Determine How Much Funding You Will Need
It costs money to start and run a business, and it can affect how you structure the entire business. Let us help!
- Self-Funding - Using your own financial resources to support your business
- Using your savings accounts
- Asking family and friends for capital
- With this route, you will retain complete control over the business.
- You also take on all the risk yourself. Be careful not to spend more than you can afford - check with your plan’s administrator and a personal financial adviser first.
- Crowdfunding - Raises funds for a business from a large number of people, called crowdfunders
- Not technically investors - don’t receive a share of ownership in the business/don’t expect a financial return on their money,
- Do expect to get a “gift” from your company as thanks for their contribution. (Product you plan to sell, meeting the business owner, or getting their name in the credits)
- A popular, low risk, option for people who want to produce creative works (like a documentary), or a physical product (like a high-tech cooler).
- Every crowdfunding platform is different - make sure to read the fine print and understand your full financial and legal obligations.
- Get Capital from Investors - Venture capital investments can be given by investors, usually in exchange for an ownership share and active role in the company.
- Focuses high-growth companies
- Invests capital in return for equity, rather than debt (it’s not a loan)
- Takes higher risks in exchange for potential higher returns
- Has a longer investment horizon than traditional financing
- Almost all venture capitalists most likely will want a seat on the board of directors - be prepared to give up some portion of both control and ownership of your company in exchange for funding.
- Apply for a Small Business Loan - Retain complete control of your business, but don’t have enough funds to start, consider a small business loan.
- Have a Business Plan
- Expense Sheet
- Financial Projections for 5 Years
- Once you have your materials ready, contact banks and credit unions to request a loan - compare offers to get the best possible terms for your loan.
- Apply for Grants
- There are grants available to help with small business startup costs. Contact us for more information!
You will most likely use a combination of any and all the above mentioned ways to help fund your business!