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Create a Capitalization Strategy

Keeping a financial road map in your company's back pocket is always a capital idea.
1 min read
Opinions expressed by Entrepreneur contributors are their own.

A capitalization strategy is essential for anticipating long-term needs. It ensures disciplined spending, eliminating the likelihood that a business will burn through its capital too quickly, or obtain so little that it becomes hamstrung by funding constraints. Capital plans also help determine the best funding source for each stage of development. Instead of relying on leasing arrangements to fund equipment purchases, for instance, companies can gain more flexibility with a credit line for operating expenses. Or, if a business sees an eventual need for venture capital, it's not too early to start networking. Companies usually miss golden growth opportunities because they didn't seek investments sooner. Unfortunately, despite the need for ongoing strategizing, entrepreneurs often fail to recognize the importance of a long-term plan projecting future capital requirements. Don't join the crowd--take time to plan for what's coming up next and you'll be prepared to raise money when the time comes.

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