Business finance is the most crucial element of any business. Whenever we start a venture, it will need finance in two categories; one is seed capital and other is working capital. Seed capital is the funds required to start a venture, to purchase the initial fixed assets, stock and to maintain cash in hand. Working capital is the money required to carry out day to day operations effectively i.e. payment to creditors, salaries of employees and various miscellaneous expenses.
Also see: Significant Role Of Finances In Business
Business finance refer to the money raised from various internal and external sources of an organization, to manage the seed capital or fixed capital and working capital of any organization. This is one aspect of any business which can decide you and yours organization future in its early days.
Usually people tend to ignore it; they raise business finance from most easily available source. But it’s definitely not necessary the most comfortable one will be the best one also. A high rate of interest or higher risky business finance will be a burden on your organization’s balance sheet in starting, when it struggle to make profit, and can push it towards losses by increasing expenses and ultimate shut in worst case scenario as well.
The cost to raise such business finance, quantum of risk involved and its availability are few deciding factors which a business can undertake before taking final call. Also it depends on nature of your business, because not all institutions are willing to invest in every type of business. A business definitely should do through research in regards to this prior to deciding.
Your venture its development and making it reach new heights will definitely going to be a long journey, which definitely cannot be completed without necessary business finance. You must make your decision wisely so that you can save yourself from cumbersome task of going door to door regarding finance issues and rather focus on your core business operation.
Sound business finance is going to make your journey really smooth one. You will be assured of hassle free finance inflow and can plan your strategy for next financial year. Good business finance will not only stand with you in your rising days but also you’re in the time of your downfall. They will understand the situation will act as mentor and can also provide you with their expert knowledge to pull you out of tough times.
So, to conclude following should be the features of good business finance
1. Low cost of raising
2. Easy availability
3. Low risk
So, all the emerging business leaders out there, this is one most important aspect you should think and work on to while planning initial strategies of your business, cross this hurdle and come out with flying colors.