Funding a business sometimes requires an unorthodox approach such as Forex trading. Lenders are not as quick to hand over cash these days and many SMEs struggle to secure the funding they need to grow their business. Unless you have an excellent credit rating or plenty of equity, your high street lender might not give you the time of day. Of course, traditional business loans are not the only show in town.
Think Outside the Box
Crowdfunding is becoming increasingly popular these days, especially for new startups. However, to be successful on a crowdfunding website such as Kickstarter you need to devote time and energy to creating the perfect pitch. People won’t back your business unless you are persuasive and can back up your ideas with solid financials. For a business owner struggling to keep an SME afloat, time is probably something you don’t have much of.
One strategy you may not have considered is forex trading.
Forex trading platforms are accessible to anyone and everyone, from students and stay-at-home moms to business professionals and savvy tech geeks. Anyone can set up a demo trading account on a forex trading platform. It’s quick and free, and you don’t need any previous experience to have a go. To be successful, all you need is a willingness to learn and an appetite for risk.
There are some great learning resources out there. Sharptrader offers training courses for beginners. YouTube also has some interesting video tutorials and popular trading platforms are all full of educational resources to give beginners a helping hand.
Cash Flow Forecasts
All business owners need to keep a tight rein on the financials. If you lose sight of your income and expenditure, it won’t be long before one exceeds the other, and not in a positive way. Cash flow is the lifeblood of any successful business. Without adequate cash reserves, you can’t grow your business or even service your current debts. For this reason, it is essential that cash flow forecasting is part of your investment strategy.
Investing in forex to fund business growth will only work if you are disciplined. Never invest money you can’t afford to lose and make sure all profits from your trading activities are reinvested in the business. Once you wrap your head around that concept, you are ready to begin trading.
Open A Demo Account
Smart business owners start off with a demo account until they understand how forex trading works. Successful traders understand the impact of market movements and how politics and economics influence currency prices. It is important to get to grips with financial data on a daily basis. Until you do, it is very difficult to predict future trends in the forex market.
If you regularly trade in international markets, you are already one step ahead. Many SMEs are used to dealing with currency platforms on a daily basis, as FX platforms offer a personalized service to help their clients. Taking the next step and opening a forex trading account is a natural progression if you are used to dealing with foreign currency transactions.
Be A Careful Investor
However, before you begin forex trading, decide in advance how much you can afford to invest. Do not risk your business’s security by investing the money you need to pay the wages and suppliers. Instead, create a budget and transfer a small amount of cash into a separate investment account.
Only trade what you can afford to lose. Start small and learn the ropes on a demo account before you trade using real money. And remember, you will lose money; all experienced traders do. The key to success is to quit while you are ahead and not let your ego get in the way.