Wouldn’t everyone love having a T-Rex-size nest-egg under their mattress when starting a new business? A few million, a few hundred thousand, heck, even a few thousand would make a world of difference.
In today’s economy, you’ll be hard-pressed to live your dreams without any sort of tribulations, however minor or severe they may be. Potential business owners, you’re definitely not alone in the dark here; there are a few ways you can get funding for your business. All you have to do is be prepared.
Why do you need a lot of startup capital? Well, you’re going to need marketing, inventory, facilities, expenses, and money set aside for an infinite list of variables. Cash flow is very important. This isn’t to say you can’t start small or even with no budget, but for the sake of this blog we’ll talk about those ideas which do require startup funding.
It’s not like you want to run out and put an entire business on your Visa card. Sure, you’d be a business owner – a broke and indebted business owner. What you need is a serious plan of attack in order to borrow the money to start up your dream venture.
Look, nobody’s going to help you unless you can help yourself. It’s absolutely vital that you have a thorough business plan laid out, illustrating the finer points of your business, from concept to conclusion, entailing what you expect to spend and what you expect to make in return. If you don’t take yourself seriously, nobody else is going to either. You have to prove this concept. And since you believe in your business, this hill is far from insurmountable.
There are two main types of business financing out there for you, debt financing and equity financing. With debt financing, you simply borrow the money and agree to pay it back at regular intervals and a set interest rate. However, you’ll owe this money in return, whether your business thrives or flounders.
This is risky, but with the aforementioned proper business plan, a lot of lenders are willing to take the chance on you. With equity financing, you’re selling partial ownership of your business in exchange for the startup funds. If the business fails, the investors assume the risk. But if your startup business succeeds, they’ll be the ones making the lion’s share of the profit.
Don’t think that the above methods are your only options for startup capital. You can also try out friends and family. You would be pleasantly surprised how willing that distant cousin or estranged friend is to partner up after they see an amazing business plan.
Most likely, they’re also entrepreneurs at heart, and if you show them something that appears to be ironclad, you could have the capital you need. Private lending is also a way to go if the bank says no. Basically, they’re the same as banks in terms of lending; they’re just more of the “special interest” variety.
Leasing is also a great way to go for expensive items, like huge equipment such as vehicles and machines. And although credit cards are a no-no when it comes to funding your entire business, it’s still okay, and probably even in your best interest, to grab some items, such as repairs and small remodels, with your credit card.