Finances

Systematically planning your finances helps to fish out, intime problems and eliminate them. Your budget depends on the branch you wish to setup. It is reasonable to make enquires from institutes and ministries specialised in your branch in order to get accurate estimate of cost to be incurred. Your initial capital should include non-recurring expenditures like cost of office equipments or cost of manufacturing facilities. Also turnovers are one of the important planning figures for your business.This does not only include goods, personnel, rent, ect. but also includes insurances like pension and health scheme. Routine expenses and earnings are considered as liquidity planning. Draw up a profit and loss plan of your business for the next few years. How much capital are you going to invest yourself and how much from external sources?

It is often difficult to get a loan from a bank without you having an initial capital. A net asset or equity shows you are ready to take a risk and that you are very certain about your business idea. The amount of capital you provide, determines the amount you get from the bank. A loan will be granted, after evaluating your anticipated financial needs and your available personal capital. Alternatively you could look for an entrepreneur with similar idea and team up or search for investors or shareholders. You could also contact friends and  families members for financial support, this is usually ideal because you wouldn't have to pay interest.

You may also check your local office or financial institutes for more information about getting a loan, there are sometimes government incentives depending on your state or country. Companies with huge capital demands but haven't any solid guarantee should consider venture capital. The venture capital companies take seats as board of directors and actively take part in developing the strategy and its implementation in your company. They try to sell their shares after some years to trade sales, this type of finance system is usually used in  technical branches.

There are also angel investors: these are usually wealthy people who invest certain amount of money in young businesses because of their interest in the branch or with the hope to make great profits.