Every day, new advice for entrepreneurs pops up online. And invariably, much of that content focuses on one of the biggest challenges to growing a sustainable business: funding, funding, funding. So what advice should you believe, and what should you take with a big grain of salt?
In reality, the secrets to financial success don’t always involve reinventing the wheel. Here’s a quick list of tried and true funding tips, straight from famous entrepreneurs who have been there, done that—and succeeded.
Look beyond a savings account to grow wealth
Mark Cuban encouraged business owners to take a risk when it comes to saving. In an interview with Money, he asks: “Can you save a million dollars? You can, but you really have to be disciplined. You also have to be a little bit of a risk taker. Part of the risk is maybe putting money into a low-cost mutual fund.”
Cover your bases before launch
Ed O’Keefe offers this advice about planning ahead: “Before you launch, make sure you can cover all your expenses for as long as necessary until the business sees a profit.” Even if a business finds success early on, profit sometimes won’t appear until months of sustainable growth. Know your expenses and have a plan for covering these expenses before you start investing.
Don’t give up your equity unless you’re absolutely sure
Elon Musk’s journey is a cautionary tale for CEOs who are looking for funding. His career with his first startup (Zip2) ended when his lack of equity left him powerless on the company’s board of directors. He met a similar fate with his next venture. Conversely, Mark Zuckerberg maintained control of Facebook throughout its growth and is still the central figure in the company. Don’t let the hunger for funding compromise your position in your business; in some cases, a business loan is a smarter option than getting an investor. (And remember, the wrong investor is much worse than no investor at all.)
Invest in yourself
Keeping equity in your company is one way to invest in yourself and your growth. Warren Buffett has echoed these ideas in an interview with Forbes: “Nobody can take away what you’ve got in yourself, and everybody has potential they haven’t used yet.” Investing in yourself can look like many things: self-care, a healthy work-life balance, and an honest assessment of your goals throughout your growth.
Find motivators outside of finance
Why was Steve Jobs motivated to grow Apple? It wasn’t dollar signs. He puts it this way: “I was worth over $1,000,000 when I was 23, and over $10,000,000 when I was 24, and over $100,000,000 when I was 25, and it wasn’t that important because I never did it for the money.” Find motivation outside money; once you see profit and can cover your expenses, you will need something else to keep pushing forward.
Delegate, delegate, delegate
Delegation is key to investing in your team and your business, says successful entrepreneur Keith Cameron Smith. “Having a belief that no one can do it as well as you is ignorance. The world is full of talented people.” Billionaire Richard Branson feels the same, writing, “If you find people who can take on tasks you aren’t good at, it frees you up to plan for the future.”
Consider the funding you need for your business
In a world where startups are pushing for VC funding, remember that there are other avenues available. SBA and other loans can give you the funding you need without heavy pressures to repay immediately. And as most successful entrepreneurs will tell you, giving away equity and partnering with an investor are both decisions that could affect your finances for years to come. In short, don’t take these decisions lightly.
Are you ready to get savvy about corporate finance? Contact Cornerstone Capital Lending today so our experts can help you make the right choice for your business’ growth.
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