As a business owner, you know how important cash is.

It’s the lifeblood of your business, and it’s vital to its success. You need to use it to pay your employees and contractors (and yourself), keep your doors open, and keep your customers happy.

And if you don’t have it? Well, that’s when things get scary.

Luckily, there are a lot of different ways to fund your business.

Ideally, funding for your business should come straight from your customers—that way, you never have to worry about making a payment to a lender or the pressure of providing a return to an investor.

However, if you need capital to get started or make improvements, or find yourself in a squeeze, external funding may be necessary.

If you are looking for funding, continue reading.

5 Key Considerations Before Approaching Investors

How much money you need—and when you need it by?

Write down all of the expenses that you want to cover with external funding, and then add an extra 10-15% on top of that number just in case. Plan ahead of exactly how you’ll use the money, and what you’ll do if you don’t get it, or only get a part of it.

Be realistic about how long it can take to get funding as well. How will you keep your business going while you wait for funding to come through?

What kind of funding is best for your business type and for the amount you need?

There are a lot of different ways to fund your business: loans, grants, credit lines, investors, and more. It’s important to know what type of funding is right for you, and the best way to determine that is by doing your research. Last week’s newsletter had a number of resources to get you started.

What do you need to prove that you’re financially responsible?

Before giving out any loan or line of credit, lenders will want to see proof that your business is viable and that you’ll be able to pay back the money they give you. This means having a solid business plan in place, but it also means having a great credit score and the ability to show that your finances are in good order.

Investors will be looking to see if you can execute on the vision and plan for your business, and get them the return on investment they are seeking in the timeframe they expect.

You’ll probably need financial projections showing that you can pay the money back or get that return on investment.

What are you willing to give up?

Money from external funding isn’t free.

With grants, there may be reporting and other requirements that take up time and energy.

With loans, you may have to put up some collateral, and you’ll have to pay interest and make the payments on time, meaning your cashflow will be impacted for the duration of the loan.

With investors, you have to give up some percentage ownership in your business, potentially the majority. They may also want to be active in decision-making, and you will need to report to them regularly on your progress.

Crowdfunding usually requires you to give away bonuses and gifts. Make sure you know how you’ll pay for them now and in the future.

What’s your pitch?

Funders will want to know why they should give you their money. In order for them to believe in you and your vision, you will need a pitch that convinces them. Look for example elevator pitches and pitch decks in your industry and put in the work to create a message and presentation that shows you are a good investment for them.

Once you have these five things clear, getting funding can be a lot of legwork. Researching opportunities, applying, networking, making presentations, more applying and more networking and more presentations.

You are likely to get rejected a lot along the way. Potentially a lot. Be prepared for that and don’t give up.

Determination and commitment will be necessary, but you will succeed if you stick with it and push through the challenges.