Importance of capital in business
I am just happy at this moment that I am gradually gearing up to good start. I have been having some issues of recent and that has really affected my publication. Just like as I have said above, I am now getting focus.
Just recently, Mr Kadaa walk up to me and we were talking about business and he told me how he wanted to start his business but he doesnt have the complete cash to run it. As he was saying it, I just don't know when I told him that No capital, No business. Sounds funny right, but that is just the bitter truth. There is no way you could start a business without having your said capital in place. Without long talk, the capital is the engine room on which business runs. It is the driving force that takes business to an apex height.
While talking about business, capital is so essential. It is the capital that paves way for profit, lost and all other things to pave in. Capital is just too important and it can't be over looked. When I wanted to start up my business, what I did was to take rough estimate of what the cost will be. After noting the cost, I get my fund in place and behold, the business was given birth to. You see that capital is a very important tool in business.
Why the capital is in place, before you put it to use make sure that you write the amount down. Make sure that this is documented. This is very vital. After documenting it, put it to use and make sure you document any thing you invest it on until you get it all exhausted. Now after that, the more you start receiving interest from tbe business, the more you should be removing your capital from it. For example, if you starts the business with $100 and in a month you were able to make $130$ from it, know that your gain is 30$ and your capital from it is $100. Remove the capital from it and keep it very well. Don't be force to ever touch your capital, it is very vital to the business. You will always run to it if the business has challenges in due time.
But let us take for instance, if you invest $100 in a business and at the end of the month you are having 30$. This shows that you have not make up to the capital which you use in running the business. Now what you have to do is to continue to save certain part of the money till it comes to the whole $100 which you initially use to start the business. For example if you start saving 20$ and re-investing 10$ back into the business, it will take you five (5) months before you will be able to make your capital back. The essence of saving your capital out of the business is just for you to be able to have back up in case there is issue with the business. Your capital should not be tempered with. You can save it in the bank. But what I always advised is that you should have a separate bank account which you shall be saving your funds to. Make sure you don't make the capital easily accessible so that you can't easily withdraw fund from it. That will help to ensure that it is saved for running the business alone.
I asked a friend of mine what he does with his business capital. He told me that at first when he started his business, then he was lacking the proper guide on how to run a business. He didn't save the capital, then the worst happened to it, the business crumbled. After this, he now got experience from such trade. What he now does was that he kept the capital with the bank, asked them to fixed it with some agreement tied to it. With this, when the business was having issues, he was able to run to it.
From the above we can now see how vital Capital is in a business and how to apply it properly. So are you running your business or about starting your business, make sure you don't fall into the category of that my friend, put your capital to good use and save it properly. You surely going to need it someday.
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Capital is really important in a business, I believe hardly will a business be successful without a concrete capital backing it up
Very important when it comes to business.
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TrufflePighaving a capital is vital to start any venture, but we must be clear that we should not depend only on it you have to keep working and focus on the the different areas requiring attention marketing, employees, customers, service, brands, etc.
You are right
I thought there should be a regular re-stocking in the business I have never thought about the importance of keeping the capital aside but I now know better.
Re stocking is good. Keeping your capital in terms of need is important too.