“Once I get the money I need, everything will be perfect!”

That is often the end goal for business owners they begin their journey of sourcing funds.

Ask them a question like, “So, what’s the plan after you get the funds?” and you’re likely to receive an irritated glare.

But here’s the truth: questions like that are essential.

Today, we’re not diving into exactly what you should do after raising funds because the answers vary depending on your unique situation.

Instead, let’s talk about the mistakes you must avoid while sourcing for funds or managing the money you’ve worked so hard to secure.

Pause for a moment and reflect.

Before you get the funding you’ve been dreaming of, here are some critical missteps to avoid:

1. Raising funds too early

Yes, money is crucial, but timing is just as important. Raising funds without solid plans and a framework for allocating them can lead to disaster. As a startup, it’s tempting to scramble for money right away. But without a clear strategy, those funds can evaporate quickly leaving you frustrated, discredited, and unable to raise more in the future. Before chasing funding, ensure you have a well-thought-out plan for how every dollar will be used.

2. Not investing in marketing

Money doesn’t solve all problems, it’s how you use it that counts. One of the worst assumptions you can make as a business owner is believing your product or service will sell itself. Allocating a portion of your funds to build a solid marketing structure is essential. Get the word out efficiently, attract your ideal customers, and create momentum that generates even more revenue. Marketing isn’t just an expense, it’s an investment in your business’s success..

3. Mixing personal and business finances

Don’t fall into the trap of thinking, “It’s all my money anyway.” Mixing personal and business finances is a surefire way to lose track of where your funds are going. Establish a clear separation from the start, even before you begin raising funds. This discipline will prevent unnecessary spending and give your business the financial clarity it needs to thrive. Protect your funds, and your business will thank you for it.

4. Lacking transparency in fund usage

Transparency is key to credibility. Investors are far more likely to trust you and even reinvest when you can accurately account for how previous funds were used. Track and record every expenditure meticulously. This isn’t just about pleasing investors; it’s about understanding your business finances and using them effectively.

 The bottom line

Raising funds is a huge win for any business owner. But without a clear plan for managing those funds, that win can quickly turn into a loss. Your ability to learn and apply sound financial management practices is critical to your business’s growth and sustainability.

 We’ve only scratched the surface here.

 Follow these tips to get your business funded out, not I'm out!

If you found this letter valuable, I invite you to take your fund-sourcing and management skills to the next level. Our EmpowerHer Programme could be just what you need.

 - Nat