As you research capital financing sources and sales growth decisions, let s explore how a start
Question:
As a startup firm does not have a history of steady revenues much less profits, it is difficult for management to secure startup capital investments in the firm during this stage.
So what other strategies might management employ to create needed capital? Some options may include:
Developing sales channels to support revenue through a specialized, experienced sales force. Crossselling product lines, partnering with other companies, to include suppliers and clients could lower operating cash outlays.
Focusing on products servicesbusiness areas with high margins
Closely managing working capital to include inventory and accounts receivables levels, as well as accounts payable
Providing an extended payment period on its purchases, or negotiating converting operating payables to an intermediate term, long term, or convertible note. On the other side of the working capital equation, management could negotiate a shorter receivables cycle or cash sales to customers.
Reinvestingplowing back a high proportion of earnings
Maintaining a low debtto asset ratio
Maintaining a high return on equity.
Seeking government or industry loans may provide some special options. State or county governments may provide some tax incentives.
What are some other options for management to secure startup capital
Expert Answer:
