Fund a Small Business Startup

BYTRADEBYTRADE Posts: 63subscriber Bronze Level Member
edited December 2011 in Startup Funding
1


Determine how much capital you need to start your small business. Make a list and estimate how much each item you will need costs. Knowing approximately how much capital you need will make it much easier for you to fund your small business startup.



2


Prepare a business plan. Your business plan is going to be essential if you apply for a business loan or seek investors. A business plan outlines your goals for your business and details how you're going to reach those goals. Potential lenders and investors are going to want to review your business plan before deciding whether or not to work with you.



3


Decide whether you can contribute to the start-up funds. Many small business owners fund their startups by using their credit cards or dipping into their savings. If you opt for either of those, make sure you still have enough money you can use in case of a personal emergency.



4


Approach family and friends. Family and friends can be a good source of capital when trying to fund a small business startup, but be cautious when asking a loved one for money. It's best to have a written agreement as to the terms of the loan, including the amount of the loan and the repayment schedule. You must also consider whether or not you want a loved one to have say in how you run your business. If you do not want that input, make sure the agreement clearly states that you are accepting a loan and the loaner has, in no way, a role in your business.



5


Consider approaching investors. Investors can be an effective resource for funding a small business's startup, if you're willing to give up some of the control of your business. To find potential investors, talk to family, friends and co-workers, who may know someone who is looking for investing opportunities.



6


Apply for a Small Business Administration (SBA) loan. The SBA is an extremely valuable resource for small business owners. In addition to providing small business owners with counsel, the SBA offers loans for which you can apply. If you are approved for a SBA loan, you will receive the actual funds from a bank rather than the SBA itself. The SBA only guarantees the loans.



7


Find cost-saving solutions. An effective means of ensuring you have enough funds to get your small business off of the ground is to find ways to cut costs during your start-up period. For example, if you need office furniture, buy used instead of expensive new furniture.



8


If you have trouble securing start-up funds, seriously contemplate keeping your day job until your business is making enough money to support you. If you do give up your day job, be sure to have enough money saved to cover six months of expenses in case your business doesn't take off as quickly as you anticipate.




Comments

Sign In or Register to comment.