Starting a Business: The Business Plan (Pt.4)

Now we're on to the next part of the financing aspect. Where to get the capital to fund your business in the start-up. There's several sources of capital that an entrepreneur has.

These include:

1. Personal Savings
2. Relatives
3. Former Employees
4. Banks
5. Finance Companies
6. Venture Capitalists
7. Government Agencies

As you can see, there are quite a few sources you can go after. Above 85% of people who start up businesses received their beginning money to start from their family and friends.
Another way you could receive some capital is by venture capitalists. These are people that will invest money to help start up a business for part ownership. Some can even ask for a big chunk of your profits, so be careful to evaluate the situation fully.
One government agency that helps small businesses start up is the Small Business Administration (SBA). These are small loans that the government give out to help new businesses. Of course you can always get loans from the banks as well.

But better yet! Have you ever thought about trying to get some start-up money from one of your suppliers? It could be in their best interest as well to help you start-up and pay back.


Loans = Money Borrowed + Interest
So you end up spending more than you actually borrowed.
Taking risks to try to become successful.
That's what being an entrepreneur is all about.

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Admin said...

Take care to not use your multiple credit cards. This till trap you with huge debt and that an enterprenure cannot afford.

Nice post. Sherin

Jesse said...

That is very true. When I state "get a loan from a bank" this does not mean use credit cards to suffice. Bad idea for a beginning business person to use credit cards for capital. You get charged ridiculous amounts with the interest.

Thanks for the good content post. appreciate it.

Bullgrit said...

Which is the best source to start with, if all 7 in the above list are available?

Sky Xavier said...

what i suggest... never use credit card, use the money which you have only... so that you will be safe and later on you will sure be happy with your decision of not using credit card

Jesse said...

To Bullgrit's comment:
It really depends where you're at when you're ready to begin a business. If you have sufficient personal savings or have family members that can help you out, by far, that's the best way to go. But a lot of people don't have those options. The way our economy is right now it's very hard to get loans from anywhere, let alone banks, without having close to perfect credit.

If the family and personal savings does not apply to you right now, I would advise seeking out some government agencies that lend loans out to help businesses start. That'd probably be the best bet for right now with the way the economy is. But keep in mind, it really depends on what you have to offer to begin with.

Hope that helps a little.

believer1984 said...

This is pretty good.

Thanks for sharing.


El Cartel said...

It's scary the # of people who go into business not knowing how.

JB said...

It really is... but the one thing I can tell people is that if you have the drive to do it, you can do just about anything.. Even in some of the more rougher times.

People that are driven are the people who become successful. As long as the individual is driven in the right state of mind. Keeping legality and ethics along with them.

Darmawan said...

I like ur statement 'if you have the drive to do it, you can do just about anything'
Next time I'll remember this to motivate myself before facing something big

Mr. Wilson said...

even how good your plan is or how prepared you are or how motivated you are, when the economy is facing a crisis you can really not stop problems to come to your business..

Eakarit said...
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