Create a Capitalization Strategy

Keeping a financial road map in your company's back pocket is always a capital idea.

A capitalization strategy is essential for anticipatinglong-term needs. It ensures disciplined spending, eliminating thelikelihood that a business will burn through its capital tooquickly, or obtain so little that it becomes hamstrung by fundingconstraints. Capital plans also help determine the best fundingsource for each stage of development. Instead of relying on leasingarrangements to fund equipment purchases, for instance, companiescan gain more flexibility with a credit line for operatingexpenses. Or, if a business sees an eventual need for venturecapital, it's not too early to start networking. Companiesusually miss golden growth opportunities because they didn'tseek investments sooner. Unfortunately, despite the need forongoing strategizing, entrepreneurs often fail to recognize theimportance of a long-term plan projecting future capitalrequirements. Don't join the crowd--take time to plan forwhat's coming up next and you'll be prepared to raise moneywhen the time comes.

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