Starting a business is a tough thing to do. There are so many things that you have
to do, you have to build a client base, hire employees and find office space. There
are plenty of challenges, but the one that many
entrepreneurs find most daunting
is
raising Startup Capital.
You already have your business idea ready, your business plan is in tow, your ducks
in a row; you’re ready to start up your business and get it off the ground but you
face one major potentially fatal problem: you need
Startup Capital. Unless you were
born into wealth and have it at your disposal, you’ll have to do like most other
small businesses and borrow your Startup Capital from someone.
It’s important that you start the search for Startup Capital with a good business
plan that shows investors and lenders your company’s potential. Follow your business
plan with a thorough knowledge of the resources available and a determination to
make your business a reality, and you should be on your way to uncovering a source
that fits your new business’s cash needs.
You should know that many financial institutions provide some type of small business
loan program just for those like you who need Startup Capital to get their business
off the ground. However in order for you to get your Startup Capital from a bank
and fund your business you’ll need a pretty solid business plan. You’ll need to
earn your Startup Capital from the bank by proving that your business will generate
enough cash to make the loan payments. Each and every bank will have its own requirements
that will differ from other banks, but if you will be able to articulate how exactly
your business will succeed, and if you have decent credit, and maybe a co-signer
as well, you may be able to get your Startup Capital through a small business bank
loan.
When you’re looking for Startup Capital, you should look at what the SBA or Small
Business Administration has to offer. The Small Business Administration is a great
resource that will provide you with information on requirements, on credit factors,
on how to apply for loans and many other important things you’ll need knowing. Giving
them a look-see would be a great starting point before attempting to apply at a
bank; the better prepared you’ll be the easier it will be when you’ll begin the
application process.
Now let’s not forget that a lot of small businesses get their Startup Capital from
family and friends. Your family and friends usually want you to succeed and will
believe in your business. However if they are indeed providing you with your Startup
Capital then it would be wise to treat these relationships as real business relationships
and plan how and when you’ll repay their loans, the exact time frame and at what
interest rate.
You could also get your Startup Capital form private angel investors and venture
capital firms. These two work generally in the same way they will invest in the
equity of your business and expect a return in the form of an acquisition, IPO or
stock buy-back in the future.
The key to any of the above mentioned methods of getting Startup Capital is to have
a well written business plan. Having a good business plan will show your would-be
investors that you are serious about your business and that you can demonstrate
the way you plan on making it successful.