Finding startup money for a new small business: Part 4
Many people dream of starting a small business. Few people actually do it. The largest obstacle for many is raising enough money to get off the ground. But somebody out there is making it happen; new businesses are popping up every day.
In the last section we looked at how family and friends, banks and other commercial lenders can help finance a small business. Here is a look at a few more common sources of startup money. Hopefully these ideas can help you get the ball rolling in starting your own small business:
Leasing does not put startup cash into your hands, but it can help you save some of the startup cash so you can spend it on other things. Whether your company needs vehicles, computers, or lawnmowers, leasing is usually available. You can lease heavy equipment for a much lesser price than buying it. In the long run you may spend more on a lease, but by the time the lease expires your business may be at the point where you have the money to buy. It offers other advantages also such as allowing you to keep up with constantly changing technology and maintenance may be included in the lease agreement. If large equipment is part of your business, you should look into leasing.
Many small businesses have loyal and devoted followers. Imagine regular purveyors of a coffee shop, an organic food supermarket or an independent yoga studio. Devoted supporters of a business may be willing to lend money because they believe in and value the business. They won’t be in it for the profit. It is worth it to ask, just be sure to get the agreements in writing. The last thing you want to do is damage a relationship with a devoted customer.
Venture capitalists are investors willing to look outside the box and invest in extraordinary businesses with the hopes of getting a huge return on their investment. They may be tough to persuade, but if you can get hooked up with a few you will have the opportunity to give a short presentation and convince them that your business is the next big thing. Check local venture capital clubs, the local chamber of commerce or a venture capital course at a nearby college.
The most difficult part of starting a small business can be finding the money to get off the ground. There are countless sources of startup money, but three of the most common sources are leasing, devoted supporters and venture capitalists. Thousands of entrepreneurs have started with a nice mix of the above three sources of income. Good luck and happy hunting in raising money for your small business.
Finding start-up money for a new small business: Part 1
Finding start-up money for a new small business: Part 2
Finding start-up money for a new small business: Part 3
 Fred S. Steingold, Legal Guide for Starting and Running a Small Business 153-159 (Betsy Simmons ed., Nolo 10th ed. 2008).