If you’re getting funding to grow your business, congratulations! Now, you have the resources to make your dreams come true—and maybe even some cash flow to get you started. It’s can be exciting as well as overwhelming as you figure out what to do with this windfall of money. So, here is how you can use free money for small business like a professional and ensure that every penny counts toward your future success.
1.Invest in Professional Help
Depending on your business idea, you may be able to outsource tasks for minimal cost. If that’s not possible, you should get an understanding of your skillset and seek out relevant training. You can also invest in books, podcasts, or seminars from more established entrepreneurs if you don’t want to take time away from developing your idea further. Be sure it aligns with your goals and long-term vision with any training program before signing up.
2.Test, Test, Test
Test your idea with potential customers to ensure that it’s viable. Even if you have solid research and market analysis, nothing beats learning what consumers think when interacting with your product or service. This is why companies run focus groups, A/B tests, pre-launch landing pages, beta tests, and so on. They want all the information before investing huge sums of money in developing products and services that don’t appeal to customers.
3.Get a Financial Planner
This specifically trained advisor knows how to build wealth over time through investing and other strategies. Advisors can help you set smart long-term goals, such as saving for retirement or your children’s college education, and help you make decisions aligned with those goals—for example, helping you decide when it makes sense to buy or sell stocks. Many people mistakenly think that financial planners aren’t worth it because they don’t have access to comprehensive wealth management plans; however, a planner can be an invaluable resource that keeps you on track.
4.Leverage Seed Funding
According to Lantern by SoFi, “Entrepreneurs with some initial capital will benefit from seed funding, which is money used to start or launch a new business.”. These investments typically come in exchange for an equity stake in your company—typically 5–10 percent. Getting investor backing can help you establish connections and build credibility among professionals who may later invest directly or refer other potential partners and clients your way. In addition, you’ll have money to sustain yourself during critical early months when revenue might not be there yet.
5.Insurance for Your Business
This includes auto, health, and home; liability is pretty cheap and smart to get. You may also need umbrella insurance if you have more assets than normal. And most importantly: if you have kids—start saving for college now.
6.Purchasing Raw Materials
Businesses need raw materials before they can begin production. Buying these materials in bulk can sometimes give your business a discount, but if you’re running low on cash, it may be time to seek out another option. You might be able to find similar or even higher quality materials at smaller suppliers and distributors, who might be willing to cut you a deal if they have extra inventory or room in their warehouse.
It’s easy for new businesses owners to get caught up in all of the details, but you should not lose sight of how best to use your funds. Businesses need money to survive and grow. Understanding different sources of startup funding is a good way to start your business on a solid financial footing.
