Conventional wisdom is that you should have up to 12 months of living expenses put away before you start your own business, although the figure depends on a few factors.More >>
You know the cliche: It takes money to make money. It may be just a rationalization when hopefully uttered in a casino, but in your small business, it's a truism. Even if your business plan calls for instant profitability, almost all businesses need initial funding to get up and running.
Hunting for funding can lead you in many different directions.
A starting point is to determine how much money you require to run your business until it can become self-sustaining. (This is often more money than entrepreneurs think!) The next step is to make a list of potential sources. Relatives and friends can be a good choice, provided you've carefully considered the potential complications of mixing family with business.
For most, a better source of funding is in the commercial realm: banks, small business co-ops in your community, and private venture capital firms. Also, some credit card companies offer financing options for small businesses. Remember, getting funded is not the same thing as getting a loan. In exchange for funding, you will need to turn over equity in your company – meaning, your investors become, in effect, partners in your enterprise.
During the 1990s, entrepreneurs began to use the phrase "smart money," which means funding that includes expertise. Getting smart money calls for investors with experience in your services, or knowledge about parts of running your business that you lack. By getting both -- money and expertise -- your business is off to a great start. And you can take that to the casinos.
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