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Fund a Pharmaceutical Company--The Process

By Edited Feb 4, 2014 0 0

There are many ways in which a pharmaceutical company can be funded. You can use personal savings, get a loan from a financial institution such as a bank, solicit funds from friends and well wishers. The initial capital to run a pharmaceutical company is high. One way of funding the company is through a loan from financial institutions or venture capitalists. If the company is already established, other methods of funding, such as investing the profits in shares and re-investing the profits into the company can be used.

Things You Will Need

  • Business plan
  • Business skills
  • Funds

Step 1

Come up with a business plan. Clearly explain the objectives of the company, marketing plan, financial plan and organizational structure. Indicate the amount of money required to start the company and the sources of this money. Show the monthly and annual projected profits. Also include potential risks and threats that may affect the company. A professional business plan is indispensable when seeking funds from financial institutions.

Step 2

Identify several reputable financial institutions. Consider things like interest rates on loans, the maximum amount that can be borrowed, the payback period and security (collateral) requirements. Shop around for the best terms. Be familiar with any penalties that can be charged should the loan go into default. It is also important to know which documents will be required during the loan application process.

Step 3

Apply for the loan. Get a loan application form from the financial institution of your choice. The business plan will come in handy when applying for the loan. Attach all the necessary documents to the loan application, most importantly those showing your personal details and assets. Ask for clarification on any points you are not sure about.

Step 4

Retain any profits earned. Once the company is established, retain or re-invest the profits in company operations. This shortens the period for repaying the loan and creates a reliable source of funding for running the company. Profits can be maximized by minimizing operating expenses and maximizing sales.

Step 5

Invest the profits in other areas. You can invest profits by buying shares in established companies.This earns dividends which can be used to fund your pharmaceutical company's activities. You can also invite investors to buy shares of your company to raise money.

Step 6

Advertise the pharmaceutical company's products. A good way of raising funds for an established pharmaceutical company is through advertising. Thousands of potential customers can be reached by placing ads online, in newspapers and in magazines serving the pharmaceutical industry. Array

Tips & Warnings

Hire an accountant or a business consultant to help you put together a good financial plan.


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