| Finding the capital you need to finance
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| | providers that youand your business can
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| your business canbe a confusing and
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| | help them make lots more money.
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| complicated process. Many great
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| | You must be able to show you've got a
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| ideasstumble at this stage of business
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| | real winner. Youmust do it without fluff
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| building.
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| | or a "come on, dream with
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| Yet, moving through this stage breathes
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| | me"embellishment. Therefore, you need a
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| life into yourbusiness - giving it
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| | business plan. Agood one that shows
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| forward momentum like a roller
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| | you've done your homework and knowthe
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| coasterbarreling down the first big hill.
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| | "lay of the land."
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| Finding money is just amatter of being
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| | Venture capital providers want to be sure
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| informed and choosing the right path
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| | their investmentis sound. They generally
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| formoney to enter the business.
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| | do this by taking ownership over apretty
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| There are several options available to
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| | big part of the company, and often
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| you when searchingfor financing. Some
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| | require controlof major portions of the
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| methods of raising funds are
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| | business. This is so they can lookafter
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| lessdifficult than others, but all
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| | their investment.
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| require some planning. Basicplanning
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| | Do they mess around with the little guy?
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| requires that you know the answer to
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| | On the whole,they don't want to fool
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| these threequestions:
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| | around with little investments andthey
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| 1. What will you use the money for?
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| | are bully on companies that have
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| You must know exactly where the money
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| | high-growthpotential. Gotta think big
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| will be used. Youmust be specific, as
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| | with these guys!
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| generalities are recipes for disaster.
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| | A few sites that help businesses and
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| Carefully identify the areas where money
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| | capital providersmeet are vCapital.com,
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| should flow intoyour business.
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| | BusinessFinance.com,and
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| 2. How much money do you need?
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| | ==> Angels
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| You should calculate your needs to carry
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| | An angel, or private investor, is a
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| you throughinitial startup and into your
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| | person looking forgood investment
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| first several months ofoperation. It's
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| | vehicles. This person could be your
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| necessary to have a realistic picture
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| | nextdoor neighbor, your dentist, or a
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| ofyour needs. Many businesses fail
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| | local business owner.
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| because the moneyruns out before the
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| | Overall, angels are not loan-makers, they
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| business reaches profitability.
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| | are investors.
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| 3. How will you pay back the money?
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| | As such, the degree of control and terms
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| You must have adequate cash flow from
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| | under which youreceive seed money for
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| your business torepay the money to your
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| | your business will depend on
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| source. Before asking for funds,make sure
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| | thearrangement brokered between you and
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| your fiscal projections and business
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| | your angel.
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| integrityare soundly argued in a good
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| | The key to finding an angel in your area
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| business plan.
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| | is networking.
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| An integral part of a good business plan
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| | While you may not have an angel in your
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| are financialstatements for your
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| | personal pool ofcontacts, by networking
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| business. You need to show sufficientcash
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| | with others you can create a wordof mouth
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| flow in your business for repayment. You
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| | campaign that reaches the ears of
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| do this withinformation as found in an
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| | privateinvestors.
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| income statement, a balancesheet, and a
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| | Moving outside of your local area, you
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| projected cash flow statement.
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| | can begin asweeping search for private
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| SOURCES OF MONEY
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| | investors at
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| Here are some options for funding your
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| | They maintain a list of thousandsof
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| small business:
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| | potential investors.
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| ==> Credit Cards
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| | ==> SBA Microloans
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| One form of personal debt you should
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| | The Small Business Administration may be
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| avoid is cashadvances on your credit
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| | helpful inconnecting you with a
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| card. It's very tempting and veryeasy to
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| | Microloan. These loans areadministered by
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| get cash this way. If you do this you
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| | non-profit organizations that want
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| should pray.
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| | tofoster economic development in your
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| Pray with vigor. Then ask for
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| | area. Contact yourregional SBA office for
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| forgiveness. This option isvery expensive
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| | information on this loan program.
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| and extremely risky. Credit cards
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| | You can find your local office using this
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| shouldonly be used for short-term
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| | online locator:
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| expenses, and not as a meansto entirely
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| | ==> Small Business Investment Companies
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| fund a start-up business.
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| | The SBA or your local Chamber of Commerce
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| ==> Friends and Family
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| | may be awareof Small Business Investment
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| Borrowing from your friends and family,
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| | Corporations operating in yourarea. These
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| especially therich ones, is a good way
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| | organizations are interested in
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| for new businesses to get money.
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| | revivingdepressed portions of your
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| It's not uncommon for relatives to make
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| | community, bringing employmentto places
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| low interest or nointerest loans to
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| | with high unemployment, or even helping
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| family members. Just make sure allparties
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| | certainminority groups. They will work
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| are aware of any risks. You don't want to
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| | with new businesses if youmeet the
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| alienateyour family if the business falls
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| | criteria they expect. You can visit the
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| on hard times and youhave trouble
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| | American
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| repaying the loan.
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| | Economic Development Council for a list
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| ==> Personal Savings
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| | of organizationsin your area:
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| You can use your personal savings or
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| | ==> Business Incubators
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| assets that can beconverted to cash. If
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| | Business Incubators help build new
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| your savings are already low, put offthat
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| | businesses. They canprovide help in all
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| vacation, drive your old car a bit
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| | phases of start-up, including funding.
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| longer, avoid largepurchases -- be
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| | Investigate whether or not an incubator
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| thrifty in all areas and you can
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| | exists in your areawith the SBA, Chamber
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| savefaster for your business. Keep in
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| | of Commerce, local universities, oryour
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| mind that most lenderswon't finance 100
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| | local municipality.
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| percent of your business, so you'll
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| | ==> Your Future Customers
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| needto invest some money yourself.
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| | Your future customers may be a source of
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| ==> Line of Credit
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| | money. This is aless conventional method,
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| If you have good credit, you may be able
| |
| | and your timing must be right
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| secure a line ofcredit from your bank.
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| | tocoordinate this type of deal. You
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| This can be handy in providing youwith a
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| | simply take advanceorders for your
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| source of working capital in the opening
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| | product and collect at the time of
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| round ofyour business.
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| | theorder. If you take enough orders, you
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| ==> Bank Loan
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| | can search for alending institution which
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| Using collateral, such as the equity in
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| | makes loans against accountsreceivable.
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| your home, you canapproach your bank for
| |
| | In the final analysis, the name of the
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| a loan against your business. Thismay or
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| | game is perseverance.
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| may not be an option for you, since some
| |
| | Get your name and idea out there in the
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| banksprefer to separate personal equity
| |
| | real world. Starttalking to people about
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| from business debt.
| |
| | your intent and become a player.
|
| ==> Venture Capital
| |
| | Have your business plan ready, be
|
| People with lots of money love to make
| |
| | aggressive, and you canget the money you
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| lots more money.
| |
| | need.
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| Your job is to convince venture capital
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| |
|
