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Having enough capital for business success



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Having enough capital for business success

I want to share my experience in my retail business before the age of the internet. My plan seemed complete and my capital looked enough. But after a few months of good sales, I was deluged with new customers that may be the result of word of mouth. I had to borrow money for the supplies that were purchased. Sooner than I expected, the interest of the money borrowed was eating the profits. If only I had more than enough capital my business would still be alive today. The lesson learned is the amount of capital that you will use for your business should be more than enough.

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Youngshark

I think that in the initial stages it is all about making mistakes and the more money you have the more you will splash during those mistakes but when broke you can work with what you have and be economical.



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overcast

I have to agree here. When you are broke, you where not to spend the money. And that's one reason having capital in the right sides help a lot. so you have to understand that business success requires us to understand the investment wisely. And there comes the point where you can see that business should make mistakes through frugal approach.



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Enyi

Your ideaolgy is great,I wouldn't advised anyone to spend so much on a very tender business.it better to make all the mistakes with small amount than making it with huge amount.



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Youngshark

If you blow a little money but get to learn a very valuable lesson then you have gained ed so much at a lower cost which is best to start with what you have.



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overcast

Yes when one does not have the money. It helps to do the hustling. And then from there onwards just focus on the customers. Most likely that works out for people. If they hustle and get new customers that does work out.



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jpk0007

Well, i had started a a small business of my own in the past, but at that time the reason i had to close it was that i was unable to give enough time to it and i also was not able to get the skilled manpower required for the business which was growing fast.I think having enough investment is quiet necessary when you are starting any new business , particularly in the initial stages when you are trying to establish it.Nevertheless every failure and mistakes gives you an opportunity to learn and become succesful in the future.



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Kakashi2020

Here's a tip if you're planning to open a business ask yourself how much are you willing to invest in it. Then whatever is your answer get it's 40 percent and use that as capital.for a business which can operate for 6 months with all expenses included. If your business succeeds in 6 months time then you can use the 20 percent remaining money for expansion.
But if after 6 months, the business is a flop then use the other 40 percent to open up another business.



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iambeth

Thank you for this good tip. Six months is the time when you can really gauge whether you can continue the business or not.



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esteban123

I think that it is really an advantage most of the time if we have enough capital to be used for our business because there will come a time that our business might expand or experience some loss at a certain point and we really need more funds to recover those loses right away by investing more to our business..



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Kakashi2020

I do agree because most businesses does not earn right away. In such cases the business should always stay open and that means extra expenses.



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Enyi

Well,this totally depends on the individual involved. Have you been able to learn from the mistakes before trying out again. If one isn't restrategizing then putting in more money might mean more loss.



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burgosmichael24

Having enough capital is very vital for the business. It is true that sometimes interest in debts takes most of your income. When starting a business it is very important to have a concrete marketing plan with ROI or Return Of Investment.



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Kakashi2020

I would have to agree that a business should have ample capital for 6 months operational expense. The smaller your capital, the riskier.



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overcast

If your offline business is about to start you have lot of things to spend on. Like say spending on people. Buying things required for the business. And the thing is that having enough capital can improve your business lot quickly. You have to understand that business success is not going to be easy whether you add money or not. It all depends on your approach in such case. I have learned from my experience that having capital and using it wisely is what makes business work quicker.



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Enyi

That's right it never about adding or just maintaining the funds one has. If it isn't about being outstanding and successful it better one doesn't add more money. I have always believed in more planning than funds.



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overcast

Yes. Having funds does not make business reach success. There are some business that make money based on how customers and the sales people work. In such case having more money for that business as funds hardly helps if the product is properly managed. If not then I guess there are issues in chains.



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luv2xacosta

I agree. Business will flourish when you know how to handle it. Not all those who put up business is successful its because of mishandling the money that is intended for your business.



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overcast

Yes. I think the process goes in every business. And one has to work around with the business success. Because cashflow is what many people don't pay attention to. And that means they have to work around different set of issues and skills. And they have to get things right in the due process.



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kaushikangara

Yes, it is always recommended to have a decent amount of money when starting a new business. You never know what costs you might incur and these go unaccounted most of the time. Having enough money in hand will make your business go smoothly and as per plan. It is also recommended to have some money in the reserve fund as it might come in handy if something goes out of plan if the business is unsuccessful and if it needs a revamp.



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Kakashi2020

You could have managed by just staying small until the time you've save enough to expand. Although, I also believe in the saying "Strike while the Iron is hot" and "Opportunity knocks once". But if I don't have the capital to expand then I'll just grow my business slowly.



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vhinz

My first business venture was also a failure. But in my case, it was not the capital that I'm lacking, rather it was the lack of knowledge and skills about the business that I've got into. The lesson I learned from that failure is that you have to understand the market, the product, and the operational expenses to see the business could really gain profits.



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overcast

I think if business can get the customer. Then they have business is how I think of things. If there are not customers then there seems to be no business. Because customers are what makes the business move. So cashflow understanding is what we need. If there is not managed cashflow. Then there would be issues in the chain of supply to delivery towards the customers. And then business fails.



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Alania

That's a very interesting story which I can relate to. I too used to do investments, but my mistake was the lack of certain budget. Only now I understand that I should have been better prepared, with a greater budget dedicated for business purposes. Invest only what you can afford to lose!



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Martinsx1

Seriously, if you fail to plan before getting into any business investment, you have already planned to fail.

This is the law of any business dealing. Planning is very important for any business survival because without it, no business will do well.



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Enyi

In as much as we might need more funds for our business I believe we should first plan and have a good grab of what we really what to do to really succeed. It might not be easy initially but with continuity we can make the best of it.



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Barida

Yeah, having a good plan of what we aim to achieve is something that is important. We should always look at ways that we can ensure that we work it out for the business that we plan to do as well.



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amelia88

An understanding of finances and how much capital you’re going to need is hugely important when starting a business, otherwise you stand to lose it all. I’d always recommend taking some time to understand a business from the financial sense or enlist the help of a professional who can guide you.



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Barida

Things have gotten better in this age that we are now. I think that we are in that period where you get to even have access to a lot of grants and loans that have soft interest rate. However, I learnt something from this on the need not to borrow much from outside when doing a business.



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Martinsx1

Exactly! When you run your business on debts, it's not going to do so much well because you are going to be running the business under pressure.

The thought of having debts to pay off even when the business is not doing well makes you lose focus to run the business well.



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overcast

Yes in past getting loans, getting people to accept us and getting product to sell was not easy. And that made many people quit on things. So it's better to play around with the business idea for start. And then launch the business when the time is right. But it depends on surrounding how acceptable the customer for the ideas.



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Martinsx1

It's very important to keep a decent amount of money as your business capital when starting a new business. It would help you to grow your business and survive your business challenges.

Running a business on credit isn't a good idea at all, when you fail to pay off your debts, you can't get new supply and it's the end of the business.



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rose61

Business capital should be more than enough.In fact,for the first six months, the owner should not take any money from the business for personal expenditure. All profits made at this stage should be ploughed back into the business.This will boost stock and also top up the capital of the business.



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Alania

Having enough wealth accumulated prior to starting that business is very important. Obviously, a business planned succesfully will bring profits, but it can also fail. It must be managed properly ahead. You can't just go out of the blue and start wasting mone on something not calculated.



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Jeane

When you are seeking a loan to expand your business you also need to take into account the profits you expect to make which should be more than enough to repay the loan (+ interest of course). Otherwise, I would rather not risk trying to expand the business and risk losing everything in case I am unable to repay the loan.

The best thing to do when you are getting too many customers is to refer some of them elsewhere. These other business will repay that favor later maybe so you'll be building solid business relationships that could prove profitable.



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esteban123

I think that having enough capital for a business is a must because it is a major requirement if we want to succeed in business. A certain business cannot meet its objective if it is experiencing some financial problems at the first stages of its operating period. That is why it is not advisable to start a business if we cannot really finance it well since it will be just a waste of time if we will do it.



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jaymish

Nice lesson to learn. It also reflects the problems entrepreneurs are going through today. Lack of capital is a real thing. Also most financial institutes that lend do so at extortionate rates that why moSt entrepreneurs prefer to borrow money or to invite venture capitalists who take up shares and share in the profits. This story is sad because you had the market.Next time try other solutions for capital like crowd funding.



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Franzel2oo

I've been thinking of starting a business some time in the future and I must admit, this particular aspect did not cross my mind. I can see how practical it is to have a rainy day fund set aside as part of your capital. It will be nice to not have to take loans to support a growing business and then lose all profits you make paying up that loan. It must have not have been easy for you to share. Thanks a million.



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