Harris KhanIf the idea of starting and running your own business is enticing, you aren’t alone. It’s is a common goal, but one that many people have trouble achieving. One of the most challenging steps in launching your own company is finding the funding. If you have an idea and are ready to launch, but are tripped up by the financial aspects, there are a few things you can do to move closer to your goal.
Get Your Personal Finances in Order
There are two reasons why you should have your finances in top shape before starting a business. With your finances in order, you are in a better position to qualify for a loan, which can provide the funding you need to get off the ground. Having your finances in order also allows you to bootstrap your company. This is the term used for using your capital to fund your company. The idea of bootstrapping can be scary, but if you are confident in your idea and have done your research, it can be a viable option.
Having your finances in order ensures that you aren’t trying to balance an unreasonable debt load while building your company. Consider using a guide to learn how refinancing your private or federal student loans with a private lender will allow you to free up extra funds to redirect toward your business. In addition to providing working capital, doing so lowers your monthly expenses, meaning you won’t need as much income to make ends meet.
Approach Family and Friends
Asking others for financial help can be awkward. If you have acquaintances who may be interested in helping, approach the matter as a business proposition. You may be tempted to make the situation less awkward by being personal and informal in your approach, but this will likely backfire. Playing up your existing relationship will make it more of a challenge for the other person to refuse, even if they aren’t interested in investing. Instead, approach them as you would any other potential investor. Have a plan ready for their review, make your presentation, and be sure they understand you don’t expect a decision immediately. Before launching your appeal, ask if they would be open to hearing about your idea. Leaving them with plenty of opportunities to decline your invitation ensures your primary relationship remains intact.
Look for Micro-Lenders or Apply for a Traditional Loan
If you don’t need much to get going, consider using a micro-loan organization. These organizations are designed to provide small amounts, typically less than $5000. This can be a great way to get your company off the ground if you don’t have much saved and you don’t require much capital. Taking out a traditional small business loan can be the ticket to accessing more money, but it does come with drawbacks. The interest rate may not be great, and if the lender doesn’t think your business will succeed, it can be a challenge to find funds. If you have done your research and have a solid business plan, however, this choice can help set you up for success.
