Those that have good enterprising ability and leadership make good entrepreneurs. Being a businessman is not everyone's cup of tea. It is only when you have the ability to take risks and face challenges that you can become successful in business. When you compare growing a business to raising a family you will find the latter a lot more easier. Any business venture can be successful when its finances are managed and controlled by a finance professional and the leader is able to capitalise on every opportunity that he comes across.
The foundation of your business stands on financial control and planning. If you are not able to have the cash flow managed professionally your business is bound to suffer. As a business owner and borrower you will need to be answerable to your other partners in business who happen to be the banks and financial institutions who will be giving you the loans. Of course as the promoter one needs to bring in the seed capital that is required as promoters share. Depending upon your application and business plan they are likely to finance you through term loan and overdraft loan. With these two loans you can acquire building, capital equipments like plant and machinery and use overdraft for your operational expenses.
Don't think that starting a new business is the biggest challenge ever for there is more to come. Just like living organisms, business too keeps growing.You have to keep growing the business least it dies down. The moment you reach the position wherein you need to grow to the next level, you will need to pump in extra finance to be able to expand your business. If you have to bring in promoter's share you can do so from the internal accruals that you have accumulated in your business account. If you want to build surplus funds in your business you have got to have a finance professional managing your business operations. If not in the beginning, soonest possible you should engage a professional who can manage, control and monitor your funds and operations. Many times banks can ask the promoter to bring in his share from his personal finances and not from the business. You can expect one or more banks to bring in the rest of the funds for the project.
But then working on an expansion plan would entail a lot more of homework on the business plan. Your business plan will need to be worked out meticulously. The banks is likely to be favourable when it is able to see a growing sales orders in the pipeline. Besides your business plan you will need to have a good credit history with the bank too. Therefore it is important that you keep your slate clean and make all of the repayments in time to the bank. The bank is likely to look at your sales performance records too. The bank will look at all these points to consider your application for extension of credit to you.
The bank can either give you new loans in addition to your existing outstanding loans. New loans will naturally mean new terms and obligations. In some cases banks advise you to foreclose the existing loan and sanction a new loan to you under new terms and conditions but cover the credit to the extent of the first loan too. For refinancing loans the bank may use the original guarantee that it received from you and may not insist on additional security.Sometimes extended tenure might work to your advantage too.
When your record and performance is impeccable, you will find the banks bending backwards to partner with you in your progress. Apart from your business proposal, the bank will also consider its promoter's personal credibility as well as conduct and credit history too.
So when you have long term plans to build a business empire, the first thing that you should do is to set up a strong financial foundation.
The foundation of your business stands on financial control and planning. If you are not able to have the cash flow managed professionally your business is bound to suffer. As a business owner and borrower you will need to be answerable to your other partners in business who happen to be the banks and financial institutions who will be giving you the loans. Of course as the promoter one needs to bring in the seed capital that is required as promoters share. Depending upon your application and business plan they are likely to finance you through term loan and overdraft loan. With these two loans you can acquire building, capital equipments like plant and machinery and use overdraft for your operational expenses.
Don't think that starting a new business is the biggest challenge ever for there is more to come. Just like living organisms, business too keeps growing.You have to keep growing the business least it dies down. The moment you reach the position wherein you need to grow to the next level, you will need to pump in extra finance to be able to expand your business. If you have to bring in promoter's share you can do so from the internal accruals that you have accumulated in your business account. If you want to build surplus funds in your business you have got to have a finance professional managing your business operations. If not in the beginning, soonest possible you should engage a professional who can manage, control and monitor your funds and operations. Many times banks can ask the promoter to bring in his share from his personal finances and not from the business. You can expect one or more banks to bring in the rest of the funds for the project.
But then working on an expansion plan would entail a lot more of homework on the business plan. Your business plan will need to be worked out meticulously. The banks is likely to be favourable when it is able to see a growing sales orders in the pipeline. Besides your business plan you will need to have a good credit history with the bank too. Therefore it is important that you keep your slate clean and make all of the repayments in time to the bank. The bank is likely to look at your sales performance records too. The bank will look at all these points to consider your application for extension of credit to you.
The bank can either give you new loans in addition to your existing outstanding loans. New loans will naturally mean new terms and obligations. In some cases banks advise you to foreclose the existing loan and sanction a new loan to you under new terms and conditions but cover the credit to the extent of the first loan too. For refinancing loans the bank may use the original guarantee that it received from you and may not insist on additional security.Sometimes extended tenure might work to your advantage too.
When your record and performance is impeccable, you will find the banks bending backwards to partner with you in your progress. Apart from your business proposal, the bank will also consider its promoter's personal credibility as well as conduct and credit history too.
So when you have long term plans to build a business empire, the first thing that you should do is to set up a strong financial foundation.
SHARE
