Once your business plan has been thoroughly developed, it’s time to compare your business idea with potential lenders and investors. Many business owners begin their search for financing with banks, investors, and venture capitalists, while most use the immediate benefit of family and friends. No matter how entrepreneurs intend to finance their businesses, the hard part of starting a business begins once the business plan is complete. Make no mistake about it, securing funding sources for business start-ups is not an easy task. However, with hard work and diligence it can be achieved. Although we are hampered by times of economic downturn, now is the perfect time to begin the journey to business ownership. There are current signs of recovery for small business financing, and while few, they are evidence that the best is yet to come. Presenting your business plan to potential lenders and investors now allows entrepreneurs to build the relationships that can lead to successful future financial endeavors. Also, if owners are able to secure some financing in times of economic desperation, it serves as testimony to businesses and banks that their business idea is likely to turn a profit.

Involving family and friends to become part of the journey to business ownership typically serves as the best avenue for entrepreneurs to raise capital. It just makes sense that those who love and care about you would be interested in participating in your quest for success. Getting all of your startup capital through family and friends is unlikely for most, but the opportunity to get funding for equipment, down payments, consultations, legal fees, etc. It’s Vast When starting a business, every dollar counts and the funds accumulated are beneficial to the overall success of the business. To many, the prospect of getting financial help from loved ones seems insignificant in times of financial struggle for all, but in all business endeavors, you never meet a counterpart willing to partner with you until you ask. Remember, in business matters, family and friends are the only people who have a legitimate concern for your success and not their own.

If family and friends do not turn out to be the only source of finance needed, then investors and lenders are warranted. There are mainly four types of financing sources that new business owners must apply for help. Unless the funds sought are minimal, banks should not be your first source of financing. Instead, many successful small business owners have acquired seed funding through private investment firms called “angel investors,” which are beneficial in facilitating meetings between entrepreneurs and potential investors. Other resources to consider when looking for business loans instead of investors are small business investment companies and the US Business Administration. The SBA will help current business owners find investment companies that specifically provide loans. for small business start-ups. However, these organizations enact rigorous qualification processes and financing through them is difficult for new businesses. This makes private investors, along with family and friends, the ideal solution for new business start-ups.

Don’t be discouraged by the struggle to finance your start-up or existing business. This fight will be the first of many in your journey as a business owner. Although it will be difficult, financing your business is by far the most advantageous victory you will ever experience in your role as an owner. Embrace each individual endeavor you will face on your path to success, as they will all give you the character you need to lead your company to profitable results. Consider your search for financing as the most valuable challenge that you must conquer as the leader of your company. But more importantly, look at it as the most rewarding.

A. L. Demings

Accept the challenges so you can feel the exhilaration of victory ~George S. Patton~