Finding funding for a small business start-up involves more than just getting your hands on needed capitol. It is about locating the capitol from the right places, that won’t be a detriment to your future business creation. In other words, you don’t want to go too far in debt or alienate the wrong people, When my fiance and I started our small property business three years ago, we considered multiple funding sources and took advantage of the best ones for our situation.
Start with a solid business plan and cut costs from there. One of the downfalls of many new small business owners is borrowing more money than they can realistically pay back in a short amount of time. Look closely at your business plan and take out any expenditures that are not directly related to getting your business operational. The less your business will cost to open, the easier it will be to find funding.
When we bought our first rental property, I wanted to add nice finishes. Talking with my fiance and other property managers, I soon discovered this was money thrown away. I would never get a return on my investment. The nature of our business did not absolutely require offices outside the home, another savings. I also discovered lenders were more likely to want to do business with us, knowing that we were tightly focused on turning a profit.
The Small Business Administration (SBA) has resources you can use to figure start-up costs, figure possible profit margins and even locate money to start a business.
Partially fund your business with your own money. One of the first places you can look for money to fund a small business is your own finances. Look at your savings and home equity. Will you be able to pull enough capitol from those to get your start-up going, without jeopardizing your future security? For businesses with low start-up costs (typically not a brick and mortar business), tax returns may provide the added dollars needed.
We had enough money in savings to buy our first piece of property, but not enough to renovate it to be livable. So we had to look at alternate sources to fund the rest of our business venture.
Honestly evaluate before asking friends and family to fund your small business.
Small Business, start-up, business creation, funding a small business, fund raising, Capital