News3 Quick Tips For Budding Entrepreneurs

3 Quick Tips For Budding Entrepreneurs

Black female entrepreneurs are the highest growing group of business owners, yet there have always been great challenges when it comes to getting capital to help their businesses expand and prosper.

Black female entrepreneurs are the fastest-growing group of business owners, yet they have always faced great challenges in getting capital to help their businesses expand and prosper.
Funding Circle, a peer-to-peer lending platform where investors can lend money directly to small- and medium-sized businesses, has helped thousands of entrepreneurs secure financing needed to grow their businesses, increase staff, and support their local communities. (In fact, BLACK ENTERPRISE  featured one  entrepreneur who got her mobile dentistry venture off the ground to help underserved patients in Chicago.)

“When we started Funding Circle, the aspiration was to provide fairly priced term credit to high-quality entrepreneurs all over the country and all over the world. Women and minority entrepreneurs are certainly very underserved,” said Sam Hodges, the platform’s then-managing director and co-founder.

BE talked with Hodges about tips for budding entrepreneurs and how they can set themselves in the right direction in building businesses that are both sound and attractive for investment.
Keep good books and financial records.
“As a business owner, oftentimes you want to focus on customer and product, but the reality is in order to explain your business to an investor or a lender such as ourselves, people want to understand what’s going on with the business,” Hodges says. “Making sure your bookkeeping and accounting is in order is important.”

Scale your expansion and consider the competitive opportunities and financial resources that are available.
“We’ve seen entrepreneurs get ahead of themselves. They have a great idea, but they burn through too much capital quickly and then get into challenging situations,” Hodges says. “[Evaluate] the lifespan and discipline depending on the growth rate and on the opportunity you’re pursuing.”
Ensure your business is healthy and has a solid plan for expansion.
“[Be able to] show revenue traction, where there’s some level of revenue stability,” Hodges says. “The difference between equity and debt—you obviously have to make payments on [a loan], so if a business isn’t cash-flowing yet, that can be quite challenging.”

Bring great people into your business. “That’s not really a specific valuation factor, but in our experience in what we’ve seen in the hosts of businesses we’ve helped and that are doing well, great entrepreneurs attract great people.”
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Source: Black Enterprise

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