Finding the cash to make your dream a reality
Cold-hard cash and where to find plenty of it is often the biggest roadblock for anyone starting their own business. But if depleting a savings account, borrowing from family and friends, or maxing out a credit card are not the answers to your funding woes, here are a few potential alternatives to financing your dream.
Cheryl Wagner, coordinator of training at the University of New Orleans Small Business Development Center, frequently points potential small business owners to various Websites to avenues for ready cash. "There are a lot of people who have great ideas, but are unaware of how to even put together a [business] plan," she says. "Websites from the SBA (Small Business Administration; www.sba.gov) are perhaps the most informative. You'll find tips on how to formulate and implement a bold and cogent plan," says Wagner. "You'll also find a multitude of financing sources at www.ideacafe.com," and www.businessfinance.com.
According to a sampling of industry experts, here are the five best ways to finance your business:
* Personal Savings. Many new businesses purchase assets (machinery, office equipment, vehicles) and other start-up supplies and inventory with money from a personal savings account. However, these personal savings won't appear overnight. As soon as you feel the entrepreneurial urge--even if you're not sure what to do about it, you should begin to dedicate a portion of your earnings towards a business start-up fund that will be there for you when you're ready to take the plunge.
* Trade Credit. This arrangement allows the business owner more time on the front end of the cash flow cycle, prior to payment from customers. These firms are often willing to extend 30, 60, or 90 days of payment terms to you as your exclusive industry supplier.
* Commercial Banks. Generally, bank-lending practices aren't about helping start-ups get off the ground. Still, the SBA recently ranked the best bank-holding companies in the country by the amount of...