Getting your dream business on a sound financial footing

You’ve floated the idea of the business concept among friends, family, and trusted colleagues, and they said, “Go for it!” Now, it’s time to bring your concept to reality. Sounds easy enough, right?

No matter how small you think your business might be at the onset, it is important that you have enough capital. You’ll be surprised with the additional costs and the “little things” that you need for your business. Everything — from permits to  proper receipts, advance rentals and down payments, uniforms and others — can add up to quite a sum of money.

From the start, make sure that you’ve covered all these things. The last thing you want is to start your business with inadequate operating funds, leaving you dependent on sales for your payables. This is ill advised. It means you’re only focused on sales and marketing. Brand and product development and maintenance matters are left on the wayside.

Depending on the scale and investment required for your dream business, there are many ways to obtain funding. It takes into consideration your personal preference, management style, and capabilities.   


Not everyone intending to open their own business are risk-takers. Some, especially those who are first-time entrepreneurs, might not be comfortable with a loan, formal or otherwise.

After years of working and making ends meet, you might be in a position to set aside a tidy sum every month for your own business someday. In most instances, though, that route may not be ideal given that others may have the same business idea, or somebody else might take your ideal location. You don’t want to play catch-up.

It also means that the realization of your business, one that you hope will place you in a better financial situation, may take the back seat when unexpected expenses arise, say, your car suddenly needs a major repair, or your home needs new plumbing, or maybe a major illness strikes you or one of your family members. These may derail you from saving up for your business.


You may be the type who believes in your idea enough that you are willing to risk not only your money, but also the money of loved ones and relatives. Borrowing from relatives is quite common in our culture where parents or more successful members of the clan can be sources of capital.

In some instances, there is little or no interest, just plain goodwill. However, an informal financial deal may be burdensome, as it may mean that the relative may try to influence on what to do in your business since, technically, he has a “stake” in your business.


If you are willing to dilute your ownership of the business, you may sell a part of your share in the business in exchange for capital. Having partners may also be beneficial since you will have other people to help you make better decisions. This structure works for some but not for all.

Similar to borrowing from relatives, one can opt to get friends and colleagues as partners or investors. The dynamics of your group play a critical role in the success of the business. Your partners may complement your strengths and capabilities, but others may only cause friction and a lot of headache. Make sure you know your partners well.


Your credit card may also be a potential tool in financing your business. You’ll likely need to purchase equipment, raw materials, or even use it for cash advances to pay for services needed. The good thing about using your credit card is you can earn points that may be used for vouchers or other rewards. One enterprising family I met has all their business utilities auto-debited through their credit cards. They earn so much points that they travel on business class several times a year with the entire family.

This approach is ideal as it allows you to have a record of what you are spending on. You can even avail of installment payments. Most credit cards are also easy to manage since you have 24/7 access via ATMs and online. Just ensure that you are able to comply with the payment schedules so you won’t end up with penalties. You should also study interest rates as part of your investment.


Depending on the amount you need, banks offer both short and long-term loans that can fund your dream business. Nowadays, applying for a loan isn’t as cumbersome and full of paperwork as in the past.

Banks such as BPI Family Savings Bank have loan programs ranging P20,000 up to P2,000,000, collateral-free. My advice is to have a look at your projections in terms of loan repayments so you won’t be distracted from focusing on running your business. It’s important to choose a bank that you are comfortable with, one who can make it easy for you to take out a loan, and one who can give you sound financial advice.

Make use of loan calculators, too. It will give you an idea of the monthly payments you need to make, factoring in the interest so you know how to manage your cash flow.

Setting up your own business can be fulfilling. Make sure you cover all bases and that you know the right funding routes so you can focus on running your business. Think about the ideal set-up that gives your business an edge. With a sound business idea, a suitable funding source, and the ability to cope with the challenges of being an entrepreneur, you may well be on your way to financial success.