You have a great idea for a business but don’t have enough cash to get it off the ground? Funding is often the main component that keeps an entrepreneur from his or her dream. Have you been searching for government grants in the hopes of finding free money for your start up? Are you looking for investors and angels? Are you discovering there are no Venture Capitalists handing out start up funds?
The reality is that when it comes to funding your own small business, you need to be able to provide at least some of the financing yourself. Even if you qualify for an SBA (Small Business Administration) backed loan, you must still pitch in a good percentage yourself (20% – 30%).
And when it comes to grants, there really are no grants available for small start-ups. Sure, there are some here and there for $500 - $1000 for niche groups. But even a small business will have start up expenses upwards of $10,000. And Venture Capitalists are looking for multimillion dollar deals that will net them millions in return. They have no interest in helping the little guy with his little business.
So, where do you find funding?
Before I answer that all important question let me ask you…Do you have a detailed business plan with exact dollar requirements spelled out (or very close educated assumptions)? That is your first order of business. Once you have a very good idea of your needs you will have a better idea of where to look for funding.
Most people don’t even know how to begin to figure their start up costs. Here is a list of typical start up expenses:
ท security deposit
ท rent
ท utilities
ท signage
ท advertising
ท permits
ท legal fees
ท accounting fees
ท insurance
ท payroll
ท inventory
ท supplies
ท bank fees
ท loan payments
ท equipment
ท pos system
ท racking
ท counters
ท credit merchant acct
ท office furniture
ท office machines
ท taxes, taxes and more taxes
Of course your own particular expenses will vary according to your business, but this list should give you a good starting point. Once you have a better idea of your initial start up costs you will be in a position to know if you need to look for loans.
Additionally, with your business plan in hand, you will be in a much better position to approach lenders. Whether these lenders are in the form of friends or family or bank loan officers, they will want to see your vision on paper. They will want to know exactly what you are attempting to accomplish. They will want to know if your idea is viable and worth taking a risk on. And they will want to know if you have contributed anything of your own. Are you yourself willing to take a risk on your idea? Have you accumulated some savings? Have you sold off any assets? Have you considered a home equity loan? Are you willing to continue working a regular job while getting your business off the ground? Continuing to work will at least provide you with enough to take care of your personal expenses while your business is just getting started.
After you have exhausted these options, there are still other little known organizations and groups that can help you with additional capital. You will find much more detailed information at the site listed below. Understand, that while finding the funds for your small business start up can take time and effort it can be done. It is done all the time. You can do it too.
Start with the business plan and be that much closer to your dream.
Sylvia Talo has authored the step-by-step manual, "You Can Write Your Own Successful Business Plan", now featured in the One Stop Business Start Up Kit. Visit her web site http://smallbusinessstartup.biz/ a One Stop Site to help you start your own small business.
[tags]small business start up, small business financing, business start up, business startup, funding,[/tags]
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