How To Raise Money to Start Business and Where to Get Money for Business

The common questions for anyone who want to start business are: How to raise money to start business, and where to get money for my business?To raise money to start business is not as difficult as most people seem to think. Actually, there's more money available for new business ventures than there are good business ideas. We will help you for where you can get money for business.A very important rule of the game to learn: Any time you want to raise money, your first move should be to put together a proper prospectus.This prospectus should include a resume of your background, your education, training, experience and any other personal qualities that might be counted as an asset to your potential success. If it's for an existing business, you'll need a profit and loss record for at least the preceding six months, and a plan showing how this additional money will produce greater profits. If it's a new business, you'll have to show your proposed business plan, your marketing research and projected costs, as well as anticipated income figures, with a summary for each year, over at least a three year period.It'll be advantageous to you to base your cost estimates high, and your income projections on minimal returns. This will enable you to "ride through" those extreme "ups and downs" inherent in any beginning business. You should also describe what makes your business unique---how it differs form your competition and the opportunities for expansion or secondary products.This prospectus will have to state precisely what you're offering the investor in return for the use of his money. Are you offering a certain percentage of the profits? A percentage of the business? A seat on your board of directories?An investor uses his money to make more money. The point here is, don't ever try to "con" a potential investor. In most cases, if you've got a good idea and you've done your homework properly, and "interested investor" will understand your position and offer more help than you dared to ask.When you have your prospectus prepared, know how much money you want, exactly how it will be used, and how you intend to repay it, you're ready to start looking for investors.As simple as it seems, one of the easiest ways of raising money is by advertising in a newspaper or a national publication featuring such ads. Your ad should state the amount of money you want--always ask for more money than you have room for negotiating. Your ad should also state the type of business involved ( to separate the curious from the truly interested), and the kind of return you're promising on the investment.Take a page from the party plan merchandisers. Explain your business plan, the profit potential, and how much you need. Give them each a copy of your prospectus and ask that they pledge a thousand dollars as a non-participating partner in your business. Check with the current tax regulations. You'll need the help of an attorney to do this, however, and of course a good tax accountant as well wouldn't hurt.It's always a good idea to have an attorney and an accountant help you make up your business prospectus. The next time you talk with your doctor or dentist, give him a prospectus and explain your plan. Look them up in your telephone book under "Investment Services." These companies exist for the sole purpose of lending money to businesses which they feel have a good chance of making money. In many instances, they trade their help for a small interest in your company.Many states have Business Development Commissions whose goal is to assist in the establishment and growth of new businesses. Not only do they offer favorable taxes and business expertise, most also offer money or facilities to help a new business get started. Your Chamber of Commerce is the place to check for further information of this idea.Industrial banks are usually much more amenable to making business loans than regular banks, so be sure to check out these institutions in your area. insurance companies are prime sources of long term business capital, but each company varies its policies regarding the type of business it will consider. It's also quite possible to get the directories of another company to invest in your business. Also, be sure to check at your public library for available foundation grants. These can be the final answer to all your money needs if your business is perceived to be related to the objectives and activities of the foundation.Finally, there's the Money broker or Finder. These are the people who take your prospectus and circulate it with various known lenders or investors. The important thing is to check them out fully; find out about the successful loans or investment plans they're arranged, and what kind of investor contacts they have---all of this before you put up any front money or pay any retainer fees.There are many ways to raise money---from staging garage sales to selling stocks. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company.Start thinking about the idea of inviting investors to share in your business as silent partners. Think about the idea of obtaining financing for a primary business by arranging financing for another business that will support the start-up, establishment and developing of the primary business. Give some thought to the possibilities of getting the people supplying your production equipment to co-sign the loan you need for start-up capital.Remember, there are thousands upon thousands of ways to obtain business start-up capital. This is truly the age of creative financing.Disregard the stories you hear of "tight money," and start making phone calls, talking to people, and making appointments to discuss your plans with the people who have money invest. There's more money now than there's ever been for a new business investment. the person with a truly viable business plan, and determination to succeed, will make use of every possible idea that can be imagined.
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