Jean publishes a blog called the Enterprise Corner. It features articles on entrepreneurship, local industry trends, manufacturing news and periodic ‘toolbox’ articles showcasing assistance, incentives and other resources for local businesses.
Finding capital to start a new business is difficult but with the right amount of homework, attitude and persistance entrepreneurs can often scratch up the funds to launch their business. We encourage entrepreneurs to learn more about bootstrap financing, also known as 'self-financing', which means starting a business with little or no outside capital.
Many folks say, "I don't need any money, or I'm going to get a grant to start up my business!". Contrary to what you read online, or hear on late-night TV, grants are virtually nonexistent and an extreme longshot for new companies. The average entrepreneur contributes at least 80% of his or her own money to start up their business. Other bootstrapping avenues are gifts or loans from friends and family members, credit cards or using personal savings.
In the past few years Crowdfunding has emerged as a form of financing. Be aware that this form of funding is very new and not a realistic option for many ventures. Also realize that a successful crowdfunding initiative takes a lot of time and accumen to pull off. This approach to funding a business is not for the faint at heart. This link will help uncover the details of Crowdfunding.
Bank loans are a possibility but you need to put equity or assets into your venture if you want a bank to seriously consider your loan request. You also need to do your homework. Banks typically want to see a business plan, personal financial statements and financial projections to complete a loan application. They will be looking for at least 2 years of business history, your personal records and significant personal or business collateral as well as a good credit record. It's a good idea to talk to your lender about the loan requirements in advance, rather than waiting until you've signed a lease or other binding agreements. More info on Start Up Funding
Many entrepreneurs who are encouraged by TV show Shark Tank have an interest in finding investors to get their business off the ground. What Shark Tank doesn't show is that each of those hopeful auditions start with a business plan and solid financials. Before you search out potential investors you will want to take your completed business plan and financial projections to a specialized business attorney/CPA to help you structure what you want to offer investors. Being cautious and knowing what your investor agreement means is vitally important to the future of your business. Lastly, as mentioned, there are specialized grants that are extremely limited and typically only available for specialized high tech, revolutionary products or items sold to the government. If you believe this fits your business or product contact us to discuss the grant application process.
A key part of raising capital is knowing how how much money you actually need to start your business. Prospective investors and banks want to know you have a handle on your business' finances. Most of these funders also want a clear sense of where you plan to get the money.
Of course, a lot of how much you will need depends on what type of business you will be starting, but it is important to have a good grasp of your business' start-up costs, financial projections and cash flow. If you haven't thought that out, here's a great online tool for estimating your start up costs; Startup Calculator.