8 Proven Ways to Easily Self Fund Your Business for Success
Summary: You want your business to grow, but don't have the money to make it happen.
It can be really tough to find the money you need to take your business to the next level. You may feel like you're stuck in a cycle of not being able to growth because you don't have the funds, and not being able to get the funds because you don't have a track record of growth.
Listen in to find out how to easily it is to self fund your business so that you can break out of that cycle and start making progress.
Want an easy checklist to get you started? When you watch the video, type 21WAYS in the comments for a free checklist of easy changes you can do in your business that create self funding opportunities starting today!
As a business owner looking to facilitate growth, cash flow and funding are always top of mind.
But I consistently see entrepreneurs struggle to lock down these two elements.
Because it always seems most challenging to get funding when you need it. (In fact, there’s a saying in the banking world: “Ask for funding when you need it the least.” It turns out that businesses are more attractive to banks when they’re doing well 😉 ).
Instead of putting the future success of our business in the hands of these institutions, it’s vital that we take matters into our own hands. Here’s how we do that:
8 Ways to Easily Self-Fund Your Business for Success
1. Develop a growth plan.
If you know that you need to fund a growth aspect of your business, you must understand what that money is going to look like long term. How much is that growth going to cost? How long will it take to get a return on your investment?
Remember: Growth has a slower rate of return on cash, so it’s common that a lot more money is needed before you can actually get where you want to go. But as long as you can plan this out strategically, you can predict your cash needs before getting there, so there won’t be any surprises.
2. Develop a cash flow forecast.
Ready to develop a cash flow forecast? 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 Waze 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.
But how do you make sure yours are telling the right one?
We offer a service called ‘The Business Audit’ that involves analyzing your financials, reviewing your performance, and providing you feedback on what these figures tell us.We also have a super helpful article called ‘Twenty-One Ways to Quickly Fund Your Business Growth’ [featured in Entrpreneur.com] that takes a deep dive into giving your finances some extra muscle, which you can download that article here: www.youbizrules.com/21ways.
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. 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.
And each one of them has different priorities and different relationships with their clients.
For example, I know that 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 on the inside when it comes time to apply for funding.
6. Lean on mentors and advisors.
You don’t need to know everything in your business, but you DO need to know the right people.
- work in financing
- work in bookkeeping
- are CPAs
- are currently on or have already been on similar entrepreneurial journey as you
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]!
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?
Offering your current client base a new service or elevating one that 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 reconfiguration of the current systems you have in place is all you need to go from being BUSY to genuinely PRODUCTIVE (remember: there’s a difference).
Well, there you have it! 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!