business operations.

Apart from this, it is always good to keep a regular track on your income statements, cap tables, cash flow statements and balance sheets. This helps in improving the existing operations of a business and enables you to generate more revenues

Tip: You can use a reliable accounting or project management software/tool to help you print reports quickly and easily.

Maintain Regular Bookkeeping Practices

Even if you are not seeking investors, make sure you keep a record book to account your expenses and assets. And those who are seeking investors, it is important to maintain accurate and updated financial records of your expenses and profits. This gives better clarity about your business’s health to your investor.

Up-to-date bookkeeping practices not only help you get funds during the start-up phase but also increase the chances of getting another round of financial support to fulfil your post-fund requirements. You can keep your accounting books updated so that your current investors get into your financial standings before lending money for further business operations. It also helps you manage your business credit score and gives you an insight into your business prospects.

Besides this, it is also crucial to maintain a single set of accounting books rather than multiple books. Many business owners in Queensland create more than one accounting books, and that leads to more question and trust issues in between you and your investor’s relationship.

So, make sure you engage in good bookkeeping practices to boost transparency and reliability while contacting your investor.

Categorise your Expense List

No matter how much funds you get for your new business, the first thing you do is splurging. You spend those finances on buying office furniture, latest technology and this may lead to many unnecessary expenses. Even though the expense list depends on the growth of your business, it is imperative that your direct financial resources towards value addition for main functions of your business. This means prioritising items on your expense list makes more sense when it comes to securing post-funds for your small business. You can spend money on hiring potential employees instead of buying lavish furniture.

After fulfilling your basic business requirements, you can spend money on accounting, customer service, legal requirements and branding of your business. This is where you need more financial support from your investors. If you want to get the most out of your capital, you have to keep your expense list categorised and spend only on the important things that matter to your business.

If you have successfully arranged a new line of capital, make sure you spend on your expenses more effectively – this will help you reach your business goals easily. Raising funds somehow can be managed, but the real challenge comes during the post-funding phase. Your potential investors must be looking for the higher return on their investments along with your business growth, so make sure you give them ethical reasons before asking them for financial support.

Focus on Financial Strategies

If you are concerned about your on-going expenses and finding it difficult to understand your financial requirements, then keep the two financial strategies in mind:

Debt Funding

Under this, you can borrow funds from banks and investors and pay back with interest within agreed timeframes.

Equity Finance

This strategy allows you to invest your own or other stakeholder’s funds into your business in exchange for partial ownership. This includes venture capital.

Note: Every business has different reasons for sourcing funds and makes sure you take professional advice from your business adviser before making a final decision.

Conclusion

Raising funds is not an easy thing. You need to draft a successful business plan before asking for financial resources. Whether you are starting a new business or looking to grow your existing one, it is important to create a business plan to guide your business operations. It also makes your business objectives clear to your investors and lenders and helps them know how you are going to invest in your business.

Securing capital for on-going business operations depends on how you build a relationship with your investors. The tips mentioned above will help you break down all the challenges that could occur during the post-funding phase.


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