"How much money should I invest in my marketing?
Where can I find the funds I need for my next Facebook campaign?"
Have you ever asked yourself these questions? It's important to know that there are no set rules for calculating your marketing budget. It depends on your financial capacity and your business plan.
Our best advice for getting your business off to a good start is to diversify your sources of financing.
Here are four existing sources of funding for your marketing campaigns:
As a first source of financing, you can ask shareholders to inject new funds. This can be done either by shareholder advances (loans) or by issuing new common shares. These two sources of capital are the least expensive.
Requesting capital from your loved ones
If shareholders are not in a position to provide additional capital, the business owner can enlist the help of family and friends (commonly referred to as "friendly venture capital").
In return for this type of financing, the company can issue preferred shares (Menayot Behora - מניות בכורה), which carry a fixed rate of return. Despite the special rights they confer, these shares do not eliminate the risk inherent in investing in an SME.
Generally speaking, these shares do not carry any voting rights at General Meetings, but only a predominant right when dividends are distributed.
Loan from a financial institution
Financial institutions represent the third source of additional financing. This financing can take the form of an increase in the current line of credit (Misgueret Ashrai - מסגרת אשראי) or a term loan. The business owner must prepare a plan (to be presented to the financial institution) setting out how the additional funds will enable the business to prosper.Read also: 4 factors to consider when applying for financing.
It is also possible to obtain a term business loan on the "debt-free" portion of the equipment. A lender (banker or otherwise) may authorize additional financing on the unencumbered equipment, providing the company with new funds to carry out its marketing activities.
Aid from the Israeli government
Finally, a number of public organizations can help finance a company's marketing activities through conventional loans, an equity stake in the company or non-repayable financial assistance.[/vc_column_text][/vc_column][/vc_row]