Ways to get Your Business Funded
When you decided to become an entrepreneur, you probably didn't think that coming up with funding would be difficult. It would be a lot easier if we all had rich family members willing to help us out, but that's not the case. There are precious few options for funding a new business; here are some of the ways to get your business funded.
*Dip into your personal savings. If you are thinking about leaving the 9-5 world to start your own business, you will first need to lay aside a substantial amount of cash. When you really want to be an entrepreneur, you will be ready to make certain lifestyle and financial changes to free up more money to go toward your business effort. Cut out unnecessary spending and save your money so you can pay to start up your business; ideally you will want to set aside enough to pay your living and business expenses for six months to a year.
*Personal investing. When starting a business, look first at the resources that are closest. Any person can become an investor, such as a colleague, friend or relative. You may be surprised to see who will help you out- many want to be part of a successful business but are unwilling to do the work. Use this tendency to your advantage by taking on investors. Ready your business plan, share your ideas with them, and make a great sales pitch. Be sure to tell them how they will benefit and when they will start to see returns. It is a lot easier to convince someone you know to take the chance than it is a stranger.
*Get a bank loan. Go to a local bank and ask what the qualifications are for a business loan. Your credit history, business plan and level of collateral will come into play when determining eligibility. To increase your chance of approval, go to an SBA office and talk to a counselor. They will go over your business plan to ensure that it has all the parts necessary for the bank to approve your loan.
*Try for a home equity loan. If you are lucky enough to have equity in your home, you can get a loan to help fund your business. It's easy to get money when you can prove that you have sufficient assets and collateral to offer; home equity loans are among some of the easiest to get, but in today's depressed housing market it can be hard to prove your equity. If you can qualify, the home equity loan should be one of your first funding options.
*Take a second job. You may want to quit and direct all your attention to your business, but it may make financial sense to keep working long enough to help pay for it. When starting a business, you will need to cover your expenses both personal and business related. If you take part time jobs to keep the money coming in, you can pay your expenses and build a foundation for continued success.
*Investors. Despite the poor economic climate, there ARE people that have money to spend. No matter what kind of investment help you are looking for, be ready to relinquish control of a piece of your business in return. However, you should have a plan in place to buy out the investor when your business takes off. Before accepting an investor offer, be clear on what they expect in return. Some investors prefer to be silent partners, but others will desire a more prominent role.
*These days, there are social networking type sites available that can help you raise start-up cash. Simply go online, make your sales pitch and get funded by your peers. Potential entrepreneurs can raise thousands by convincing others to support them. There are many sites, such as Loanio.com and Kiva.org that can help.
You shouldn't let an absence of funding keep you from starting your new business. Use the resources above to secure the money you need and bring your dreams to life. Have a good business plan in place, sharpen your sales pitch, and then get out there and get the financial help you and your business need.