What funding for startups to choose? Cash flow, working capital, cash in hand, receivables, duplicates, anticipation of money etc. When managing a small business, startup or MEI, the main idea is to grow it and then focus on increasing investment, but it is important to know that companies need first of all, to develop their sales capacity because they will have better prospects , more confidence and will not depend so much on other ways of getting money.
The best financing for startups
When thinking about how to fund a Startup , investment funds, incubators, accelerators or angel investors and venture capitalists, crowdfunding etc., immediately come to mind. However, although these alternatives are good options, they are not the only ones, there are other ways without having to rely on both banking and financial support, rather than sales.
Many consultants and startups experts insist that before focusing on increasing capital investment it is important for small and medium-sized businesses to develop their sales capacity to the fullest to succeed.
Sales are the best way to improve cash flow. Its profitability is its livelihood in the short, medium and long term. In addition to acquiring the first customers or users in case of services, starting to sell in advance allows to improve the product and still optimize processes, as the company obtains feedback from the buyers directly in their relationship base.
One of the most common mistakes made by beginning entrepreneurs and entrepreneurs, particularly those with technical training, is when they start the business, insist on spending a lot of time developing a product or service, than seeking to sell enough to keep the business and think financing models for startups and the ideal solution.
The sooner a startup starts to sell, the more it gets the following benefits:
Reduce risk and increase cash flow
For a startup or company that is just starting out, running out of cash flow or working capital to continue operating can be fatal. Starting to sell quickly reduces that risk and allows you to focus your best efforts on growth and business consolidation rather than just surviving the next day.
Although you can hardly replace the need to invest or seek for angel investors, using your own money or resources will mean you will not need as much money when raising funds, your financial autonomy will allow you to negotiate with better conditions if you have to raise capital for investments. If you can not, at least you will be sure of the survival of your startup thanks to its ability to sell well.
Increases valuation and investor confidence
More than any other growth metric, such as visits, customers, users, engagement, etc., sales prove to be of great value to investors and this may end up helping to close a good business deal. Nothing gives the investor more confidence than knowing and seeing that sales are solid.
Fast to learn fast
Developing sales capacity is rarely a waste of time when done properly. By selling a product from its first version, it is possible to know what feedback from potential customers and to understand if there is something wrong with the product, the market or the competition.
“The first version of a product can be sold immediately, it is possible to make promises, sell models to acquire customers that will be very valuable in the future”
To sell any product or service is not always easy, and if the first deals are not closed immediately in the first sales attempts, the knowledge generated from those contacts can be invaluable in improving the sales pitch and modifying the arguments or product based feedback.
With this in mind, changes may be made to the sales script or product according to what customers actually want and buy. Good luck!