In: Finance
In 500-1000 words answer the following Q:
What do you imagine or have you experienced to be the single greatest challenge that arises when you start your own business?
Answer)
The single greatest challenge that arises at time of start of own business is arranging required finance in required time frame. We might have a access of limited pool of capital for running business but start up needs high capital with growth of business. In the intial stage of business , the cash inflow is nearly zero or very negligible in comparison of cash outflow. In the start of business, we’ll be starting from scratch, which means we’ll need to explore all your possible funding options before landing on one. Most of the investors would like to invest in established businesses with minimal risk and they want to be sure that they get returns for the risk they took.
Most of the people think that starting a business is impossible due to the realization of the costs and the lack funding available. We start businesses with the aim of making money, but in reality we can’t start making money unless we have money to fund the business at start . Financial risk involve play a huge role in small businesses, maintaining a healthy cash flow is essential. Generally start-ups need money to cover costs. When your starting from scratch there’s many things that need to be developed,
Due to lack of past financial record , it become tough for new entrepreneur to raise capital from financial institutions. The other sources of funding can be solution of such challenge. Many other forms of investors are ready to invest in start up like seed funding institutions, venture capital fund, project funding, crowd funding and some time hedge funds. Even after globalization and availability of lots of funding agencies in market connecting and getting fund on time is very critical decisions for first stage entrepreneurs.
As to convince investors and institutions about new idea generally something that doesn’t exist is definitely a big challenge. Trying to make them understand about success of business that we are building is cumbersome task.