Once your business plan has been thoroughly developed, it’s time to benchmark your business idea with potential lenders and investors. Many business owners begin their search for financing with banks, investors, and venture capitalists, while most use the immediate benefit of family and friends. No matter how entrepreneurs intend to finance their ventures, the hard part of starting a business begins once the business plan is complete. Make no mistake about it, securing funding sources for start-ups is not an easy task. However, with hard work and diligence it can be achieved. Although we are hampered by times of economic downturn, now is the perfect time to begin the journey to business ownership. There are current signs of recovery for small business financing, and while they are few, they are evidence that the best is yet to come. Presenting your business plan to potential lenders and investors now allows entrepreneurs to build the relationships that can lead to future successful financial endeavors. Also, if the owners can secure some financing in times of economic despair, it serves as a testimonial to businesses and banks that their business idea is likely to turn a profit.
Involving family and friends to become part of the business ownership journey often serves as the best avenue for entrepreneurs to raise capital. It just makes sense that those who love and care about you would be interested in participating in your quest for success. Getting all of your start-up capital through family and friends is unlikely for most, but the opportunity to get funds for equipment, down payments, consultations, legal fees, etc. it’s vast When starting a business, every dollar counts and the funds accumulated prove beneficial to the overall success of the business. To many, the chance of getting financial help from loved ones seems dwarf in times of financial struggle for everyone, but in all business endeavours, you never meet a counterpart willing to partner with you until you ask. Remember, in business matters, family and friends are the only people who have a legitimate concern for your success and not your own.
If family and friends don’t turn out to be the only source of funding needed, that’s when investors and lenders are warranted. There are mainly four types of funding sources that new business owners should apply for help. Unless the funds sought are minimal, banks should not be your first source of funding. Instead, many successful small business owners have acquired seed funding through private investment firms called “angel investors,” which are beneficial in facilitating meetings between potential entrepreneurs and investors. Other resources to consider when looking for business loans rather than investors are small business investment companies and the US Business Administration. The SBA will help current business owners find investment companies that provide loans specifically for starting small businesses. However, these organizations enact rigorous qualification processes and financing through them is difficult for new companies. This makes private investors, along with family and friends, the ideal solution for starting up new businesses.
Don’t be discouraged by the struggle to finance your start-up or existing business. This fight will be the first of many on your journey as a business owner. Although it will be difficult, financing your business is by far the most advantageous victory you will ever experience in your role as an owner. Embrace each individual endeavor you will face on your path to success, as they will all give you the character necessary to lead your business to profitable results. Consider your search for financing the most valuable challenge you must conquer as the leader of your company. But what is most important, see it as the most rewarding.
AL Demings
Accept the challenges so you can feel the exhilaration of victory ~George S. Patton~
