"According to the United States Small Business Administration, the number one reason that businesses fail is poor management. The second reason? Not enough financing or financing coming at the wrong time. When you start home based business, financing should be an important consideration. You will have to make sure you have enough capital to get your business moving, but you will also have to educate yourself to manage that capital well.
There are two types of financing available when you want to start home base business, equity and debt financing. Your business�s debt-to-equity ratio is important to determining what type of financing you will need to start home based business. The debt-to-equity ratio is the dollars that you have borrowed compared to the dollars you have invested in your business. The more you have invested to start home based business, the more attractive you will be for financing. Plus, if you have a high ratio of equity to debt, you should probably seek out debt financing to start home based business. However, if you have a high proportion of debt to equity, you may want to increase your capital, or equity investment, to gain more funds. This will prevent you from becoming over leveraged."
Read the rest of the article here: Start Home Based Business.
Wednesday, February 01, 2006
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