Finding business start up funding can be one of the biggest challenges for a would-be entrepreneur. While launching a new business venture calls for a great deal of research, skill, and preparation, many people have a difficult time coming up with the financial resources to get their new business off the ground. As a first step, you should list the various potential sources of funding available to you and determine which approach will be best, given your own unique needs and time frames.
How Much Does it Cost to Start a New Business?
The answer to this question depends largely on the type of business you are looking to start and the choices you make along the way. Some of the most critical pieces to answering this question include:
- Do you have to invest in capital equipment?
- Will you be renting or leasing a location for the business and, if so, will that space require any renovations?
- Will you need to hire and pay employees?
- Will you need to purchase and maintain inventory?
Fortunately, many businesses (e.g. those that are Internet-based) can be started with minimal budget and run from home with no employees, inventory or any equipment other than a computer.
Sources for Business Start Up Funding
That said, the business you're thinking about might require an up-front investment. If that is the case, here are just a few sources you might consider:
Your savings or investments- For starters, you might look to your savings account or liquidate some of your investments.
Borrow from friends or relatives- While this is an avenue many new entrepreneurs take, it should be approached with caution as it can lead to discomfort and hard feelings.
Credit cards- This is another method that should be undertaken very cautiously and only if you believe you can pay off the balance very quickly as credit card debt typically carries a very high rate of interest.
Loan from the bank- A bank loan is often difficult for a new business to acquire. To be successful, you will probably need to show a professional and well-developed business plan along with a plan for repaying the loan.
Before choosing any of the above methods you should be sure to have developed a business plan that you believe in and, to the best of your ability, a projected time frame for recapturing any money you may have borrowed to get your business started.
Steve and his company build database software for business and personal use, including business database software products. |
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