As we approach the end of the year people start thinking about their future and what is next in their life. Some people might decide to exercise more, travel to a new place, etc. Your New Year’s resolution is to take your creative idea and turn it into a business. Just like millions of business owners before you, this will be an exciting time with obstacles that must be surpassed for you to succeed. One obstacle you must overcome is how are you going to fund your business? As a sole proprietor, you may find that acquiring this necessary business funding may be nearly impossible.
The good news is the economy is showing sign of renewal; but, the market of small companies relies so heavily on business funding that it is recovering at a much slower pace. If you want to receive business funding for your start-up you must raise the level of your game to show investors that you are serious and mean business.
The first element that is necessary for obtaining the financing you need is a strong business plan. A strong business plan will show investors two key things; first that there are a market and a demand for your product or service and business projections based on actual numbers backed by trustworthy sources. An advantage to you for doing this research is it will provide a great opportunity to find out whether this idea is worth your time and how susceptible it is to failure.
Unfortunately, even with a strong business plan, 90% of all businesses will fail within the first five years and financing companies are very aware of this fact. Therefore, besides a business plan financing companies must see what personal financing you are bringing to the table. If you expect a company to invest 100% of the money without you financing anything you are in for quite a surprise. Just think if you were asked to fund someone’s project and were asked to take all the risk without them taking any. You would not invest in them, why would you expect someone else to do the same?
Looking for business funding can be hard until you know where to look. You can try to approach the local bank, but cash loans with sure approval have become more difficult to obtain due to the economy and unless you have a stellar idea and have years of experience in that field the bank will not grant the loan.
Where to look then? My suggestion is to find a consultant that understands the ins and outs of business funding and whether your idea has the potential to be funded or needs to be reworked. When choosing a consultant; look for someone with experience with a wide array of funding options such as; business loans, capital venture, grants, corporate credit, etc. Lastly, make sure the business funding consultant has your business needs at the top of their priority list as finding the right business funding can make or break a company in the long run.