Business creation: the main financial difficulties

If the myth of the business creator alone in his garage and quickly projected into the firmament leaves you dreaming, the reality of business creation it’s more chaotic. Indeed, any entrepreneur faces various pitfalls and difficulties turn your idea into a project and then into reality. Funding in particular is often a cause for concern.

Discover the financial barriers that most entrepreneurs encounter when starting their own business.

Finance the creation of your business

Financing is one of the main obstacles to starting a business. This is a difficulty that often persists during the development phase of the business.

There are several reasons for this obstacle:

  • A lack of contribution personal;
  • Of the refusal of loans professional banking;
  • Difficulty inside raise funds necessary.

To maximize your chances ofget a bank loanit is necessary to respect some principles: propose a minimum contribution of 15 to 30% of the total financing requirement and make sure that the company proves to be sufficiently profitable to allow repayments (in general, the amount of the credit must not exceed 4 a 5 times the self-financing capacity).

Find financing outside of a professional bank loan

There are so many assistance in starting a business. Make sure you meet the conditions to get them.

In case of refusal of the loan, take advantage of the other financing possibilities:

  • Request a accompaniment by a professional, an association such as BGEnetwork together for aGir et Entrepresere or BPI France, or even an organization (Chamber of Commerce and Industry, etc.).
  • Call the fund-raising.
  • Continue to office worker part-time to maintain a minimum income.
  • Joint in order to multiply contributions and bank guarantees.
  • Submit your project to business angel.

To notice: the personal business account (CPA) can assist you in funding the call of a professional who will offer you a financial and legal support. It will also support you in managing your company during its creation.

Success in your market research

Failure to start a business is often based on sloppy market research.

Before any realization of your project, you must check its feasibility and, above all, its profitability: study the idea in real conditions in the existing market then analyze the strengths and weaknesses of your product.

Also, make sure your profile matches the business you are starting and its context. Use the testers and work on their feedback.

A market research Done right is the key to companies finding their target.

Develop a realistic business plan

Companies based on realistic business plan get around a big obstacle. In fact, it will translate and measure the impact of your project financially.

You will establish a provisional plan (balance sheet, income statement and financing plan) and will accompany it with an economic component.

It will be covered:

  • Your strategy;
  • Your contribution to the market;
  • What sets you apart from the competition;
  • Your guideline.

You will record your strategy, your ambitions, your business model and the profitability of the project. You will move forward with a clear vision and will be able to anticipate.

Evaluate your working capital needs correctly

the working capital requirement or BFR it must be evaluated very precisely. It should take into account all expenses to be paid at the start of your business:

  • Warehouse purchases;
  • rentals;
  • VAT credit and other taxes;
  • Credits…

It will therefore be updated very regularly to stay as close to reality as possible. The BFR allows, at the time of launch, to predict exactly the necessary amounts and not to run out of money during a transaction.

Note, however, that there are ways to do this create or take over a business with little input.
Becoming a business creator means entering a daily learning process, which requires both anticipation and adaptation.

(Photo credit: iStock)

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