Where can I get money to develop my business?
Start-up capital is the first and significant step in the start-up of any business. However, in reality, no one will bring a bag with paper bills, to become an heir of a rich foreign relative does not shine, and banks prefer a business that is already in operation. But, despite this, there are enough ways to get the necessary finances to create and start your own business:
- Borrow money from friends or relatives
- Take a loan in a bank
- Sell movable or immovable property
- Get a job and use it as a source of moneyfor business
- Win a cash prize in the
- contest Find an investor
Borrow money from friends or relatives
Getting a loan from a bank is a complicated bureaucratic process that is far awaye always ends in favor of the petitioner. It's another matter - native people who are always ready to help, so loans from relatives or good friends sometimes become the only opportunity to implement the plan. Even if the next relative lent the necessary amount of money, it is necessary to take the utmost seriousness to the trust given. Debt is given for a long period and often without burdensome interest, and if a receipt is required, one should not take offense at the simple gesture of legitimizing a personal transaction.
It is better to suggest that an oral contract be fixed in writing, so that a relative has confidence, and you have the responsibility to return the finances. The pluses can be attributed to the speed of receiving money, because after a request and with a sincere desire to help, the cherished amount will appear within a few days. Clear deadlines are also absent, and no one from a close circle resorts to the monthly return of the debt.
However, the minuses at the most bright position of things also have a place to be. The future businessman clearly and clearly imagines what his travel agency or store will be like. That is why he does not need additional instructions, which begin in the near future after the loan to sin relatives, and some friends are not even limited to advice only, asking for input into the case.
Events can develop in another scenario, when a relative is filling up with serious or minor requests. To refuse it is inconvenient, therefore and it is necessary to be distracted more and more often on extraneous problems which have been not connected with promotion of the begun business. Money was given without restrictions in terms and without interest, but none of the related and friendly ties were canceled, which sometimes are worse than a clear framework.
It is not uncommon for a situation where a money issue has spoiled family ties and long-standing good relations, or it has become a negative factor for the development and maintenance of further friendship. Both relatives and friends are always ready to help, but with lightning speed they can change their appearance if "their money" is disposed of incorrectly. To break off a relationship is a sharp dispute or a small disagreement, so between the fear of losing a business or losing a loved one should make a choice before applying for financial assistance.
Take a loan in
Bank An undoubted positive moment will be the freedom of action in business management, since no bank is concerned about whether a client is going uphill or not - just to pay the loan in a timely manner. But not every bank will decide to give out the amount to an entrepreneur starting from scratch, even if he is full of enthusiasm and creative ideas. However, the risk is still worth it.
First of all, you should determine the amount of the loan, which is easy to calculate, based on the expected average monthly profit. The resulting figure is multiplied by the loan period( taken in months) and by a fixed coefficient equal to 0.7.From this amount, and you need to build on the conversation with the bank.
Any bank will want to pre-insure in advance to not suffer losses in the event of a burnout of your business. A common element of insurance is a pledge in the form of property. The presence of such increases at times the chance of obtaining a loan.
When choosing a loan program, it is difficult to give specific advice, since each banking institution has its own, and the approach to the client is always individual. If the program was previously chosen by the borrower himself, then one should not sound the proposal abruptly "into the forehead" of a bank employee. To a conversation, it is better to carefully prepare to avoid its pitfalls.
It is necessary to answer the questions related to previous debts with care, but it makes no sense to hide them if they were in the past credit history. The banks study not only the information provided by the client, but he himself, so the appearance should correspond to the good earnings indicated in the questionnaire.
It is not necessary to enlist other sponsors, even if they are friends, relatives or successful businessmen. The less people involved, the better, because at the dawn of one's own business, additional responsibility and obligations are of no use.
Sell movable or immovable property
If before visiting the bank an option is considered to set up an apartment, house or car as collateral, you can look at the property on the other hand. The only housing should not be put under the hammer, but if there is a house inherited from it, you need to send it to business development.
With regard to the housing issue, there is always the opportunity to revise the living conditions. For example, a large apartment can be exchanged for a more modest one with an additional payment, which actually can be invested in a profitable business. Such changes are not eternal, because sooner or later the business will go up, and buying new housing will become real.
If the working day does not involve endless trips, it is worthwhile to think about selling a car. In addition, a trip in public transport is sometimes much cheaper than refueling and servicing your own car. One can look at the situation from such a perspective that the sale of cars will become a kind of contribution to the further purchase of a new one.
Get a job and use it as a source of money for business
Thoughts about creating your own business most often arise in people who for some reason are left without work. The zeal is very commendable, especially if there is a certainty of one's own strengths and capabilities, which are supported by the unwillingness to continue working "on his uncle."In this situation it is better to understand yourself, to make sure that the aspirations for independence are not dictated by emotions and resentment.
Passion will eventually fade away, feelings will fade away, and debts will remain with you. It does not matter where you took the money to start a business: from relatives or in a bank - they will have to be returned. And all the present mood will seem trivial in comparison with those problems that will arise in the near future.
Before getting into debt, you can find a decent and well-paid job, so that from the salary part of a little put off to create a business. It will not be superfluous to find additional work to accelerate the process. All successful businessmen do not cool down and do not rest on the couch, but are in constant movement, so you should start to get used to this pace now. But after a while, there will be a feeling of pride for the work done and for your decision. After all, in this case, no one helped, and you started a profitable business yourself, from the very start.
Win a cash prize in the
competition. If you have an idea to get a start-up capital by winning a lottery, you should drive it as far and faster as possible. Because this fantasy is in one category with an inheritance from an overseas grandfather. A real chance appears only with participation in one of the competitions.
Every year, many scientists, students, developers of all stripes and entrepreneurs receive money to realize their lucrative ideas. There are many organizations that provide the necessary opportunities. In addition, participation in such events is in itself considered an indispensable practice for the sale of its own concept to strangers.
Some of the projects provide a number of beneficial benefits and provide business education, in addition to the declared capital. The thing is that most of the co-founders are themselves entrepreneurs and felt not only changes with the start of business, but also the importance of starting capital.
Find an investor
More than 90% of start-ups are thinking about the need to attract investors, but few realize his "portrait".Before you start looking for people who are willing to invest in your business - you need to decide on a group of people who will be interested in it. All investors, without exception, react differently to proposals from the side about investing money in the company, depending on the stage of development of the business.
It's silly to expect that after an introduction to the business plan, the investor will "fork out", because at the initial stage or when the enterprise is established, there is nothing in the asset of the future businessman, except grandiose ideas and patents. Representatives with single samples of products are much less common. The planned project has an initiator, but there is no managerial link or not fully formed. In addition, all business processes are either not established at all, or in a vague stage of development.
Is it any wonder that outside investors should only look for those who are inclined to venture investments with increased risk. Before applying for financial assistance, it is necessary to draw up a summary and a detailed business plan, which should be documented. The investor must see and understand that the project is not only ambitious, but also quite realistic, and subsequently also profitable.
Resume is best sent together with a specific proposal, so that the letter was not regarded as an advertising spam, to which the Internet is teeming. Do not rush to extremes, waiting for a response from one person or sending summaries to hundreds. Lack of actions will not bring the desired result, and a serious investor will react to a mass mailing with a little doubt.
The golden middle will be the choice of no more than ten investors who invest finance in the industry where it is planned to start a business. After the resume has been sent, you need to wait a week and personally call back everyone to find out if your project has interested them. If the answer is positive, it is wrong to fall into a euphoric state, drawing yourself a bright picture of future cooperation. The counter offer may radically differ from the existing plans, so it is worth waiting for a response from other investors.
If the goals are the same, then it is better not to hesitate with the negotiations and the meeting. In a conversation, you do not need to darken, trying to be mean and not to reveal all the cards to the end. Believe me, the investor is not a competitor, but an assistant, so a clearer and clearer idea of the business project will give far more chances than playing a secret agent( of course, provided that the investor is honest, honest and professional in his business).
Before receiving venture capital investment, it is recommended that the business model be carefully analyzed and a mini-presentation is made for the family or friends. And if they do not have a desire to invest at least a ruble in the enterprise, outsiders can not dream of investing.