4 Mistakes to Avoid When Financing Your Business

1. Going in without a plan

Know what the money is for before you ask. A clear plan covers what you will buy, what it will earn and how you will pay it back. Funders want to see that you have thought it through, and it helps you too. Write it down, even if it is one page.

2. Leaning too hard on debt

Borrowing can help you grow. Borrowing for everything can squeeze your cash flow. Add up your payments before you commit and check they still leave room for a slow month.

3. Using savings by default

Putting your own savings into the business feels safer, but it can leave you with nothing to fall back on. Compare the cost of funding with what you give up by emptying your cushion.

4. Letting invoices go unpaid

Money owed to you is cash you cannot use. Send invoices on time, follow up early and set clear payment terms. Better collections can shrink the amount you need to raise.

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