This blog will be a break from the You, Inc series of blogs, and it gets back to the main goal of this site which is funding your small business.
One Unique Start-up Business Funding Source
Although this isn’t normally thought about when business owners start looking at funding for their small business start-ups, it should be high on the list as it probably is the easiest source to approach.
You’ll read about it in just a minute, in the meantime, let me start with a disclaimer: Although I say that this is the easiest to approach it isn’t the easiest to sell your idea to.
Character and Capacity
Whenever you approach a funding source, you are going to sell them on your business idea and that will require you to be very specific, very clear, and have a definite goal. Let me explain further.
Specific: You, the business owner, will need to know exactly how much money you believe you will need and how you came about that. You also need to know exactly how you are going to return the investment to the investor – the ROI.
Clear: You, the business owner, will need to be very clear on what it is that makes your business a winning investment for the person who is going to fund this project, especially in terms of what you believe your market can afford, and what your products or services will do, as opposed to another business just like yours (and, believe you me, you may have a unique product or service, but the business concept is probably around somewhere else.)
ROI: You, the business owner, will need to know exactly what the payoff (the Return On the Investment) will be for the investor and how that will impact your business. In other words, if the investor wants a return of 15% will your business be able to absorb that? If the investor wants a return of 24% will your business be able to absorb that and still stay solvent? Do you understand what the investor expects from you and are you prepared to work with investor if he or she decides to be a hands-on (part) owner of your business because [fill in the blank] disaster?
Until you have these items very clear in your mind and somewhere on a operational document or business plan, you are going to be fighting an uphill battle to convince investors that you have a winning project that is worth investing in.
So, what are these very approachable funding sources?
These very approachable funding sources are your local attorneys and accountants, who deal with several wealthy clients.
What do they expect from you?
These professionals worked long and hard to acquire and keep these well-off customers and they are going to do their hardest to make sure that their anonymity is protected and will work doubly hard to make sure that their wealth is well protected. There will always be exceptions but the above are pretty much the rules.
How do you reciprocate this professionalism?
First, research your business venture thoroughly, and specially its potential. With so much history behind business creation, at least here in the United States, it will be fairly simple to gather the needed information to create a very believable business plan.
Second, err on the side of caution. If you think your business is going to need x amount of money to get started and going, double it, because you will probably need that or more.
Third, create a professional presentation and make sure that you have it proof-read, listened to, and criticized thoroughly and if need be, hire a consultant to help you with the details. If it is important to you to secure the funding, then make it first class and show how much value you place on the professionals you are going to be working with.
Fourth, show passion for your venture because you will be the only one who will have it. It’s your baby so why not paint it as the greatest kid around? If you aren’t passionate about your business venture no one else will be no matter how winnable it may be.
Fifth, persevere. There are enough attorneys and accountants around that you should be in a great position to take advantage of this opportunity. If one won’t help, buy him or her, a half hour of their time and ask for honest feedback. You may be able to find out what it takes to get to the next step or the person may simply refer you to someone else who may be closer to helping you get your funding.
Final Thoughts on Start-up Business Funding Sources:
This is another tool in your arsenal and it isn’t the end all specially at this moment in time. Funding is going to be looked at very thoroughly as investors are afraid that the collapse that is going on in the marketplace may beat a path to their doors and that will cloud their judgment. Don’t give up.
This too shall pass and soon enough you will be able to find the funding you need for your venture.
Until the next time, best wishes in your venture.