Contrary to
popular belief, small companies can access many of the financing channels that
are available to big business. Listed below are a few financing options with
tips on how to make it work for you.
*Bank
Financing.* The advantage of bank financing is that you retain 100% control
of your company. The bank in essence is a silent investor who remains that way
as long as you make your payments. The trick to bank financing is timing. It is
best to obtain financing when you do not need it. In example, you can establish
history with a bank with investments such as GICs or CDs. You then apply for a
line of credit against the investment. As you pay off your loan cycle, you are
building a good credit history with the bank. In time you would be able to
obtain an increase in the amount the bank would finance. It's good practice for
every business to establish a line of credit when things are good. In this way
you have access to money when there is a need.
Investors. Investor money is
available to start up and established companies. Among the things that
investors evaluate are the management team, the industry and opportunities for
growth, the business idea and timing, and the execution of the strategy.
Start-up companies will not have a history so it's important to have a team of
experienced people with a track record of past success. Investors are not
gamblers but calculated risk takers. When meeting face to face they are looking
for knowledge of the marketplace and competition as well as fire in the belly
and willingness to make sacrifices to achieve success.
*Friends
and Family.* Many businesses start with a little help from their friends. This
"love" money can also help you access outside funding. Banks and investors do
consider this in their financing decisions. After all if you cannot convince
those closest to you to believe in your business, why would a stranger take a
chance on you? When you and your circle of support make a financial sacrifice
it validates your commitment to the business.
Be Prepared. The key to successful financing is
preparation. You should have a solid business plan with a good executive
summary, power point presentation and a finely tuned elevator pitch. Be
prepared with documentation to validate your position, including financial
statements, patents and copyrights. A good website is also helpful.
A business
should plan for financing as diligently as they plan for business development.
Develop mentor relationships with investors in advance of starting your
business. This will enable you to receive free expert advice that will help you
to fine tune your plans and presentations. Finally, seek financing from a
position of strength not crisis. It is far easier to acquire funding when you
do not need it.
If you liked this, I suggest downloading the business chapter excerpts here for more insider business information... www.readtheanswer.com/index.php?RTA=web2
popular belief, small companies can access many of the financing channels that
are available to big business. Listed below are a few financing options with
tips on how to make it work for you.
*Bank
Financing.* The advantage of bank financing is that you retain 100% control
of your company. The bank in essence is a silent investor who remains that way
as long as you make your payments. The trick to bank financing is timing. It is
best to obtain financing when you do not need it. In example, you can establish
history with a bank with investments such as GICs or CDs. You then apply for a
line of credit against the investment. As you pay off your loan cycle, you are
building a good credit history with the bank. In time you would be able to
obtain an increase in the amount the bank would finance. It's good practice for
every business to establish a line of credit when things are good. In this way
you have access to money when there is a need.
Investors. Investor money is
available to start up and established companies. Among the things that
investors evaluate are the management team, the industry and opportunities for
growth, the business idea and timing, and the execution of the strategy.
Start-up companies will not have a history so it's important to have a team of
experienced people with a track record of past success. Investors are not
gamblers but calculated risk takers. When meeting face to face they are looking
for knowledge of the marketplace and competition as well as fire in the belly
and willingness to make sacrifices to achieve success.
*Friends
and Family.* Many businesses start with a little help from their friends. This
"love" money can also help you access outside funding. Banks and investors do
consider this in their financing decisions. After all if you cannot convince
those closest to you to believe in your business, why would a stranger take a
chance on you? When you and your circle of support make a financial sacrifice
it validates your commitment to the business.
Be Prepared. The key to successful financing is
preparation. You should have a solid business plan with a good executive
summary, power point presentation and a finely tuned elevator pitch. Be
prepared with documentation to validate your position, including financial
statements, patents and copyrights. A good website is also helpful.
A business
should plan for financing as diligently as they plan for business development.
Develop mentor relationships with investors in advance of starting your
business. This will enable you to receive free expert advice that will help you
to fine tune your plans and presentations. Finally, seek financing from a
position of strength not crisis. It is far easier to acquire funding when you
do not need it.
If you liked this, I suggest downloading the business chapter excerpts here for more insider business information... www.readtheanswer.com/index.php?RTA=web2
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