4 Ways to Know You Need A Startup Business Loan | Startup Loan School
Summary
TLDRIn this startup school series, Porsha offers insights on determining the necessity of startup funding. She suggests asking if you can secure your first client before incurring expenses and if your business income can cover initial costs. Porsha emphasizes the importance of considering industry costs, business scale, and growth pace. She promises to explore various funding options in upcoming episodes, guiding viewers to make informed decisions about their startup's financial needs.
Takeaways
- 🤔 Determine if you need startup funding by asking if you can get your first paying client before incurring any expenses and if your business income can cover your expenses during the initial phase.
- 🎙️ Introduction to the 'Startup Loone School' series by Porsha, who will share six years of expertise in each episode.
- 💰 Startup funding is the money required to launch a business and can come from personal savings, community, investors, or financing.
- 🔍 The next episode will delve into the four main funding options available for startups.
- 💼 Understand that the need for funding is either self-funded or sourced from external parties.
- 🏭 The amount of startup funding required depends on the industry you are entering and the scale of your business.
- 🛍️ Some industries with high cost of goods will have higher startup costs compared to service-based businesses like consulting agencies.
- 🏠 Consider the scale of your business, such as whether it's home-based or requires a commercial location, and the number of employees you plan to have.
- 📦 Reflect on your inventory strategy, whether you want to produce items as they are ordered or maintain a bulk inventory.
- 🚀 Think about your marketing approach, whether you want to start slow or invest heavily in marketing from the beginning.
- 💡 Remember that starting small can mean fewer expenses but slower growth, while rapid expansion can make potential pitfalls less visible.
- 📚 Watch the next video in the series to learn about all the startup funding options available for your business.
Q & A
What are the two key questions to determine if you need funding for your startup?
-The two key questions are: 1) Can you get your first paying client before purchasing any expenses like inventory, equipment, and supplies? 2) Can your business income cover your business expenses while you're getting started, such as during the first month?
What does the term 'startup funding' refer to?
-Startup funding refers to the money required to get your business off the ground, which can come from yourself, your community, investors, or financing.
What are the four sources of startup funding mentioned in the script?
-The four sources of startup funding mentioned are: personal funds, community support, investors, and financing.
Why is it important to know the industry you are entering when determining startup costs?
-It's important because certain industries have higher costs of goods, which can lead to higher startup costs compared to a straight service company, like a consultant agency.
How does the size of the business you are planning to start affect the amount of funding needed?
-The size of the business affects funding needs because factors like the need for a commercial location, the number of employees, inventory management, and marketing strategies all contribute to the overall startup costs.
What is the trade-off between starting a business small and growing it quickly?
-Starting small means less expense and potentially slower growth, while growing too quickly can make pitfalls less visible and may require more funding to manage the rapid expansion.
What are some factors to consider when deciding on the scale of your startup?
-Factors to consider include whether you want a home-based business or a commercial location, the number of employees, inventory management strategies, marketing investments, and whether you want to be an independent business or part of a franchise.
Why is it recommended to ask yourself the four questions mentioned in the script?
-Asking these questions helps you to understand the scale of your business ambitions, the industry you are entering, and the potential funding requirements to get your startup off the ground.
What is the advice given for those who discover they need funding for their startup?
-The advice is to watch the next video in the series, which will discuss all the startup funding options available.
Who is the host of the 'Startup Loone School' series and what expertise does she bring?
-The host is Porsha, who brings six years of expertise in the field to every episode of the series.
What is the main purpose of the 'Startup Loone School' series?
-The main purpose of the series is to provide guidance and insights on various aspects of starting a business, including funding options and strategies.
Outlines
💡 Startup Funding Essentials
The script introduces the concept of startup funding, emphasizing the importance of asking two key questions to determine the need for funding: whether the business can secure its first paying client before incurring expenses, and if the business income can cover initial expenses. It also introduces Porsha, the host of the 'Startup Loone School' series, who promises to share her six years of expertise. The video aims to guide viewers on understanding the different sources of funding available, including personal funds, community support, investors, and financing. The script also touches on factors that influence startup costs, such as the industry chosen and the scale of the business, highlighting the trade-offs between starting small for less expense and slower growth versus the risks of rapid expansion.
Mindmap
Keywords
💡Funding
💡Startup
💡Expenses
💡Paying Client
💡Income
💡Industry
💡Cost of Goods
💡Service Company
💡Inventory
💡Franchise
💡Marketing
Highlights
Determining startup funding needs involves two key questions.
First question: Can you acquire your first paying client before incurring any expenses?
Second question: Can business income cover expenses during the initial startup phase?
A 'no' to either question indicates a need for startup funding.
Startup funding is essential for getting a business off the ground.
Funding sources include personal funds, community, investors, and financing.
The amount of funding needed depends on the industry and scale of the business.
Cost of goods in an industry can significantly impact startup costs.
Service-based businesses typically have lower startup costs compared to product-based ones.
Business scale considerations include home-based vs. commercial location.
Decisions on hiring employees or remaining a solo operation affect funding needs.
Inventory management strategies influence startup funding requirements.
Marketing investments should be considered when planning startup funding.
The choice between independent business and franchise affects funding needs.
Starting small can mean less expense but also slower growth.
Rapid growth can make potential pitfalls less visible.
Asking key questions helps determine funding needs and the scale of the startup.
The next video will discuss various startup funding options.
Transcripts
the quickest way to determine if you
need funding for your startup is to ask
yourself two questions one can you get
your first paying client before you
purchase any expenses like inventory
equipment supplies Etc two can your
business income cover your business
expenses while you're getting started
like that first month 2 3D fourth fifth
six if the answer to either of these
questions is no then you need funding
for your
[Music]
startup Welcome to our first episode in
our startup loone School series my name
is Porsha and I am going to be bringing
you six years of expertise in every
single episode so make sure if you are
enjoying the content you like comment
and subscribe let's get into it so what
is startup funding it's basically the
money that you need to get your business
off the ground this money can come from
yourself your community investors and
financing we're going to dive deeper
into these four options in the next
episode where we discuss your funding
options but right now the only thing
that you need to know is that when you
need funding for your startup it's
either going to come from you or it's
going to come from other people now how
much money do you need to get your
business started that's going to be
determined by two factors
one what industry are you going into and
two how big are you trying to
go so there are certain industries that
have cost of goods and if your industry
does have cost of goods then most likely
you're going to have higher startup
costs to get your business off the
ground versus a straight Service Company
for example like a consultant agency
like how much do you really think it
takes to get a consultant agency off the
ground versus a clothing business so
keep this in mind when you're
determining which industry you want to
get started with next how big are you
trying to go so do you want a homebased
business or do you need a commercial
location do you want to be a Onan or one
woman band or do you want employees to
get started with do you want to make
every product as it's ordered or do you
want a bulk up inventory do you want to
get started slow or do you want to put a
lot of money into marketing
do you want to be an independent
business or do you want to buy into a
franchise ask yourself all of these
questions to really understand how big
you want to go and therefore how much
money you need to get started and just
remember starting small does mean less
expenses it also means slower growth but
going too quickly can also make pitfalls
less
visible so make sure you're asking
yourself these four questions and you're
going to determine if you need funding
for your startup and and how much
funding you need for your startup and
then you can head over to the next video
in this series where we're going to
discuss all of your startup funding
options I'll see you there
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