HOW TO RAISE MONEY FOR STARTING YOUR OWN BUSINESS

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The task of raising money for a business is not as difficult as

most people seem to think.

 

This is especially true when you have an idea that can make you

and your backers rich.

 

Actually, there's more money available for new business ventures

than there are good business ideas.

 

A very important rule of the game to learn: Anytime 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.

 

It's also a good idea to list the various loans which you've had

in the past, what they were for, and your history in paying them

off.

 

You'll have to explain in detail how the money you want is going

to be used.

 

If it's for an existing business, you'll need a profit and loss

record for at least the proceeding 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 will 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 "up and downs"

inherent in any start-up business.

 

You should also describe what makes your business unique - how

it differs from 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.

 

He'll want to know the percentage of interest you're willing to

pay, and whether that will be paid monthly, quarterly, or on an

annual basis.

 

Are you offering a certain percentage of the profits?  A

percentage of the business?  A seat on your board of directors?

 

Start thinking about the idea of inviting investors to share in

your business as silent partners.

 

Think about the idea of obtaining finance for a primary business

by arranging financing for another business that will support

the start up, establishment and development of the primary

business.

 

Consider the feasibility of merging with a company that's

already organised, and with facilities that are compatible or

related to your needs.

 

Give some thought to the possibilities of getting the people

supplying your production equipment to guarantee 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 to invest.

There's more money now than there's ever been for new business

investment.

 

The problem is that most beginning "business builders" don't

know what to believe or which way to turn for help.

 

They tend to believe the stories of "tight money" and they set

aside their plans for a business of their own until a time when

start up money might be easier to find.

 

The truth is this:

 

Now is the time to make your move.  Now is the time to act.

 

The person with a truly viable business plan, and determination

to succeed, will make use of every possible idea that can be

imagined.

 

And the ideas I've suggested here should serve as just a few of

the unlimited sources of monetary help available and waiting.

 

It's always a good idea to let them know you're willing to pay a

"finders fee" if you can be directed to the right investor.

 

Professional people, such as doctors and dentists, are known to

have a tendency to join occupational investment groups.

 

The next time you talk with your doctor or dentist, give him a

prospectus and explain your plan.

 

He may want to invest on his own, or perhaps set up an

appointment for you to talk with the manager of his investment

group.

 

Either way, you win because when you're looking for money, it's

essential that you get the word out to as many potential

investors as possible.

 

Don't overlook the possibilities of the Small Business

Investment Companies in your area.

 

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 favourable 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 on 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.

 

Check your local agent for the name and address of the person to

contact.

 

It's also quite possible to get the directors of another company

to invest in your business.

 

Look for a company that can benefit from your product or service.

 

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.  They always require an

up front or retainer fee, and there's no way they can guarantee

to get you the loan or the money you want.

 

There are many very good money brokers, and there are some that

are not so good.

 

They all take a percentage of the gross amount that's finally

procured for your needs.

 

The important thing is to check them out fully; find out about

the successful loans or investment plans they've 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. eople who have money to invest.