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INITIAL INVESTMENT | HOW TO MANAGE YOUR INITIAL CAPITAL INVESTED

Updated on January 10, 2011

Initial investment is that startup capital that a business man or business woman put into his or her business at the beginning of business. A lot of people find it difficult to raise this initial investment and those that were able to raise it end up mismanage it and go through financial distress.

In fact, raising initial investment and subsequent management of the money raised is the main problem that much entrepreneur faces and this article is written for them. However, if you are not an entrepreneur, there is no law that is forbidding you from reading further as you will surely find grain of truths that will help you in your fund raising quest.

10 WAYS TO RAISE INITIAL INVESTMENT

There are good number ways to raise finance and get your business started and running. Some are easy to get while others are not. Some ways of raising initial investment are suitable for small business while some are not. This article is written to give a broader view of fund raising.

  1. Savings
  2. Equity financing
  3. Venture financing
  4. Business angels / investment partnership
  5. Retained earnings
  6. Debt financing
  7. Bank overdraft
  8. Funds from relatives
  9. Bank loan
  10. Trade credit

OTHER WAYS OF RAISING MONEY

  1. tax planning
  2. sale of corporate bonds

HOW TO MANAGE INITIAL INVESTMENT

The most efficient and effective way of managing initial investment is to have a good financial management system on ground.

Working capital management is an all encompassing initial investment fund management tool that every investor cannot do without. You need working capital management technique to properly manage cash, receivables, stocks/inventories, payables, etc.

You even release tied up funds through quality working capital process. Debt factoring is a very good means of releasing tied up funds that would otherwise be used to finance the operation of a business operation.

You can also use debt discounting as a way of raising fund for your business irrespective of whether it is an old or new business. Debt discounting and debt factoring is not the same thing.

Initial investment is not what any serious minded investor should take light. And you have just proved your worth by investing your time into reading this article. And I would still encourage you to read up other materials on initial investment finance by reading 11 ways to finance small businesses.

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