Lack of Funds Destroying Your Entrepreneurial Dreams?
There is a very successful man that I know, and he has made his fortune in commercial real estate. One day we were talking about the real estate business he owns, and he shared with me the many “other” businesses that he had founded, that ultimately failed. As our discussion continued, he told me that the most difficult part of starting a new business, regardless of what it was, is getting the start up capital. Fortunately, for him, he was able to find a partner and together they were able to come up with enough money from friends and family to start their latest endeavor, which is a huge success.
You too might be at this point in your life. You know you have the skills and knowledge to be your own boss and change the world. There is only one thing that is stopping you…FUNDING!
Capital for starting your business can come in many forms, such as personal savings, credit cards, money from family or friends, crowdfunding (https://www.kickstarter.com/), loans from financial institutions (such as bank) or selling equity in your business to investment firms or angel investors (https://gust.com). The Small Business Administration can also be of assistance with securing a loan and providing information, https://www.sba.gov/funding-programs/loans.
If you are going outside of your personal sphere of influence to obtain funding, there are some items that are going to be required.
A loan proposal or a business plan are the key items that you need to have prepared. Your loan proposal or business plan needs to be realistic. Taking your time to create a detailed proposal or business plan, will serve you well. If written effectively, this document will assure the reader that you have the training and experience needed to run your business and most importantly, you will have sufficient cash flow to repay the loan or create a profit. Craft the document to the intended audience. Repayment is the main concern of the lender and you must show how this will be accomplished as well as a documented plan of what will be done if you are unable to repay the loan. Offering collateral will help mitigate the risk of the lender and could help you to secure the loan. If you are trying to secure funding from an investor, make sure your document highlights the social as well as financial benefits you are offering.
In addition, you should have available a recent credit report, your personal work history as well as several letters of recommendation.
Finally, if you are trying to secure a loan, a down payment will be required. Depending on the type of loan you are applying for, the amount could be anywhere from 5% – 50%.
Whether you want to start on your business plan, create a personal budget to save the capital yourself or need assistance with your company’s financials in order to expand, I would love to be a part of your team and help make your dreams come true.
Categories: General Business