Funding for business
It's the tune of the day. Need extra funding, go to the funding culture. It seems to be everyone's first thought, for governments, for institutions, for businesses and for people.
But the economy declares the day is done for funding. Even crowd funding is starting to have mixed results, instead of being the saviour it was hoped to be.
But in business, seeking funding from the public shouldn't be happening. Most businesses have more assets and resources than people have, and the business answer should be to use its resources and assets to generate extra income. Else, if it can't, how can it be said that the business is profitable, or capable? A business should be offering something to the public for a reward.
And if the business wants to flex its muscle, then it can go into an "off-topic" mode, doing things that the business doesn't normally do, or doesn't want to do. But, given the resources, it could do something different and earn a few extra bucks.
It's amazing what can be achieved with some creative strategy. Imagine holding an open day? Or a fair related to your business, or a trade show where other companies pay for the use of your assets. And the public paying a small fee to be involved, and buying cups of tea. There are many ideas for all businesses to raise cash, though some, granted, are more difficult than others.
It's many a time that we've seen businesses transform. They've had to transform because of legal reasons, regulatory reasons, financial reasons, or even because their industry has had its day. On the other hand, we've helped some reinvent their industry.
And if businesses can achieve activities such as those, then why can't they regenerate or go off-topic to raise funding? And don't businesses generate funding by nature? Imagine the achievement when you've asked your business to change to generate funding, and it delivers.
With funding for a single project with a finite life, it’s probably wiser to use conventional bank funding. It’s easy to account for, you know its lifespan, and you know the limits of the ups and downs. But long term funding puts your business at risk, particularly if there are any other risks to the business, and such funding becomes inadvisable.
Better strategies for long-term funding include the likes of business development, off-topic events and so on because you can quietly grow those into powerful mechanisms that can provide long-term funding for your business.
Chalestra are specialists in strategy management, and can help you deliver strategies to raise funding. Call us for new and fresh ideas.