Cash Flow And Profits Did Not Go Hand In Hand The Financial Considerations: How Much Money You Need to Start a Catering Business

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The Financial Considerations: How Much Money You Need to Start a Catering Business

Your financial capabilities will determine the type of catering business you will be able to establish and sustain over the long term. When checking your finances for a business, you need to consider capital and start-up costs, as well as required taxes.

Start-up capital and costs

The cost of starting a catering business depends on how big you want to start. Would you like to be at home first as an independent caterer or would you decide on contracted catering from the start? Either way, startup costs include license fees, insurance, and promotions. The capital required also depends on your desired business structure. Of course, if it is a sole proprietorship, little or no capital is required. On the other hand, if you are going to register as a company, you will need more capital investment.

Tax liability

The amount of tax to be paid depends on the business organization, whether a sole proprietorship or a legal entity. However, it is best to find a chartered accountant to manage all your cash flows.

Financing the operation

Today, there are many ways you can finance your business.

The first is yours savings. There are people who diligently save money before actually starting to get out of debt. If you manage to do this, it would be the best, because in the first 5 years you will be focused on building the business and not on making high profits.

Another option is acquisition bank loans where the funds will be used as collateral. If you don’t have any business assets, your personal assets may suffice.

He is the third microloans. These are loans given by individuals or groups of individuals and not by banking institutions. This is good for people who have a hard time getting approved by other lenders.

The fourth is through factoring. This is considered one of the most innovative ways of financing a company today. It is also very flexible. It works by buying out debts owed to another at a discounted rate. This is what many have called cash flow financing or bill discounting.

A fifth means would be crowdfunding. As the name suggests, crowdfunding is basically getting people to fund your business. Ask them for help in the amount they can give. They can ask to become shareholders or just donate for free. It just depends on the agreement.

The final option is through search angel investors. Otherwise known as an angel or seed investor, it literally means having someone who is able to provide you with capital for your business. Most often they invest and in return become shareholders. But here you have to convince them that your business will eventually become successful.

So, are you financially able to start a catering business? Wwhich of the following would you consider to get good financing?

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