How is your business doing? If you’re like many small business owners, you might think good sales means good business. “Sales are good, so we must be profitable.” But when cash shortages appear at the end of each period, you might begin to ask yourself, “What’s going on here?”

The truth is, revenue isn’t such a good metric for determining your venture’s success. That’s because it doesn’t factor in expenses, which are sure to be high for a growing company. Subtract those out and you’re left with profit. Sure, that’s a useful number; ultimately net profit does tell how much you make. But it doesn’t tell the whole story! 

Most small businesses aren’t eligible for second stage funding. It’s true, they just don’t deliver the type of rapid growth that big investors are looking for. But maybe your business concept shows great potential. If business is booming and you can’t keep up with demand, or maybe an exciting expansion opportunity appears, it might be time to make a pitch. 

This is where second stage funding comes in: your business is undeniably successful, but your current cash flow isn’t enough to fuel the growth. This is the second of a two-part series on business funding. Last time, we discussed a variety of methods used to personally fund small businesses. Those options allow you to maintain full ownership of your company, whereas here you must give up some equity. If you missed that post, you may want to go back and give it a read.

There are numerous ways to fund your small business; in fact, there are more ways today than ever before. This works to your advantage, but it can also make funding appear more complicated and daunting than it really is. We think funding your venture should be straightforward - after all, you do have a business to run. So let’s break it down and highlight your options.

This is the first of a two-part series on business funding. Here we will discuss first stage funding, i.e. personally financing your business. Next time we’ll cover second stage concepts, such as finding angel investors and venture capitalists.