How to Raise Money for Starting a Business

There is plenty of technique to raise money for your business, some more proven than others.

The assignment of raising money for a business is not as exhausting as most people seem to believe. This is mainly true when you have a plan that can make you and your supporter rich. In fact, there’s more money accessible for new business project than there are good business ideas.

Most important rule of the game to learn: Anytime you want to earn more money, your first step should be to put together an appropriate business plan. This business plan should comprise a resume of your background, training, your education, experience and any other personal aspect that could be counted as an asset to your potential success. It’s as well a good idea to list the several loans you’ve had in the past, what they were for, and your history of paying them off.

You all have to give an explanation in detail how the money you want is going to be used. If this money for an existing business, you’ll need a profit and loss record for leastwise the preceding 6 months, and a plan showing how this extra money will produce significant profits. If it’s a new business, you all have to show your proposed business plan, your marketing research and calculated costs, as well as be prepared for income figures, with a summary for every year, over at least a 3 year period.

It will be favorable to you to support your cost calculate roughly high and your earnings prediction on minimal returns. This will enable you to “ride thru” those extreme “ups and downs” inherent in any starting business. You must also explain what makes your business unique – how it is different from your competition, and the chance for expansion or secondary products.

This business strategy will have to state exactly what you are offering the investor in return for the make use of his money. He will want to know the percentage of interest you are ready to pay, and whether monthly, quarterly or on a yearly basis. Are you offering a particular percentage of the profits? A percentage of the business? A seat on your board of directors?

How to Raise Money for Starting a Business

How to Raise Money for Starting a Business

Investors make use of his money to make more money. He wants to make money as much as he can, anyhow of whether it is a short term or long term deal. In order to interest him, attract him, and persuade him to “put up” the money you need, you will not only have to offer him a chance for big profits, but you must to spell it out in detail, and further, back up your claims with evidence from your marketing research.

Enterprise investors are mostly quite familiar with “high risk” proposals, yet they all want to reduce that risk as much as possible. Hence, your business plan should comprise a listing of your business and private assets with documentation – ordinarily copies of your tax returns for the past 3 years or more. Your potential investor maybe don’t know anything about you or your business, but if he likes to know, he can pick up his phone and know every single thing there is to know in 24 hours. The point here’s, do not ever try to “con” a potential investor. Be truthful with him. Lay all the detail on the table for him. In many cases, if you have got a good idea and you have done your homework completely, an “interested investor” will understand your situation and offer more help than you dared to ask.

When you’ve your business plan ready, know how much money you want, precisely how it will be used, and how you plan to repay it, you are now prepared to start looking for investors.

As simple as it sounds, one of the easiest methods of raising money is by advertising in a tabloid, newspaper or a national publication featuring such ads. Your ads have to state the sum of money you want – always request for extra money than you need so you have room for negotiating. Your ad should as well state the type of business involved “to separate the curious from the truly interested”, and the sort of return you are promising on the investment.

Take a page from the party plan merchandisers. Make a party and invite your teammate over. Give an explanation of your business plan, how much you need, and the profit potentials. Give them all a copy of your business plan and ask that they promise a thousand dollars as a non-participating partner in your business. Check with the present tax regulations. You may be allowed up to 25 teammate, opening the door for everyone to meet a group of friends around himself with something to offer them in return for their assistance in provide capital for his business.

It’s always a good plan to have a good lawyer and an accountant to assist you make up your business plan. As you give an explanation of your plan to them, and ask for their recommendations, casually ask them if they would mind letting you know of, or drive your way any prospective investors they might happen to meet. Do the same with your bank manager. Give him a duplicate of your business plan and ask him if he would look it over and offer any advice for improving it, and, of course, let you know of any prospective investors. In one or other case, it’s always a good idea to let them know you’re willing to pay a “finder’s fee” if you can be directed to the right investor.

People in professional occupations such as doctors and dentists are known to have a propensity to join occupational investment groups. When you talk with your doctor or dentist, give him an explanation of your business plan. He may want to invest on his own or possibly set up an appointment for you to talk with the manager of his investment group. Either way, you win because when you are looking for money, it is essential that you get the word out to as many prospective investors as possible.

Don not disregards the possibilities of the Small Business Investment Companies in your region. Look them up in your phone book under “Investment Services.” This company exists for the single purposes of lending money to businesses which they feel have a good opportunity of making money. In many cases, they trade their help for a small interest in your company.

Numerous states have Business Development Commissions whose purpose is to help in the establishment and growth of new businesses. Not only do they offer good taxes and business expertise, most also offer money or space to help a new business get started. Your Chamber of Commerce is the place to check for more information on this idea.

Industrial banks are normally much more cooperative to making business loans than regular banks, so make sure to check out these institutions in your area. Insurance companies are primary sources of long term business capital, however each company differ its policies regarding the type of business it will consider. Check your local agent for the address and name of the person to contact. It is also quite totally to get the directors of another firm to invest in your business. Look for a company that can benefit from your service or product. In addition, be sure to check at your public library for available institutions grants. These can be the last answer to all your money needs if your business is perceived to be related to the purpose and activities of the foundation.

In the end, there is the Money Broker or Finder. These are the people who take your business strategy and circulate it with various well known lenders or investors. They always require an up-front or periodic payment, and there is no way they can guaranty to get you the loan or the money you want. There are plenty of very good money brokers; also there are some that are not so good. They’ll take a percentage of the gross amount that is eventually procured for your needs. The most important thing is to check them out fully; find out about the successful loans or investment plans they have arranged, and what kind of investor contacts they have – all of this earlier than you put up any front money or pay any retainer fees.

There are several methods to raise money – from staging garage sales to selling stocks. Do not make the mistake of thinking that the no more than spot you can find the money you want is through the finance company or bank. Start thinking regarding the idea of inviting investors to share in your business as silent partners. Think about the idea to get financing for a prime business by set out financing for another business that will assist the start-up, establishment and development of the primary business. Think about the feasibility of merging with a company that is already organized, and with facilities that are suited or related to your needs. Give some thought to the feasibility of getting the people provide your production equipment to co-sign the loan you need for start-up capital.

Don’t forget, there are thousands upon thousands of method to get business start-up capital. This is truly the age of innovative financing. Ignore the rumor you hear of “tight money,” and start making phone calls, talking to people, and making appointments to talk about your plans with the people who have money to invest. There is more money now than there is ever been for new business investment. The difficult situation is that most beginning “business builders” do not know what to believe or which way to turn for help. They gravitate to believe the rumor of “tight money,” also they set aside their plans for a business of their own to a time when start-up money might be easier to find.

Well, now is the right time to make your move and act. The person with a truly viable business strategy and determination to be successful will make use of every possible idea that can be imagined. And the ideas I have suggested here should serve as just a few of the limitless sources of financial help available and waiting for you!

Article publié pour la première fois le 25/09/2015

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