Financing is an important part of the business world. This is a part that can scare start-ups and experienced entrepreneurs. However, if the initial idea becomes a reality, or part time performances begin to require full-time attention, the need for fund-raising will appear. It’s a happy time! There are various financing methods, including crowdfunding, personal savings, credit cards, friends and family. Let’s take a look at the three most common financing methods and some matters to consider. Fund raising decision is an important decision. It will produce broad and long-term results and even extend to your personal financial security. Woocommerce is unique in all cases, so there is no formal recommendation on the store. Consider carefully and seek independent and objective suggestions from financial experts.
General financial type debt financing: loans obtained from banks or other institutions. Usually, I agree to repay the loan on average over a period of time. The bank charges interest at a handling charge. The bank may need to provide some form of guarantee for recovery (such as buildings, equipment, vehicles or other forms of property, which are relatively stable, predictable and of tangible value). The cost of being unable to repay the loan. Stock financing: considering the show like shark tank, most transactions are based on stocks. This is a place to exchange cash and other valuable things such as the expertise or contacts of new business partners and give up the ownership of the business part.
Revenue based Finance: this means that the organization provides unsecured loans based on the previous sales details of the store (no guarantee such as liability based Finance). The loan will be repaid to the lending institution at one time through a certain proportion of each individual purchase before paying off the debt and handling fee. Why consider financing? Most companies raise money to start or expand quickly. But some people will seek financing when they want to maintain their career or resume their efforts. This may be a smooth slope. If you are starting a new store or cultivating a store that is already on the road to success, fund-raising may be a wise measure. General reasons for financing include:
You need to raise funds for major purchase orders. Your dream has come true. A trusted buyer wants to buy a lot in your store. After the excitement subsides, you will be asked how to complete such a big convention. This is one of the most ideal financing options, because the relatively secure source of income is on the other side. You can repay the loan quickly (in a few months, not years), so you can raise money at a lower cost. Prepare for growth. You have considerable sales performance, and your number is increasing. You find yourself fighting alone to follow orders. You may need to limit the number of daily orders because there is no system or resource to process all orders. This is the problem of entrepreneurs’ dreams, but it is still a problem. Fortunately, this is a problem that can be solved through financing.
If you want to improve profits, e-commerce brands usually buy inventory in advance. Yes, some e-commerce solutions using on-demand printing can be perfect at startup. But with the growth of most stores and confidence in sales forecasts, they prefer to buy in bulk in advance. What’s up? Profits may be better. But this is where the growth pain worsens. If you order more, the profit will increase, but you will spend a lot of money in your pocket before making a single retail sale. It may take months to pay production costs and adjust the break even point. If you try to grow up, you are the party
God’s account will increase very thin.
It may help you raise more money in terms of purchasing, so you can solve this problem. This means better profits and more (eventually) profits. If you decide to fund the general considerations of e-commerce finance, you must choose from multiple options. Each form of financing has its advantages and disadvantages. Evaluate each item according to the most important factors such as ownership, control and risk, and find solutions according to the combination of situations. Below, we look at how the three main types of funding affect general considerations.
Ownership and control preferences: debt and income based financial disadvantages: when raising the required funds through stock financing, debt or income based model, the company’s full ownership will be maintained, but if it is raised with capital, part will be abandoned. Although there is no single calculation to determine the value of the company, conventional measures include past earnings, know-how, etc. If you are confident in the future of your idea, all proportions of ownership are important. Now you may want to give a 10% check for $10000, but if that 10% is worth $10 million in a few years, you may regret the decision.
It also means you can be the ultimate decision maker. You are the boss. Invite the whole team to a random and expensive reward dinner. Alternatively, screw all penny with the lock on the water cooler. No one bothered me when I called. If you have a strong vision, this is an important reason to keep your assets. For businesses with subjective decision-making ability (such as design), control is no less than anyone. Unfortunately, 100% ownership means that 100% responsibility also belongs to you. All areas of business ultimately depend on you. If you are the only one who has ownership, the extra night you need to sweat to overcome the trough or enrich the busy season is up to you.
Personal risk preference: if you choose stock and income based financial equity partners, you will promise to share compensation as the company grows, but also share risks. If you fail, you have no personal responsibility to repay your investment to your partner. This is a bad way for them, but their return on investment is unlimited and they look forward to billions of dollars one day. Revenue based finance also benefits store owners who want to minimize risk. Because the loan is repaid through separate sales, if the order slows down, the repayment amount will also slow down. If the store fails completely, the owner is not obliged to repay the loan institution.
Disadvantages: if you accept debt based Finance and existing debt based loans, the institution will \
Wayflier is a revenue based financial option, although there is no additional expertise to help with most other forms of financing. Wayflier to a dedicated team of successful managers and e-commerce experts and data scientists
Provide perfect coordination for entrepreneurs who want to build companies online. We are happy to join the woocomerce community, provide low-cost growth capital, support a new generation of excellent brands, find potential customers, maximize capital gains, and build business at an unlimited new level. \
