As entrepreneurs, the first thing you want to focus on is building your business. Before you can do that you must have a business plan and mission statement in place. If you don’t know what you stand for no one else will know either. Running a business is never easy.
When contemplating applying for a loan you must consider your personal assets and debt. This is not to say that you’re going to use it as collateral, but you should make sure your personal finances are in order. Remember, your financial behavior transitions across the board. If a lender regard you as irresponsible then they will assume that’s how you will run your business.
Banks are very cautious when lending money. Most decisions are based on subjective judgments. If you want to get a lender on your side then you must have an organized and prepared mission statement of the company and financial statements.
Banking lending decisions can be summarized by the five C’s- Character, Capacity, Capital, Collateral, and Conditions.
When the proper business plan is in place it will address future projections on market size, sales and profitability. A keen entrepreneur doesn’t only focus on today, but also tomorrow.
Many African-American ventures end up struggling or failing due to a lack of access to capital. Another common reason businesses fail is that the business owner leading the operation lacks the business know-how to navigate the bumpy road that comes with entrepreneurship.
However, there are programs available to help alleviate some of these challenges. Among them is the 10,000 Small Businesses initiative. Sponsored by Goldman Sachs, this is a $500 million initiative designed to provide 10,000 small businesses across the United States with business education, mentors, networks, and capital. The program is mainly designed for small businesses operating in economically disadvantaged areas with revenues ranging from $150,000 and $4 million that have been in operation for at least two years and have at least four full-time employees. The program also looks for a scalable business model that can potentially create more jobs.
Entrepreneurs are the real drives of new job creation and economic recovery. Fabulous & Money Savvy suggest you lead by example when it comes to organizing your financial. Don’t borrow more than you can pay back. Don’t use your business account as petty cash at your own expense. Keep track of all your company’s expenses. This is valuable when it comes to tax preparation and future borrowing. The goal is to leave a legacy for others to follow.
“Love yourself enough to support yourself.”
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