Once the decision has been made to become a business owner, the next step is to decide where the necessary capital to launch the business will come from. One of the most difficult tasks a prospective entrepreneur has is raising the capital needed for their new business venture. Make sure to research whatever options and opportunities may be available. There are plenty of ways to raise funds for women-owned businesses.
Community Bank loans offer small business owners opportunities to build a relationship in their community. These smaller banks may not offer the same products or services as the larger banks but they are usually open to new business ventures in their community. Research the banks in your area or go to the Independent Bankers Association of America which provides a list of over 5,000 community banks.
Credit cards are the very foundation of small businesses. If bank loans are not an option, check with credit card companies for unsecured credit-line alternatives. VISA and American Express both offer competitive credit-line alternatives.
Reaching out to family and friends is an easy way to raise capital quickly too, especially if the new business venture is too small or too novel to secure bank financing. Although immediate bank funding can be accomplished, the amount awarded is often insufficient to cover all start-up costs. Be sure to consider the problems that can occur between all of the parties.
Grants are a common way for entrepreneurs to obtain financing too. Make sure to have a clear idea about how such funds will be used. In other words, a business plan is imperative! Talking to someone with experience in grant writing is a quick way to get up to speed on how to apply.
Business Investors are an option if the entrepreneur is willing to give up a percentage of the business and possibly some control. Test the waters of how some top investors look at new business opportunities by watching the television show “Shark Tank.”
Strategic partnerships should be considered if the entrepreneur has little or no experience in running a business or raising capital. Seek similar businesses in your area and approach them with a plan for partnering with them. It is important in this scenario to have a detailed plan in place of what you want to do and even more importantly what you have to offer the new company. Some business owners are looking for successors and having a partner come in on the ground level, learn the business, and then take the company over can be an attractive option.
Finally, check with the Small Business Administration in your state. The SBA offers many resources and much important business information on the subject of starting a business. Over the long haul, the SBA can become a valuable resource.
In conclusion, if the passion for starting the new venture matches the entrepreneur’s business acumen, then securing funds should not be a problem. Personal credit history is extremely important for a start-up of course, since that is all the creditors will have in order to properly evaluate the risk of lending funds. Do research on what options are available, then decide which option makes the most sense. Although a business plan is not always necessary, most lenders will want to see how the funds will be used, so consider doing at least a preliminary one.