Business Funding is a Strategic Advantage
Well, you know, everyone could have a business literally if they had the business funds to satisfy the scale that they want. In other words the more funding you have, the more freedom you have to pursue your business goals more effectively.
On the flip side funding does not help if your plan is flawed but if the plan is well positioned then funding would help you to propel yourself forward very fast. The key is that you need to think through what you want to achieve before you pursue money to get the venture going. What value are you bringing to customers/clients or the shareholders of your business.
In saying that, there are several ways to achieve funding for your business venture. I will try to present them based on the effort levels required to do this.
1. Bootstrapping – This is the case where you have no assets or money in the bank to pursue your dreams. Most times in this case, the best option is to look at providing services or information as your initial product to generate cash to expand your business. Whether you have cash upfront or not, cash flow is the important driver of a successful business.
2. The Business Plan and Idea – This is the case where you have a good idea that you can tap friends and family to help with your business funding. The next level to this is either angel or venture capital funding. The idea that you present and how it offers a good long term business opportunity is the main selling point here. Now in this model, you could lose control of the business so its a tight rope to walk.
3. Bank Financing – This is the case where you focus on getting a loan from the bank. In todays market, it’s very tight so you would need to have very good credit history and your business plan in case needed. Alternatively, along this line, you could look at the many services out there that could help you to obtain business financing. You will need to be careful as they could take your money instead of getting you funded. However, it is possible and could save you the trouble of using your name to guarantee the loan directly.
4. Private Investors – This is kind of similar to #2 but this is the case where you get rich investors to buy into your idea and fund the business over the specified period of time. Most times they want to get out by about 5 years and this gives you the option to buy out their share of the business.
5. US Regulation D – This allows you to offer shares in your company in a limited sense but could get you more than enough to start out plus will not have to lose control of the business.
In the end my view is that you can approach funding in two ways, 1. raise money yourself directly and build on that or 2. Bring others on board to push things faster along. Both of these have upsides and downsides but don’t create constraints by having too much bias on how you get the cash, focus on getting your idea out there and working.
Morleyl Excellent Article I really like your closing argument. “In the end my view is that you can approach funding in two ways, 1. raise money yourself directly and build on that or 2. Bring others on board to push things faster along. Both of these have upsides and downsides but don’t create constraints by having too much bias on how you get the cash, focus on getting your idea out there and working.”
We recently start up a new business and found this website to be a huge help: wwww.funding4marketing.info
We filled out the form and were contacted by a nice lady who transferred over us to their funding department. Unfortunately we were in your “bootstrapping” phase and had no assets to start and did not qualify for funding. However, they really liked our idea and invested $10,000 dollars of their own money into our company and helped us start growing our ideas and helping customers. I highly suggest if people are in the same situation we were to contact this business and they can help.
Inventro
December 13, 2010 at 9:13 pm