March 21, 2019 | By Mason Roberts
Having a good idea for the start of a small business is a great place to start a successful career. Like many other successes, your career can begin just from one amazing, profitable idea. So, if you have one, now what?
The next step in the process is the search for funding. You need to figure out a way to fund your small business in whatever way necessary. When creating your own business, you need many things, such as an office space, a website, reliable staff, and of course cash for rent and such things. There is no going around it. If you are interested in starting your own small business, you need money, no matter the field.
Scrape Up Whatever You Have
Starting a business, for many entrepreneurs, can be a bit of a challenge, financially. The first thing you should try and do is find any money you can. Look around everywhere possible for personal funds you can use. Sort out some money in the obvious places, such as your savings and credit cards.
This is a great idea for many entrepreneurs. Many keep this going until their business begins to earn revenue. If this is possible for you to do, as a small business owner, then you should. Overall, it will save you money. If you begin borrowing money immediately, your rate amounts will grow before you know it. Also, if your business is a startup, it can be a bit difficult to be approved for funding before any proof of revenue is available. Working with your own funds for as long as possible is a good way to keep what you owe low in numbers.
While finding funding in your personal finances is a great idea, it can tend to be slower than borrowing money, as you are more cautious of running out of cash. Borrowing capital from outside sources is a quick way to get your business on a roll. Eventually, you may have to figure out alternative funding options than the one you have initially chosen. There are plenty of choices you can explore when it comes to funding your small business.
Option Of Friends And Family
When entrepreneurs hear the option of asking friends and family for money, their first thought is to immediately shut it down. Many think that it is pretty much the same thing as going to your bank all the time, and inviting your direct funder to family parties. It can get awkward.
Though this is true, asking someone you are close to for initial funding is a great first step in starting your business, rather than first going for the traditional funding option. It wouldn’t hurt you to ask around. Have a good pitch ready, you may have some cousins or aunts who are compelled by your idea and want to help in any way they can.
This is a viable option for many, but before you decide to take advantage of it, conduct a business plan. Make sure you have every question that your friends and family could possibly ask, answered.
What is your main goal? How will you make money? Are you selling something? How much will you charge? Will you pay them back over time? If so, how much of a percentage of sales will they receive?
These are all questions that any sensible person who is potentially handing over thousands of dollars will ask you, so expect it. When asking them to meet you to speak, treat it as if you are requesting a meeting with a traditional bank. Let your friends and family know that you can be trusted when their investment in your small business.
Look For Funding Locally
Being a small business owner, you should check out any small business development centers that are close to you. If you live relatively close to a university, it is a smart idea to check there. Many universities have one in their facilities. Be on the lookout for SBA (Small Business Administration) in your area. These centers are very helpful in a small business retrospect. They not only help you gain connections to other entrepreneurs, but they also help you speak with investors. These types of centers will, all in all, answer many questions for a small business owner just starting out. They can help you figure out the funding situation from beginning to end, like which type of funding you are qualified for to which type of funding you will be choosing. No matter where you live, try and find a place where you can go and ask whatever questions you may have because chances are you may have some.
Think About Getting Funding
Again, receiving funding in a startup company may be a bit difficult. You most likely will not have the means of proof of capital. Though, if you do, this may be a good option for your business. If you can prove your gain of capital, you can possibly be qualified for traditional funding, which is given from a bank.
There are many different banks that offer funding options to entrepreneurs, almost all of them having different price ranges, regulations, and qualifications. This is not a decision to be taken lightly. Research different options that may be available to you. Think it over and choose the decision that makes most financial sense for you and your small business.
This is your career for potentially your whole life. You do not want to jump right into it. A smart decision may be to find a financial advisor and ask what your best bet may be. This will help you navigate your way through the finances of your business, and help you avoid big bumps in the road as you grow, and your business demands more.
If this is your dream, you do not want to mess it up, especially in the starting process. Seeking out a professional advisor whom you can get whatever answers you deem necessary from is a fantastic way to help your business succeed. From there, you should know which direction is best for you to go in.