10 Summary
In this course, it is only possible to skim the surface of all you will need to learn and every option available to you to finance your business throughout the different phases of its life. This session has introduced options from the very beginning of your enterprise lifecycle to those that become relevant in high-growth phases. The most important advice in this session is to understand your own business and your own values.
In this session, you have:
- recognised how crucial it is to manage cash flow
- looked at three important financial statements to help you understand how your business is doing – the balance sheet, profit and loss account, and the cash flow statement
- considered the different sources of funds available at different stages of the business lifecycle and how it is important to assess these in relation to your business aims and objectives, and the terms and conditions associated with them.
In terms of the business, you should consider its costs, expenditures and the pattern of sales and revenue. Managing cash in the early stages, and taking good decisions about how to finance growth and development, are key skills for an entrepreneur to learn.
If you decide that you will approach external investors, then it is essential that you understand both what they are looking for and what they can provide (remember it is a two-way exchange of value). You need to be clear about what you want to get from any deals, which may include what you are prepared to give up. This could be control, ownership and almost certainly a share of future profits. It is hard to imagine the return that those original Google investors may have amassed for the few thousand dollars of seed funding they invested. So timing of involving investors is also a consideration for you and them.
Seeking professional advice and having the confidence to interpret your own financial statements will be crucial steps in getting your business up and running and planning its future.
You can now go to Session 8 [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .