Business Tips

Funding Your Business

There’s one guarantee about starting a small business: It’s going to take money.

Before you get serious about seeking funds, you’ll want to have a well-defined plan with a clear description of your business, including projected sales, expenses and profits.

Many entrepreneurs start with self-funding by drawing money from savings or retirement accounts. Just keep in mind that while this bootstrapping approach can be a great way to get off the ground, it can also be costly if things don’t work out.

A business or personal credit card is another option to help cover expenses. While there are differences between the two, cards often come with rewards programs. When used responsibly, they can also help build your credit score.

Family and friends can also be funding sources, but it will be important to be clear about how and when the money will be repaid.

Yet another option is crowdfunding, where money is raised through many small donors. Businesses funded in this way often offer products or rewards based on the size of the donation. Just make sure you are aware of any fees charged by the crowdfunding platform you choose.

A business loan from a financial institution is also a possibility, but it can be harder to obtain until your business has a track record. If you decide to pursue this possibility, talk with your financial institution about your options, or visit the Small Business Administration at sba.gov to look into other programs.

While any new venture can be risky, it’s good to know there is money out there to turn your startup dream into a reality.