You have several potential sources of funding as an entrepreneur. However, you'll need to jump some hurdles before you can tap any of them. Chances are good that you don't have a complete suite of C-level executives as a startup. If so, consider fractional chief financial officer services. You won't have to pay as much as you would for a full-time executive. Even so, fractional CFO services can give you a noticeable edge in securing funding.
Funding Puts Your Business In a Better Position
Money makes your business more capable of surviving risks and capitalizing on opportunities. Startups have earned a notorious reputation for being high-risk. Specifically, Investopedia says that small businesses had a 50 percent chance of failing within five years as of 2021. The risk is highest in the first year, so much so that half of all startups will fold during it at some point. Subsequently, the startup will become steadier as it finds its footing, though the potential for bankruptcy will never vanish. See how the chance of failing rises to 65 percent when the time frame expands to include the first decade rather than the first five years. Given this, you want funding so you're better prepared to avert or block the various threats that can sink your startup.
Simultaneously, you want more funding to grow your startup. If you've started a business, you've presumably spotted a chance for your product or service to find success with your target demographic. Unfortunately, you won't be able to capitalize on this until your operations have expanded enough to match your vision. Without funding, your startup's growth will be much slower because it has to self-fuel. This can be catastrophic because someone else might beat you to your goal. After all, you aren't the only one who can spot opportunities, particularly if you've blazed a trail for other people by pursuing their dream.
You Can't Secure Funding Unless You Have Credibility
Securing funding is a matter of convincing other people that you can make it worth their while. Investors want to know their investments will grow. Similarly, lenders want to ensure they can collect their principals plus interest. Charisma plays a part in securing funding. However, it can't do everything on its own most of the time. Instead, you have to build trust so it can serve as a supplement. Some of that can come from personal reputation. If you've already been a successful entrepreneur, you'll find it much easier to secure funding. Furthermore, you might be able to draw upon the other connections you've made through your personal and private lives. The rest depends on your startup's numbers promising enough rewards to outweigh the risk.
Fractional CFOs Can Give Your Business Credibility
Fractional CFO services can help you with every aspect of this problem. First, those offering these services are long-time veterans of their chosen fields. They have the expertise, experience, and connections because they already move in the circles you're targeting. Second, a CFO can oversee your finances. They can put your startup on a firmer financial footing by making plans, shoring up strengths, correcting weaknesses, and predicting future trajectories. Subsequently, they can produce the numbers showing they've done all these things. That is beneficial for your planning going forward. Better still, this will do much to sway investors and lenders skeptical of your startup's prospects. Anyone can make fine-sounding claims about how high they'll rise. It's another thing when they can pull out the numbers to support their claims. Something that can hit with extra persuasive force when a reputable CFO has staked their reputation on those same numbers.
For more information on fractional CFO services, contact a professional near you.Share