9 Proven Ways to Easily Self-Fund Your Business for Success
Summary: Ever wondered how to self-fund your business? This article will share 9 Proven Ways to Easily Self-Fund Your Business for Success.
As a business owner, you know that growth isn't just a goal—it's a necessity. But let's be honest, cash flow and funding are the bottlenecks slowing you down. Sound familiar?
Here's the kicker: when you're in dire need of funds, that's often the worst time to ask for them.
Ever heard the saying, "Banks will lend you money only when you don't need it?" It's a paradox; banks find you more attractive when you're already succeeding.
So, are you going to let this dictate your success? No way. It's time to take the reins and fund your own future. Here's your game plan: 9 proven ways to easily self-fund your business for success.
9 Ways to Easily Self-Fund Your Business for Success
1. Develop a growth plan.
Look, you're not just dreaming of success and growth—you're craving it.
Knowing you want to grow is one thing; understanding the financial layout of that growth is another.
How much is that growth going to cost?
How long will it take to get a return on your investment?
Let's lay it out: Growth isn't a get-rich-quick scheme. It's more of a long-haul investment that often demands more upfront cash than you'd expect.
But you're in this for the win, not just for the kick-off.
Strategically plan your financial journey, and you'll not only anticipate how much cash you'll need but also avoid any surprises down the line.
This will allow you to self-fund your business.
2. Develop a cash flow forecast.
Ready to develop a cash flow forecast to self-fund your business success?
Here are the two pieces of information you need:
1. The amount of money you have sitting in your bank.
2. The amount of money moving in and out.
Once you have these figures, you can use an app like Pocket Smith to help you visualize your balances daily.
Fun fact: The average business has between nine to sixteen days of cash on hand, so being able to view cash flow on a monthly business can hide any potential pitfalls.
This is the "direction finding" part of operating system of your business.
With a cash flow forecast in your toolkit, you’ll be able to predict when you might run into danger and where you might need to re-strategize your business along the way (a monthly forecast won’t show you this.)
3. Strengthen your finances.
Your finances tell a story.
Your finances are more than just numbers on a spreadsheet. They are the storyline of your business.
As they tell the story, each number is like a plot point in that narrative. Good story or cautionary tale? You decide.
But let's make sure it's not a thriller with twists you didn't see coming.
Your financials weave a plot sharing the milestones of your entrepreneurial journey. Peaks and valleys, triumphs and setbacks, they're all there in black and white.
So, how do you make sure yours are telling the right one?
That's where our Business Audit steps in. This is a service we offer that involves analyzing your financials, reviewing your performance, and providing you feedback on what these figures tell us. No fluff, just actionable insights.
Ready to get your business audit done? Let's chat.
4. Make profitability a priority.
Even if you’re new to entrepreneurship and are not looking for funding quite yet, it will save you years of heartache if you get this strategy right from the beginning.
Too often, people treat profitability as a reward, and I am here to tell you there is no profit fairy waiting for you to work hard enough, long enough, and good enough to give you profit.
This is one of the biggest mistakes I see service-based businesses making every day.
Profit needs to be an intention.
And in a service-based business, you have an MVP – Minimum Viable Profitability. An MVP is the smallest point in your revenue in which you achieve profitability. Your first goal, before anything else, is to find that number. DO NOT wait until you reach higher levels of success.
5. Lean on mentors and advisors.
You don’t need to know everything in your business, but you DO need to know the right people.
These are the industry veterans, the savvy strategists, and the wise counsel who've been there, done that.
Consider people who:
- work in financing
- work in bookkeeping
- are CPAs
- are currently on or have already been on similar entrepreneurial journey as you
They're more than just a sounding board. They're a strategic asset.
Make the most out of your relationships with these people because they can often help you find shortcuts that you didn’t even know existed which will save you valuable time and money!
6. Develop relationships with bankers before you need them.
As small business owners, I believe that you need to curate the right relationship with your banker before pursuing funding.
The first step to doing that is understanding that there are many different kinds of banks out there.
National Banks: These are the big names, the ones you see on every street corner. They offer a wide range of services but may lack that personal touch.
Regional Banks: Think of them as the younger siblings of national banks. They serve specific areas and offer a nice blend of services and personal relationships.
Community Banks: These are your local heroes. They invest in local businesses and offer a more personalized service. You're not just a number; you're a neighbor.
Non-profit Banks: Also known as credit unions, these banks are owned by their members and typically offer favorable rates and terms. However, their business services might be limited.
Online Banks: These are the new kids on the block, offering banking without borders but without brick-and-mortar support.
Specialized Banks: These cater to specific industries or sectors, offering tailored services but might not be a one-stop-shop for all your needs.
And each one of them has different priorities and different relationships with their clients.
For example, I can pick up the phone, call my regional bank, and chat with my banker about the finances in my business for hours on end and leave the conversation feeling very helped and supported on a personal level. I can’t necessarily do this with my national bank because we don’t have the same kind of one-to-one relationship.
If your banker knows your business and your growth plan inside, they can advocate for you when it comes time to apply for funding.
7. Find ways to boost revenue with your current client base.
So, you’ve made the initial investment into your current client base.
...But have you maximized return?
Have you found a way to capture more sales from the market you’re already pulling from?
Remember, it's not just about selling more; it's about deepening relationships.
The more your clients see your value, the more indispensable you become to them. And guess what? Happy clients don't just buy more. Happy clients become ambassadors for your brand.
Offering your current client base a new service or elevating one you already have is a quick way to boost cash without putting any more money investments on the line. This can yield results for you in 30 days or less.
8. Find ways to do more with what you have.
Nine times out of ten, when I talk about profitability with clients, I receive the same response– “I can’t cut anything else. I need everything I’m using.”
This is often true, but the question is this: Are you getting the best return on your money? Are the tools, team, space, and software utilized to their fullest potential?
Usually, a simple adjustment in how you utilize what you already have can make all the difference.
It's not about being BUSY. It is about being PRODUCTIVE. There's a crucial difference between the two.
Being busy is running on a treadmill. You're moving, but not going anywhere. Being productive is like running on a track. You're covering ground and heading toward a finish line.
9. Change the Nature of Cash Flow in Your Business
If you're like many business owners, you're keenly aware of the importance of cash flow, but you might be stuck in a reactive cycle.
If you recognize that you are reacting, you may be stuck trying to figure out how to transition to a more proactive stance. The answer is to move to a profit plan.
A profit plan is more than just numbers on a spreadsheet. It's a living, breathing strategy that guides your financial decisions.
Start by saving, and I don't mean just stashing away whatever is left at the end of the month.
Make saving a line item in your budget, something as non-negotiable as your utility bills or employee salaries.
Next, start building reserves. This isn't just a safety net. Think of it as an investment in your future peace of mind. This fund can cover unexpected expenses or investment opportunities that pop up suddenly.
Allocate funds for future growth opportunities, too. Whether scaling your operations, launching a new product, or expanding to a new market, you'll need capital. Planning for this now gives you the financial freedom to seize these opportunities when they arise.
By doing these things, you're not just keeping the lights on. You are setting the stage for sustainability and growth. This proactive approach doesn't just improve your day-to-day operations.
It makes you more attractive for financing. Banks and investors love to see businesses that aren't just surviving, but thriving with a well-thought-out financial strategy.
This is so that we are strengthening our financials and we're looking more attractive to a bankable type of situation.
Final Thoughts
You can self-fund your business and find the success of your dreams!
You may find that you need only one of these strategies to see results or maybe you need all nine of them. Either way, that’s okay!
Put in the work, plan ahead, and keep your eyes on the prize, friends. We’re going to get there!
Are you needing help navigating cash flow in your business? Let's talk about it! Find time on my calendar and let's get you confident in the cash flow in your business.
