Can you start a business with little or no money? According to these successful entrepreneurs, you can.
Starting a business is tough and, for many entrepreneurs, one of the most daunting challenges is raising start-up capital. Gone are the days of pitching investors with hot new technology ideas. Today, entrepreneurs are much more likely to dive into their own pockets and hunker down for a battle to start up and stay alive. But if you don't have the cash in your wallet, what do you do? Luckily, there are still options for funding new companies, but finding and securing the cash will take careful research, good negotiating skills, and, above all, an unflagging commitment to launching your new business.
Start your capital search with a good business plan that shows investors and lenders your company's potential. Follow that up with a thorough knowledge of the resources available and a determination to make your business a reality, and you should be on your way to uncovering a source that fits your new business's cash needs.
Starting businesses with little or close to no money at all seems to be the norm for many recent Inc. 500 companies.
Tapping personal ties to raise cash for a company that's either too new or too small to get financing elsewhere is an age-old formula that still makes sense. But here's one risk too big to ignore in today's highly competitive capital marketplace: if you don't follow professional standards in structuring and documenting "F&F" loans or equity arrangements, your sloppiness will likely come back to haunt you.
That's because if and when your company grows to the point at which it can credibly approach banks or professional investors for funds, their lawyers will examine your corporate capitalization structure with a fine-tooth comb.
(Excerpted from "20 Tips for Finding Money Now," Inc. magazine, March 1999)
Bank financing isn't impossible. Use this advice to increase your chances of securing a bank loan.
Some entrepreneurs say government programs are easy to secure financing from; others say steer clear of them. Regardless of the opinions, if you're serious about your capital search, you shouldn't overlook government programs and the U.S. Small Business Administration (SBA).
Angel investors will not only share their money; they're also great sources of knowledge for fledgling businesses
Banks and investors aren't the only ways to fund a business. Check out these unconventional resources that some business owners have used.
Plastic can jump-start any business, but use it wisely.