As a contractor or home professional, starting your own business brings freedom and growth as you reach your goals. As your business comes to life, experts agree one of the first challenges you’ll face is obtaining the necessary funding. Many would-be small business owners often feel overwhelmed navigating the complexities of start-up finances. Read this article for expert’s advice on business funding.
Table of Contents
What to do before requesting funding
Focus on extending your network and engaging with potential investors. Then, make sure you’ve got a solid financial plan and a thorough business plan.
Financial plan: knowing how much you need
Preparing a detailed financial plan and learning the ins and outs of your expected costs allows you to enter into conversations with investors confidently. Anticipate questions, have solid data-driven answers, and know what sets you apart.
What are your top tips for choosing a business credit card?
- “Consider the benefits and rewards: Many business credit cards offer cash back, airline miles, or points for purchases which can be used to offset expenses. Look for a card that offers the best bonuses and rewards that fit your business needs.
- Read the fine print: Make sure you understand all of the terms and conditions of the card before signing up. Pay attention to annual fees, interest rates, and any other costs associated with the card.
- Compare different cards: Take a look at what different credit cards have to offer in terms of their benefits and rewards programs. It’s important to compare the pros and cons of each business credit card in order to make an informed decision.
- Check the credit limit: Business credit cards typically have higher limits than personal ones, so make sure to check what the maximum spending limit is before you sign up for a card.
- Look for additional features: Some business credit cards offer additional features such as discounted rates on travel or extended warranties on certain purchases. Look for a card that offers the features you need to get the most out of your business credit card.
- Consider signing up for auto pay: Signing up for an auto-pay feature can help you keep track of your spending and ensure payments are made on time, helping you maintain a good credit score.
- Monitor your credit score: Keep an eye on your credit score to make sure it’s not being adversely affected by any spending you do with the business credit card.
- Make sure you can pay off the balance in full each month: Business credit cards can be a great way to help manage cash flow, but it’s important to make sure you can pay off the balance in full every month in order to avoid costly interest payments.
- Pay attention to customer service: Make sure that you choose a business credit card provider with good customer service and clear communication. This will ensure that any issues that arise are quickly taken care of.”
Business plan: what makes your venture unique?
A well-thought-out business plan provides potential investors with information about your start-up and an understanding of how much effort and energy you’re willing to put into it. Knowing the most important aspects when writing your business plan will set you up for success right out of the gate.
How can Excel be used to create a comprehensive financial model for a startup that supports funding strategies and contributes to business success?
“Excel is a powerful tool that enables you to create a comprehensive startup financial model to support your funding strategy. By using Excel, you can create customized revenue, expense, and cash flow projections, along with break-even analysis and valuation calculations. This level of detail will not only help you make informed decisions about your business’s financial needs but also provide investors with a transparent and data-driven overview of your startup’s potential. Utilizing Excel for financial modeling can significantly improve your chances of securing the necessary funding and ultimately contribute to your business’s success.”
What is one important step for small businesses to take before applying for any type of funding?
“Be clear about your total addressable market and business model. That will help you project your future more effectively and will help defend when questioned on your logic in explaining a certain outcome to potential investors. Know who your customer is, how many of them there are and what they’d be willing to pay to use your solution.”
Nikita Garg from Marquee Equity
“Small businesses should always take a step back and assess their business model and finances before applying for any type of funding. This will give them a clear idea of how much money they need to raise and what they need it for. It is also important to have a solid business plan in place that outlines the business’s goals, strategies, and how it plans to use any funding it secures. A well-thought-out business plan will make it more likely that small businesses will be approved for funding and help them effectively use any funds they are awarded.
Risk management and marketing strategy are essential to any successful business plan. Risk management helps to ensure that a company is aware of potential risks, such as illiquidity, improper budget allocation, and financial instability. This enables the company to take effective steps to mitigate risks and prevent them from becoming a hindrance to day-to-day operations or long-term objectives. A marketing strategy helps the business maximize customer reach and develop an effective sales or promotion plan. It ensures that the right message gets communicated to prospective customers in order to attract their attention and engage their interest in the product or service being offered.”
Best advice for businesses to determine the amount of funding they will need
“When launching a business, estimating your start-up costs is equally as important as projecting your cash flow. These costs should include both one-time expenses, like incorporating your business, and ongoing costs, like utilities. You’ll also want to consider essential expenses (e.g., employee salaries) versus optional ones (e.g., graphic design or writing services). Once you’ve determined your start-up costs, calculate your cash flow because your business can be profitable but still lose cash through spending that doesn’t show up on your profit and loss statement. When it’s done correctly, a cash flow forecast will help you prepare ahead of time to account for seasonal lulls in business or anticipated periods of low revenue. This small business budgeting template helps quickly and easily determine the amount of money you’ll need to get your business off the ground — and provide a basis for comparison once you’re up and running.”
“Starting a business is one of the most challenging tasks a person can do. It takes persistence, flexibility, patience, and money. Most new businesses can take two approaches to fund startup costs and initial operations: bootstrapping or investors. But in either case, the founders need to determine the amount of funding they need. A top-down approach is easier to do and can give a rough estimate. But it needs to be more accurate and may underestimate the actual cost causing problems later. A bottom-up approach is harder to accomplish but is more accurate, assuming your inputs are good. Bring the team together and start with a brainstorming session and determine the costs of labor, rent, utilities, insurance, supplies, and other inputs. You can rely on experience, but actual quotes are better. Using a spreadsheet and organizing by categories and line items is an excellent way to track and calculate the amount of funding required. Refine your funding estimate as you obtain better numbers for projected expenses closer to your launch.”
Prakash Kolli from Dividend Power
What advice do you have for entrepreneurs who are struggling to secure funding for their new business?
Securing funding for a new business can be a challenging process, but there are a few steps you can take to increase your chances of success:
1. Take stock of what you have: You might be surprised to know that you have more resources available than you thought. Jot down any skills that you can bring to your new business as this will help you on the next step.
2. Build a solid business plan: A well-written business plan will help you articulate your vision, identify your target market, and demonstrate your understanding of the industry. It should include financial projections, market analysis, and a clear outline of your business model.
3. Research funding options: There are many more opportunities and sources than before available to entrepreneurs, including angel investors, venture capitalists, and small business loans. Take the time to research which options might be the best fit for your business.
4. Build a network: Networking is critical for any entrepreneur, but it can be especially helpful when trying to secure funding. Attend events and conferences, reach out to industry leaders, and connect with other entrepreneurs who have successfully raised capital. Join any local Facebook groups with other entrepreneurs which might help present some key resources.
5. Be prepared to pitch: Develop an elevator pitch that clearly and succinctly describes your business and be ready to expand on it with more detail as needed.
6. Be patient and remember your motivation to secure the funding: Securing funding for a new business can take time and effort, so don’t get discouraged if you don’t succeed right away. Keep refining your pitch, networking, and exploring funding options until you find the right fit for your business.
Remember, securing funding for a new business is not easy, but with hard work, persistence, and a solid plan, you can increase your chances of success.
Elita Torres from Lead Grow Develop
Picking a funding method
There are dozens of ways to get funding for your new business opportunity. Finding the right balance of popular techniques and practices will give you the best of both worlds.
U.S. government agencies are some of the largest providers of business grants. While applying for grants can feel daunting, narrowing down the type of grants you qualify for helps you to focus and find the right paths for support.
From angel investors to venture capitalists, investors are a great source of upfront funding. Angel investors usually have a high net worth and get an equity stake in return for their financing. Venture capital is a pool of funding from a business incubator or group of investors.
What are the advantages of venture capital for technology businesses?
“Venture capital can be an excellent way for small technology businesses to grow and become more successful in the long run. It provides access, expertise & resources that might not otherwise exist within one’s borders or even regionally; this includes financial backing as well as professional guidance on how best to use these tools available through partnerships with other companies who have significant power behind them
Pros of venture capital:
- It provides access to resources that a small business might not otherwise have.
- It can provide expertise and guidance on the best use of the resources available to a business.
- It can provide financial backing for a business, which can help them grow and become more successful in the long run.
While venture capital can be a great way for small businesses to grow, it also has its drawbacks. For one, it can be expensive – often requiring businesses to give up a large chunk of their company in return for the investment. Additionally, businesses that take on venture capital may be required to follow the dictates of their investors rather than make decisions based on what’s best for their own company. This can lead to conflicts and tension within the business. Additionally, accepting venture capital can make a business more vulnerable to financial downturns and other outside forces that may not have otherwise affected them had they not taken on investment.”
Phil from Proven
What are the advantages and disadvantages of angel investors for small businesses?
“The primary reason for bringing an angel investor on board is obviously funding. However, angel investors are generally experienced businessmen or entrepreneurs, so can also add big value by using their knowledge, expertise, and connections to help drive the company forward. This is obviously beneficial for both parties, as it helps increase the company’s chances of success, which in turn makes it more likely for the investor to make a return on their investment.
Angels can also help add credibility to a business, as they’re typically experts in their fields and come with a high degree of notoriety, which startup founders can use to their advantage during business negotiations or fundraising discussions. A partnership with the right angel investor can really take your business to new heights.
Another benefit of angel investors is that they usually invest in return for equity (rather than debt), which means the company doesn’t have to make loan repayments, which obviously helps to take the strain off their cash flow.”
Mike Lebus from Angel Investment Network
“Angel investors come in many forms – with different objectives for investments. Some angels will loan money, but most invest for an ownership share (equity) in the business. You’ll hear this expressed on Shark Tank as “$100k for 10%”, implying a $1M value for the business in this example. Angel investors make their return when the business is sold for a higher value than when they invested. While investors are entitled to a share of profits, profit sharing is not the primary means of making a return on their investment.
The implication of investing to sell at a higher price later is that the business owner must also be focused on selling the business at some point in the future — typically in 7-10 years. If the business owner or founder is building a business for their own income, they may be at odds with the objectives of their “angels.” Investors want the business to grow quickly and be worth 3 to 10 times more to a buyer, who is interested in buying an established, successful business rather than in starting one themselves.
It’s important that business owners seeking capital from angel investors understand that investors can double their money in about 7 years by investing in relatively safe public index funds. A much higher-risk investment in a private company must return significantly more to attract capital.
If you’re a founder seeking capital from angel investors, be sure your goals are aligned.”
Jeff Saling from StartUpNV
What are the advantages and disadvantages of private equity?
“Private equity offers a unique pathway to financial growth – but with any investment strategy, there are pros and cons to consider before diving in. On the upside, private equity allows investors access to more sophisticated financing instruments and strategies that can help boost returns while protecting their investments. However, private equity investments tend to be more illiquid than other types of investments and may carry higher costs and greater risks due to less regulatory oversight. As such, private equity is not necessarily suitable for everyone; those looking to gain exposure to this type of asset require specialized knowledge in order to understand potential opportunities and the possible risks involved.”
Tomas Milar, Founder & CEO from Eqvista
You can receive loans from many avenues, including financial institutions, family and friends, or customers turned investors. However, you’ll need to return your loan in full, and they almost always come with interest. With many loan options, you should research the best alternative for your needs.
What tips do you have for entrepreneurs when applying for a business loan?
- “Set up your business properly. If you need to get a license, get it. If you need to hire a registered agent for service of process, do so. Get your EIN from the IRS (and that means your business will be on the hook for taxes). Get a D-U-N-S number from Dun & Bradstreet. Pay the state incorporation fee if applicable, etc.
- Make sure your personal credit is in order. Many lenders will check your FICO score and a 550 is highly unlikely to cut it. Also, because your FICO SBSS and Experian Business credit scores are partly dependent on your personal credit scores, you are helping improve your business credit as well.
- Research alternatives. We tend to think of only banks or maybe credit unions when it comes to business lending. But there are several online lending options nowadays. If your industry is risky, look for lenders which specialize in your industry, as they are more likely to say yes.
- Understand exactly how much you truly need. If your business does well with $50,000, then apply for easier-to-get microloans instead of trying for $100,000 from a bank. A loan isn’t meant to be a slush fund; it’s meant to be a way to specifically and directly help your business. Applying for more money than you need seems like a good idea on paper, but in reality, it adds to your debt and reduces your chances of approval.
- Consider using more than one source. What if you need $100,000 but can only get $40,000? Then think outside the proverbial box and leverage your accounts receivable or unpaid credit card receipts for funding, or consider other avenues like equity financing or crowdfunding.”
Janet Gershen-Siegel from Credit Suite
“As a leading provider of business loans in Australasia, Bizcap understands the challenges entrepreneurs face when securing funding for their businesses. We’re committed to helping business owners achieve their goals
Here are some tips we have for entrepreneurs when applying for a business loan:
- Know your business inside out: lenders want to see that you have a thorough understanding of your business, its financials, and the market you operate in. Before you apply for a loan, make sure you have a clear business plan, financial projections, and a strategy for growth.
- Have a clear purpose for the loan: whether you’re looking to expand your business, purchase new equipment, or hire additional staff, make sure you have a clear purpose for the loan. This will help lenders understand how the funds will be used and increase your chances of approval.
- Be prepared to provide collateral: some lenders may require collateral to secure the loan. This could be in the form of property, inventory, or other assets. Be prepared to provide collateral if necessary. Bizcap offers unsecured lending facilities (up to $500k).”
Justin Francis from BizCap
What are the main challenges in obtaining a business loan?
- Credit score: Lenders typically consider the credit history of the borrower, including their credit score, debt-to-income ratio, and payment history, when assessing their creditworthiness. If a business has a poor credit score or a history of late payments or defaults, it may be challenging to obtain a loan.
- Cash flow: The cash flow of a business is important to ensure it can repay the loan. If a business has insufficient cash flow, it may be difficult to convince a lender that it can repay the loan.
- Collateral: Many lenders require collateral as security for the loan. If businesses do not have sufficient assets to offer as collateral, getting a loan might be more difficult.
- Documentation: Lenders typically require essential documentation when applying for a loan, such as financial statements, tax returns, and business plans. Gathering and preparing this documentation can often be time-consuming and challenging for some.
- Industry risk: Some lenders may be hesitant to lend to businesses in certain industries that are considered high-risk, such as the restaurant or construction industry.
Over the past several years, online crowdfunding sites have become a popular way to gain funding for a business. While they’re typically used to help launch specific products, they can also be a great way to offer services.
Best advice for a successful crowdfunding campaign for businesses
“My best tip for a successful crowdfunding campaign for a new or growing business is to know the road ahead. The more that you understand the process of crowdfunding, the easier it will be for you to surpass your goal and avoid some of the major pitfalls that come with this territory.Seek out the education, coaches, experts, and people who can be a part of your launch team. Read articles like this one. Business is a team sport. Great creations, from the Pyramids to the iPhone were created by teams of people. Go recruit for your team!”
Salvador Briggman from Crowd Crux
Best advice for a successful crowdfunding campaign for products
“My best advice for a successful crowdfunding campaign is to talk to potential customers as early as possible once you have the original product idea. Don’t wait until you think you have the ‘perfect’ prototype ready before you talk to customers for feedback. If you incorporate customer feedback in your product from the start, you are much more likely to have a winning crowdfunding campaign because you will be developing something the market actually wants. Don’t assume; instead, ask!”
John Teel from Predictable Designs
What are the advantages and disadvantages of equity crowdfunding
1) Alternative to traditional financingWhen you need to raise funds in a short period of time, equity crowdfunding is an effective option. It’s user-friendly and easy to customise.
Bootstrapping is a term for funding your start-up costs with savings you’ve intentionally set aside to get your business up and running.
Advantages and disadvantages of bootstrapping your startup
“There are both advantages and disadvantages to bootstrapping your startup. Through my time creating Startup Boston and speaking with hundreds of startups, I have learned this:
By bootstrapping your startup, you’re able to make decisions that you feel are best for the company, and you don’t necessarily need to wait for sign-off from your board or investors. In short, you’re able to take more chances as a startup, and the only people you report to are yourself and your employees.
However, oftentimes when you bootstrap a company, you tend to scale up a bit slower because you don’t have a big influx of cash coming into the bank to fuel your marketing and growth efforts. The perk of receiving funding and not bootstrapping your company is that you’re able to hire faster and market your product or service more.
At the end of the day, you need to ask yourself which is more important to you: having complete control with the potential to grow slower? Or giving up some of your control to potentially grow faster?
There’s no wrong option; it just boils down to what is best for you, your employees, and your company.”
Stephanie Roulic from Startup Boston
How to raise money for a business without a loan.
“Depending on the kind of business you run, crowdfunding might be the answer to your business funding needs. Through sites such as Kickstarter or GoFundMe, you can presell products before they’re actually available. Not only does this help with funding but it essentially guarantees some orders and helps advertise your company. An interesting product can even go viral simply by having a crowdfunding campaign. A good crowdfunding campaign does need a solid presentation though. This might involve investing in video production and other marketing materials. Social media advertising of your crowdfunding campaign can go a long way too.
Other companies looking to avoid a business loan might want to instead consider an angel investor. While getting this kind of cash injection can help significantly, you need to decide if it’s worth giving up equity in your company. It might reduce the pressure of taking on business debt, but in the long run, it might cost you much, much more. That long-term cost might be worth it if it allows you to focus on your business without the extra burden. The other consideration is that some venture capitalists will provide additional guidance and mentorship. That advice could be priceless. Check out a site like AngelList to explore your venture capitalist options.”
Jeremy Biberdorf from Modest Money
Best advice for financing a business with limited capital
“Starting a business with limited capital can be a daunting task, but with the right approach and resources, it is possible to secure the financing needed to get your business off the ground. Here are some tips to consider when seeking out financing options for your limited capital business:
- Ensure there is a clear pathway to profitability: It’s important to have a solid business plan in place that outlines how you will generate revenue and make a profit. This will be key in convincing potential investors or lenders that your business is worth their investment.
- Understand where the money will be invested: Before seeking out financing, be clear about how you will use the funds. Have a plan in place for how the money will be invested in your business, whether it be for marketing efforts, purchasing equipment, or hiring additional staff.
- Understand how you will grow revenue and margins: Have a solid financial model in place with 5-year projections to show how you will grow your business over time. This includes understanding how you will control operating expenses and invest in capital expenditures (CAPEX) to drive growth.
- Make sure there is enough cash runway: It’s important to have a solid understanding of your cash flow and make sure you have enough runway to reach profitability. This will help convince potential investors or lenders that your business is a good investment.
For expert corporate finance advice, consider reaching out to Scrubbed. They can help you create a solid financial model and provide guidance on securing financing for your limited capital business.”
Fred Ozaeta from Scrubbed
Tips for finding business grants
Business grants are one of the most affordable capital opportunities available. Here are some tips for finding and applying for business grants:
- Set up Google Alerts for keywords relevant to your grant search, i.e. woman-owned, entrepreneur, small business grants, etc.
- Join or Sign Up with other organizations who manage grant databases online, i.e. EnrichHER or Hello Alice
- Research grants and the organization providing the grants to determine if this is the right grant program for you and if the business aligns with your mission. Also, see if there is anything you can utilize from your research in your application or if you may know anyone who may be able to help you
- Save the date or calendar the grant opportunities so you make sure you don’t miss your opportunity to have your name in the running
- Your story really matters. As it was plainly put to me, you go to the horse race and bet on the jockey, not the horse. Organizations want to feel they are giving funds to someone most deserving. Win them over with your story – be honest and genuine, and speak from the heart
- Start compiling your grant responses on a Google doc for future reference and quick access
- Above all, stay positive and keep trying!
Kat Ahmed from EnrichHER
Are there alternative funding sources beyond traditional loans and venture capital for startups?
Yes, aside from typical loans and venture capital, businesses have a range of different funding options. Crowdfunding allows business owners to raise financing from a large number of people through websites like Indiegogo or Kickstarter, which is an appealing alternative. This gives financial support while simultaneously validating the idea or product in the marketplace.
Angel investors are another option; these are typically wealthy individuals seeking to assist start-up enterprises. In addition to money, they frequently provide substantial networking and mentorship opportunities. Peer-to-peer lending services enable direct cash transfers from individuals, providing an alternative to traditional banking institutions.
Furthermore, grants from public or private organizations may be tremendously useful to businesses, particularly those focused on research, development, and social impact. Corporate sponsorships, strategic partnerships, and competitions can all assist raise revenue.
Revenue-based finance is a flexible and growth-oriented option since it allows businesses to acquire funds in exchange for a percentage of future sales. Entrepreneurs may lessen their dependency on traditional funding sources by adapting their fundraising strategy to their industry, growth trajectory, and business model, as well as looking into other funding options.
Dviti from Strategic Planning
Best advice for equipment financing
“A benefit of starting a business as a professional (inspector, plumber, electrician) is that the startup costs are relatively low compared to other businesses. The most significant investment will be the equipment. The equipment needed and the amount of investment will depend on the profession.
There are several options for equipment financing
- Unsecured business loans – These loans are typically short-term and are relatively quick to gain. However, to get approval for this loan, youกฏll need a good credit score and be in business for a minimum of 2 years.
- Asset-based loans – You will need to provide your equipment as collateral for this loan. This option is great for business owners who don’t have a perfect credit score.
- Personal loans – These loans are ideal for new business owners as your loan is not directly related to your business. As with the unsecured business loan, a nearly perfect credit score is needed to get approved.
While these are the most common equipment financing methods, professionals have other options, such as applying for business credit cards, government funding, or equipment leasing. The best financing option will depend on your credit score and how long you have been in business.”
Chepe Cruz from Working Capital
What are the advantages of inventory funding for small businesses?
“Inventory funding can offer product-based businesses additional cash to help cover expenses like inventory and is a great option for brands experiencing rapid growth.
Inventory funding leverages the resources of a financing partner to pay for inventory production, which is one of the largest expenses many brands report. Funding can be customized to address your business’s exact manufacturing, shipping, and sales timelines so that you don’t make a payment on goods until the inventory sells. This works well with natural cash flow cycles.
You get the funds you need without impeding your ability to maintain inventory.
Kickfurther solves this problem by funding up to 100% of your inventory costs at flexible payment terms that you control. Kickfurther’s unique funding platform can fund your entire order(s) each time you need more inventory, so you can put your capital to work growing your business without adding debt or giving up equity.”
Kaylyn Perry from Kickfurther
Next steps after funding
Now that you’ve got your start-up funding, it’s time to start building your business! Carefully allocating your funding helps ensure a successful start. Put the necessary licensing and documentation in place, and invest in marketing using your connections through funding. Set up helpful apps and subscriptions for managing finances, list yourself as a general contractor, be prepared to communicate with customers, train your employees, and schedule appointments.
Why is Cash Flow Management important?
“Since cash is the lifeblood of any business, cash flow management is important to most businesses, and it is not to be confused with profitability. You could be profitable while your cash is eroding. Conversely, you could be generating cash but not profitable.
Rule #1: Growth Sucks Cash.
Growing companies can experience more and more money tied up in accounts receivable, work in process, raw materials, and finished goods inventory. Therefore, growth companies need to be careful to grow only as fast as they can maintain a healthy cash position. A healthy growth rate that is sustainable for most companies will be between 15 and 25% annually. Rates higher than that may overwhelm the leadership team.
Rule #2: You Can Grow Out of Business
The owner of a $10M per year flooring and window covering company recently contacted me because he’s getting ready to transfer the business to a successor CEO. While growth is important to him, he has witnessed too many of his competitors scale so fast they go out of business. A business may have positive cash flows and be generating losses. If banks, suppliers, or venture capitalists are keeping these companies awash in cash, it doesn’t mean they will survive at a fast rate of growth.
Rule #3: Focus on Your Solvency and Credit Worthiness
Positive cash flows please banks and financial institutions. A positive cash flow means the business enjoys steady and predictable cash flows.
Rule #4: Cash Flow Management Enables Capital Spending
If your inflow of cash exceeds your outflow, then capital investment in property, plant, and equipment is more possible.
Finally, good cash flow management is required to make regular disbursements, e.g., salaries and other overhead expenditures, which keeps employee morale high and reduces stress related to juggling finances.”
Jonathan Goldhill from the Goldhill Group
Best advice for managing finances after receiving business funding
“You need to understand how to manage money effectively if you want to grow your business. Here are three tips to keep in mind when managing your finances.
- Know Your Numbers
The first step towards financial success is understanding where you stand financially. If you don’t know where you stand, you won’t know whether you need to make changes to your current spending habits. To find out exactly how much money you spend each month, use a cash flow calculator. These tools allow you to input your monthly income and expenses and calculate how much money you should have left over at the end of the month. Once you know this number, you can compare it against your actual results to determine which areas of your life require improvement.
- Have a Budget
Once you know where you stand financially, you can begin creating a budget. A budget allows you to set aside money for specific purposes. For example, you may decide to allocate $500 per month for marketing activities while another $100 goes toward office supplies. By setting these amounts aside, you ensure that you aren’t wasting any of your hard-earned money. In addition to helping you save money, a budget also helps you avoid unnecessary debt. When you have a clear view of your finances, you can easily identify any debts that you might incur.
- Pay Yourself First
If you’re like most small business owners, you probably put yourself last when it comes to paying bills. However, putting yourself first doesn’t mean taking advantage of freebies. Instead, it simply means prioritizing your own personal needs above those of your business. If you pay yourself first, you’ll have extra funds to invest back into your company. This could include buying equipment or hiring additional staff members.”
Courtney Luke from Arrest Your Debt
How can companies effectively incorporate technology in their starting stages?
Companies across various industries can harness technology to optimize their operations and gain a competitive edge. Integrating technology is equally vital in the construction sector, where precision and efficiency are paramount. Here are some key strategies for construction companies:
- Market Research and Analysis: Utilize online tools and software to conduct comprehensive market research. This can include analyzing the local competition, understanding customer needs, and identifying service gaps. Platforms like the U.S. Small Business Administration and search engines provide valuable data for informed decision-making.
- Business Planning Software: Leverage online tools with ready-made templates and use cases for constructing a solid business plan. These platforms assist in outlining company goals, financial projections, and key performance indicators. Buildertrend and similar software can also be employed to manage project details efficiently.
- Legal and Administrative Tools: Leverage legal technology platforms like LegalZoom and Rocket Lawyer to assist in selecting the appropriate legal structure for the business. These tools can guide the company’s registration and ensure state and federal regulations compliance.
- Financial Management Systems: Implement accounting software to track revenue, expenses, and profits accurately. Cloud-based solutions like QuickBooks or Xero allow for easy access and secure storage of financial data.
- Investor Relations Platforms: Utilize online networking platforms like AngelList and LinkedIn to connect with potential investors. These platforms facilitate communication and provide a platform for presenting business proposals.
- Project Management and Reporting Software: Adopt specialized construction project management software like Buildertrend. This platform enables efficient communication with employees, clients, and subcontractors. It also tracks job progress and simplifies financial management with features like the Schedule, Daily Logs, Estimates, and Change Orders – just to name a few. With Buildertrend, construction pros can ensure transparency and minimize project delays.
- Insurance and Risk Management Solutions: There are different platforms to obtain quotes from multiple insurance providers. These tools help select the right coverage for various liabilities, ensuring the company is adequately protected.
- Compliance and Documentation Tools: Implement software to manage licenses, permits, and regulatory compliance. This helps keep track of the necessary paperwork and ensures the company operates within legal boundaries.
- Communication and Collaboration Platforms: Utilize communication tools like Slack or Microsoft Teams to facilitate seamless collaboration among team members. These platforms enhance internal communication, which is crucial for project success.
- Technology Adoption for Innovation: Consider adopting innovative technologies specific to the construction industry. This could include Building Information Modeling (BIM) software, drones for site surveys, and IoT devices for real-time project monitoring.
By integrating these technologies, companies can streamline operations, enhance efficiency, and position themselves for long-term success in a competitive market. It’s essential to tailor the technology stack to the specific needs and goals of the business.
Use these suggestions from experts to gain the funding you need to get your dream business off the ground. Do the research, plan for the unknown, and think big when setting a funding goal. If you’re uncertain about financing, consider exploring various funding options. Once you establish your business plan, consulting with an accountant on how to best use your remaining funding ensures you’ll invest in your continued growth.