Having enough money to maintain and grow your business is crucial in every way. The process to raise the capital begins when you are able to answer these two questions:
1. How much capital do I need?
Be realistic about your needs. Figure out what you need to start and operate your business for at least six months. Then assume that it will take twice as long and twice as much as the money you figured you will need to start. There are two types of costs you must consider – The first initial costs (licenses and registrations) and the continuing costs (profits and promotions).
2. Where do I get a capital?
There are many resources that are now available to business owners – workshops, groups, social networks and business programs. Traditionally lending is the most popular route, but be careful. Getting in debt especially in a new business is very risky. Here are some resources you can explore before applying for a loan.
Check out these options:
- Financing yourself or save your own money and invest it in your company.
- Financing with relatives or friends. They already trust you, but remember your relationship with them is more important than money.
- Crowdfunding or use the Internet to support your dream. Millions of dollars are donated to help support daily dreams of many people. Explore Indiegogo.com, kickstarter.com and crowdfunder.com and there are many more!
- Investment Groups. There are professional investors who sign up on websites to find projects that interest them like Angel.co.
- Competitions for employer or incubators
- Many local organizations that support business owners have contests for capital money AWEE, Local first, ASU, Seedspot in Phoenix.
- Grants or Governments also give money to specific projects. Check azcommerce.com, grants.gov, chambers of commerce and other scholarships are available.
- Traditional loans or you can talk with your banker. They can help you find the best loan (SBA or commercial) or assist you in starting your credit.
Good luck and keep up with your dreams!