Start Up FundingPosted by Celeste
Entrepreneurs have great vision and determination. This alone is not enough to secure funds to start a great business. In order to make sure that a small business venture is a success, the small business owner will need to have enough capital to get it off the ground and to keep it afloat until it can be nurtured to profitability.
How much money do you need to start your business?
This is a question that is best answered by going through the exercise of writing a business plan. The answers to this question may surprise you. In some cases it may be possible to organize the start-up of your business in such a way that you are able to start in stages and defer some expenses until the business has already started making money.
Where can you get the money to start this business?
Beg, borrow, or steal? (Well not the last one, but you are on the right track with the first two.) If your business plan is well put together and you present yourself properly to investors, you shouldn’t have to beg, either. In the early stages, you will typically be too small for any angel investors or venture capital firms, but you can begin with the financial support of friends and family. Small business loans are available, but banks generally like to see a good chunk of the entrepreneur’s own money invested in the company also. Another option for high tech start-ups is incubator funding. Incubators are places that nurture the start up from the start and help ready it for later stage funding .
Where should you avoid getting money to start your business?
Don’t do anything illegal. Don’t get yourself in a situation where your business is being used to hide illegal money. Crowd funding is gaining in popularity, but in some places (such as Canada) it is not legal. Don’t borrow money at rates you can’t afford to pay back. Finally, don’t put your family in jeopardy over your new business. If it would crush your family to lose the house or your retirement savings, then you need to reconsider your sources of funding and keep those things safely out of it.
How will you fund your next business?