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Your financial capability will determine what type of catering business you are able to set up and sustain in the long run. When examining your finances for a business, you’ll need to consider capital and startup costs as well as required taxes.
startup capital and costs
The cost of starting a catering business depends on how big you want to start. Would you prefer to be an in-house self-employed caterer in the beginning or go for contract catering in the beginning as well? Either way, initial costs include fees for licensing, insurance and promotion. The capital required also depends on your preferred corporate structure. Of course, if it is a sole proprietorship, little or no capital is needed. On the other hand, if you will be registering as a corporation, a higher capital investment will be required.
tax liability
The amount of tax payable depends on the business organization, whether it is a sole proprietorship or a corporation. Still, it’s best to get a certified accountant to handle all your coming and going money flows.
financing the operation
Today, there are many ways that you can finance your business operations.
the first one is yours Savings, There are people who diligently save money before actually starting so that they can avoid taking on debt. If you can do this, it would be best because in the first 5 years, your focus would be on building the business and not on making high profits.
getting another option Bank loans Where the asset will be used as collateral. If you don’t have any business assets, your personal assets may suffice.
is the third micro loan, These are loans provided by private individuals or a group of private individuals rather than by banking institutions. This is good for those who are having difficulty getting approved from other lending companies.
the fourth is complete factoring, It is considered to be one of the most innovative ways to finance a business these days. It is also very flexible. How it works is that you buy someone else’s loan at a discounted rate. This is referred to by many as cash flow finance or invoice discounting.
The fifth resort would be crowdfunding. From the name itself, crowdfunding is basically getting people to finance your business. Ask for their help in whatever amount you can. They can either ask to become shareholders or donate for free. It just depends on the system.
Searching for the last option Angel investors, Otherwise called as an angel or seed investor, it literally means someone who is able to provide you with capital for your business. Most of the time, they invest and in turn become shareholders. But here you must be able to convince them that your business will eventually become successful.
So are you financially capable of starting a food catering business? wWhich of the following would you consider getting good financing?
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