Starting an Internet business is an exciting venture.
But the risks are also high.
Most people fail when they start online businesses, and then they find all sorts of excuses.
The number one excuse - "we used the wrong business model.
" There are a ton of others, like "we are selling the wrong products", "we priced our products incorrectly", etc.
Some of these excuses may be valid and they all sound reasonable.
But they usually do not cause a business to go under.
So what is the number one reason for failing? Poor cash flow management.
Cash flow is like the blood flowing through a business.
If there is not enough cash flowing into the business, the bills catch up with the business and the music suddenly stops playing abruptly.
If you want your Internet business to succeed, you need to learn how to get financial support for your website.
Starting an online business is not just about buying a domain name and then hoping people come to your site to buy something.
You have to sit down and think ahead.
Think about the challenges that you are going to face.
You will find financial challenges to be the most formidable.
When you have strong cash flow, it's easy to work on other parts of the business.
Here is how to strengthen the financial position of your web business.
1) Savings.
- When starting out a new business, the source of money that is most readily available is your own savings.
Sometimes, business owners strike out without having adequate savings and this can be disastrous.
The owner runs out of money within 6 months, when he could have been profitable if he lasts for 12 months.
So make sure you have enough money in your own bank before striking out.
2) Angel investors.
- These are friends, family members and business associates who are willing to support you financially.
In return, you can give them stock in your Company or an option to repay the money with interest later on.
In other words, these angel investors can either invest in your Company, or they can loan you the money.
You have to decide which option is best for you and your business.
You can easily get cash quickly from angel investors since they already know you.
3) Existing clients.
- If you are starting a web business in familiar territory, you may already know some people who can help you out.
The best thing to do is to approach your clients before you even start your business.
Talk to them about your intentions.
And make sure that they know you are serious about starting a Company.
Cut them irresistible deals to entice them to sign contracts with you once you start operations.
And when you officially open your doors, you already have a handful of lucrative contracts that will help with your cash flow.
4) Loans from financial institutions.
- This should be your last resort since such loans usually require time for discussions and due diligence.