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1: Putting personal cash into the business
This is usually an initial phase for all the start-up businesses. At this stage, business owners are more about investing their personal money for the business to pay the operational costs and make capital purchases. If you find yourself low on cash to make further investment in your business, you can consider cash flow finance. Cash flow finance is one of the options that offers money to start-ups and small businesses to help them handle their expenses at a much lower rate than banks. The money acquired through this, can be used to pay off bills and debts and can be recovered once your business is well-established. 2: Business not yet self-sufficient For most start-up businesses, after a couple of months, the business starts to make enough to sustain itself. But you have to ensure that you are not stuck at this point for really long. If you stay here for really long, it will deplete your business resources. Most start-up owners make their enhancement in this phase by working full time or part time while they build their business. This approach helps them to pay off any debt and some extra expenses that might be needed. 3: business throwing off some cash while their owners pay for expenses out of their savings Once the business starts making enough cash to pay off the debts, most owners tend to clear their personal loans through the same cash. However, it is advisable for you to check with the accountants when you make the initial loan payments and determine the payback. At this point in the development phase, there can be a situation where you have to look out for your own income out of your savings. 4: business and personal expenses are paid out of cash flow from the business This phase can be much longer than expected for any start-up business. But it fails to achieve this success. When businesses reach this phase, they are at a position where they feel that there is enough cash flow. This cash flow will allow you to pay your personal bills along with the business expenses. If you stay too long in this phase (unless you want to sell your business) you will not be able to create much money for your future. Once this achievement is unlocked, you will have to move on to the next phase. 5: investment stage This has to be the ultimate goal of any business. Businesses need to make the amount of money that will normally exceed the amount you need to maintain the current lifestyle of the owner. At this point in the phase is where you start creating wealth for yourself and your future. This phase is where you have to choose to invest your funds in something that works wonders for you and your business. You can either choose to reinvest this money to grow your business. Or alternatively, you may choose to diversify your investments. You might buy or start another company. You might invest in the stock market or real estate. The options are almost limitless.
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