Question #1: Should you try to find investors for your business?
This is a common question that many aspiring entrepreneurs face when considering starting a business. Let’s start with investors. When it comes to investors, the answer is largely dependent on how much capital you will need. The more capital you need, likely the more equity and control you’ll have to give up.
A key question you need to ask yourself (if you want to go the investor route) is, “how much control do I want to give up?”
If you have to have more capital than what you currently have to start a business and you can’t obtain debt capital, then yes, you should seek investment.
At Finance JW, we recommend you try to keep as equity and control of your business as you can. Just about every new entrepreneur experience major life change (and oftentimes unexpected and unwanted) when they start raising capital and relinquish control of their company.
Question #2: Is it best to lease or purchase equipment/machinery?
Every situation is different when it comes to leasing versus buying equipment. We’ve worked with a lot of companies that do both, and there’s not really a right or wrong answer. However, if you’re a business owner who is paying hourly to “lease” time on equipment and your business has grown (maybe initially you needed the equipment for a few hours and now you need it for 40 hours), you probably should buy your equipment.
But, if you’re someone that owns equipment like vehicles and it’s essential you keep up with the latest versions for whatever you do, it might be better to lease the equipment and turn it back in when you’re done.
Question #3: I’m starting a small business. What do I need to account for in addition to my immediate employees in my personnel budget?
We recommend anyone who’s starting a business to create a 24-month cash budget. What cash you have now, how you expect the cash to come in, and how you expect to spend your cash on every line item that could possibly happen.
Now, will things work out exactly how your cash budget says? No, it won’t, but it gives you a good blueprint of where you’re going.
If you need assistance with creating a 24-month cash budget, we can help! Contact us today.
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