Budget carefully to reduce the cost of financing

Financing cost is a certain price to be paid in the form of interest, dividend and other forms after obtaining capital. Using the difference of cost rate of different capital sources in time, space and industry, selecting lower cost capital sources can effectively reduce the financing cost.

In the early stage of entrepreneurship, the cost is considerable. When raising funds, we should not only consider the cost of raising funds, but also count this part of funds into the scale of raising funds. If we spend a lot of money in the early stage of entrepreneurship, it may lead to insufficient fund-raising or forced to expand the scale of fund-raising. This will increase the cost and reduce the profit in the future.

Careful calculation and economy are two essential points in doing business. To be careful, we must start with many details, such as streamlining personnel, reducing expenses, giving full play to everyone's potential, and making rational use of human resources. In order to reduce the cost of financing, individual proprietorship and partnership investment should arrange the total amount of capital, and make the best allocation of capital to achieve the best effect. However, we should not blindly pursue cost reduction, lack of financing, resulting in future business failure.