At the end of the day there is only one thing that matters in the business world: money. Any product you make, any sales that happen, any deals that get signed, anything and everything that happens is driven by profit. The entire point of any business is to make money and the only factor we really determine when looking at how successful a business has been is how much money it makes. But there’s one thing that startups usually don’t have a lot of: money. Quite the problem, isn’t it? It makes us ask an important question: how important is funding for a startup project?
On the one hand, startups – being low on cash – might see funding as a godsend. It could be the light in the darkness; the life preserver in the cruel economic ocean. When someone donates money to you, invests in your startup, or provides funding in exchange for something it can save your business from collapsing into bankruptcy.
On the other hand, funding presents a few significant complications. Chief of which is accountability. People don’t want to just give you money and let you do whatever you want with it. That’s not how most human beings function. If you’re receiving money from someone – be they a stranger on KickStarter or a wealthy relative – then they’re going to expect something back. The more they give you the more they’ll expect. Some might expect a return on the money they gave you, others might expect goods and services from you (even if they provided the funding before you were even ready to make said goods), but they’ll all expect something. If you fail to meet these expectations then your reputation can suffer, or you could lose future support for your endeavors. Neither of these outcomes are ideal.
There’s also the issue of time. Fund raising can require a solid month of nothing but campaigning, if not more. This is valuable time that you might be ultimately wasting! Who knows what advances you could be making during this time spent on begging for cash? And if you fail then you might end up spending more money campaigning for donations than you actually make. In this scenario you’ve harmed yourself more by seeking funding than by trying to make do without it.
So how important is funding for a startup project? It all comes down to how desperate you are. If you and your business partners can manage to float the bill without funding, then that’s fantastic and it might be the best way to go! But that’s not usually the case and we all know it. At the end of the day, funding can still be the deciding factor in your startup’s success. This means that it will remain very important to you and your startup until you can outgrow the need for it. Ideally, you’ll avoid it, but realistically, you probably can’t do without some funding (unless you have already acquired significant savings).
As Startup Specialists we have used our knowledge and experience to set up a free portal of frank, accurate information. Do check out www.startupinthailand.com for more details on doing business in Thailand /Asia or for a free startup consultation.
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