Financing methods for marketing activities of enterprises part 1

Before you face the competition as an entrepreneur, you must think: "How to finance the marketing of your own business?". The same question faces the owners of all businesses, both tiny and stock market giants.

Financing methods for marketing activities of enterprises

While the latter is quite easy to raise capital for development, in the case of small and medium-sized companies there is quite a problem. Of course, it is safest to organize, establish and develop a company using only equity. Unfortunately - most often capital is the thing we miss the most. Then we have to think about other ways to finance the business. Generally speaking, there are two basic sources of raising capital: BANKING, OUTSIDE BANKING - ALTERNATIVE

Outside banking financing sources

Starting a business, especially one- or two-person, it would be best if you did not have to take advantage of the bank loan offer, especially since for small and novice entrepreneurs - there is simply no interesting offer in banks. Obtaining even a small loan requires completing quite a large number of documents, and the value of collateral usually has to definitely exceed the value of funds obtained from the bank. That is why it is best to start by thinking about alternative sources of financing. But while running a business, a bank loan sooner or later, but unfortunately becomes a necessity.

Family, friends and acquaintances

By borrowing funds from a bank - you will have to pay everything back together with interest and additional costs. Borrowing money from family or friends - you will often have eternal gratitude. However, as the proverb says: "A donated horse does not look into his teeth." The choice is yours!!

contractors

The development of one's own company, including marketing, through trade credit, i.e. the so-called extended payment terms, is by far the cheapest source of capital next to family and friends. Many corporations, by building sales networks of their own products, support companies trading with them through trade credit. If only: you'll be able to convince the supplier to your own credibility and collect your own receivables faster than your payments to suppliers become due, this way of growing your business can bring very good results. Before you decide on it, however, think about what will happen if you do not have funds received from customers quickly enough. How will you get out of such trouble?

European Funds together with national funds

Small enterprises can obtain for development (in regions - voivodships) - up to PLN 8 million - details - click to find out more.
The advantage of using European funds is their non-returnability, while the definite disadvantage is the necessity to wade through piles of documents and break through the bureaucratic machine of institutions granting funds. In addition, you need to know that very few companies have been able to receive funding without external assistance in the form of consulting companies.

Private Funds (Venture Capital) plus the so-called Business Angels

These are private funds focused on investing in at least medium-sized companies. From the point of view of a novice entrepreneur, it can only be relevant if we want to start a medium-sized company from the very beginning (at least several dozen employees, annual turnover close to PLN 1 million). If you need less than a few hundred thousand to develop your own business, you should forget about this method of obtaining funds.

The article "Methods of financing the marketing activity of enterprises" is the first part of the series - I invite you to read the next parts of the "Ways to finance the marketing activity of enterprises"