There are many sources to consider when looking for financing: private capital, bank loans, government programs or your own assets. It's likely that the ultimate solution will involve some combination of these and others.
Preparation is vital. You'll need a sound business plan and a strong presentation to sell it to others. Here are three steps to financing your startup:
The best contacts and resources to help you get it done
Put together a plan
Have a clear, workable business plan in place before you seek funding. Banks, angel investors and even Uncle Joe will want to know you can handle their investment wisely.
I recommend: Access free business plan templates at
SCORE. Take a free online workshop on analyzing your financial ratios from
Regions. Fill out an online questionnaire at
Business Finance to get a list of possible funding sources.
Finance yourself
By keeping your budget lean, you effectively decrease the amount you need to finance. Leverage assets you have access to.
I recommend: Trim any costs that aren't essential to your success using these guidelines from
More Business. Consider some of the self-financing options at
StartupNation.
Get Uncle Sam's help
There is government funding available, although it may take some digging to find the right program and get paperwork in order.
I recommend: Review the top Small Business Administration
funding programs. Download an
application for an SBA loan. Use this
checklist to make sure you have all the documents for an SBA application.
Small business investment companies
Are you willing to give away a piece of the pie for some investment from the outside? While angel investors help with the early stages of startups and bring advice and credibility to a project, venture capitalists will expect you to have a start already, with a working product.
I recommend: Download a list of SBA-certified small business
investment companies, organized by state. Browse
Inc.'s directory of angel networks and in-depth profiles of
angel investors. Register your business plan and find venture capitalists and angel investors at
Funding Universe. Search for venture capitalists at
Go Big Network.
Do the math
Before you sign on the dotted line, calculate as many costs as possible, and compare them to your projected revenues.
I recommend: Use this free online calculator from
Business Know-How to figure your initial startup costs. Check out a free demo of
Return on Investment Solver software.
Test your financing IQ with a quiz at SBA.
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