• Written by News Company

We have no intentions of ever being the kind of news site that thrives of alarmist content, but there’s no denying that finding the funding to start a business is one of the more gut-punching minefields a person can ever try and survive. It only takes one misjudged decision, one wrong strategy or the slightest mismanagement and the whole thing can go belly up, as the 50% of failed startups will begrudgingly attest.

The problem is, most startups have bank accounts with near enough zilch to boast about and this means they have got to go and hook funds from some external source, and that’s where the everyday person starts to make more mistakes than Trump, which is a horrifying thing to accept.

To avoid slipping into this category, we have pulled together a list of business funding mistakes you need to a) know about and b) do everything in your power to try and avoid. You can’t make it as a startup without suffering a few blows, but making money-mistakes are the worst.

  1. Credit Cards Are Not An Option

Even if you have a foolproof strategy to pay off your credit cards at the end of each and every month, overloading your personal cards to fund your business venture is not the way to go. Ever. Sure, a little bit here and there may be fine, but taking on debts at that rate of interest has too many risks, and risks that will make you personally liable should your business stumble for any reason.

  1. Unsecured Loans Are Best

If business is a game of risk, and to an extent it is, then you want to try and steer away from any form of loan that will see you put up your personal assets as collateral. There is just so much that can go wrong in the world of business, especially as a startup, which is why you should look for details on how you can get an unsecured loan. Yes, they are harder to come by and even harder to acquire, but the risks are so much less. So. Much. Less.

  1. Know Your Expenses

Fixed and variable may just be terms that you hear get flung around, but it is so imperative you know which one you are opting for and what the difference is (spoiler alert: the difference is huge). If you aren’t keen on having risk, then the best option here is having fixed expenses, which is when you have a fixed amount to pay. Simple. That said, you should overlook variable expenses, which can fluctuate depending on your business. It’s definitely something worth looking into and wrapping your head around, that’s for sure.

  1. Careful When Selling Equity

If you’ve ever watched an episode of Dragon’s Den you’ll have seen people choosing to give up an equity stake in their business or idea in exchange for funding. Due to how preferential giving up a stake in something is, as opposed to taking on debt, it is one of the most popular funding moves in the world of business. However, you need to know what your limit is so that you don’t end up selling too much equity and thus watch your control-slash-income slip away.