Financing for the New Business Year: A Start-up Company Perspective
For the majority of people, the New Year symbolises a clean slate — an opportunity to change and improve throughout a full calendar year. But, for businesses new and old, the New Year does not, and should not, represent a clean slate at all — decisions within each new calendar year must be consistent with all previous good work. Wiping the slate clean would be a waste of an opportunity to improve, since all successful businesses are built on failures more than they are on successes.
Doomed to Fail
Of course, the industry’s veteran players have stockpiles upon stockpiles of documents guiding their future decisions, not to mention the learned executives at the helm of the entire operation. New businesses tend to have a shortage of both, and a recent report by Crowdfinders, a crowd funding business, displays just how much greenhorn entrepreneurs do not know when it comes to accessing finance.
The survey showed that across all age groups, nearly half (45 per cent) of the respondents had no idea where to find funding, with the younger respondents (ages 18 – 34) expressing bringing the number up to 52 per cent.
Set to Succeed
Professionals from Corporate and Medical Finance Ltd clarify that these numbers do not necessarily correlate to every new venture’s likelihood of failure, but rather the number of steps each owner must take to gain the knowledge and tenacity to run a financially stable company. They say that financial literacy is best learned through practical means, and filing for bank loans, making investments and dealing with grants is arguably the best way to go about it.
The question of whether new companies trust the financing providers is another issue, however. According to the Crowdfinders survey, as many as 68 per cent of all respondents preferred dipping into their personal savings instead of turning banks or other lending institutions. The ‘Friends and Family’ route came up as the most popular means of raising capital, and understandably so, from a mere psychological and comfort zone perspective.
The process of raising money for a new business in the New Year is riddled with its own unique obstacles. But, one could say that these difficulties are necessary to groom new entrepreneurs before entering the highly competitive, mostly unforgiving modern market.