Funding Your Business Venture

Funding your business venture used to be an easy task. You simply pulled out your financials and sat down with your banker.

The most challenging part is that few companies are financed entirely by one means.

Typically, it is a conglomeration of funding sources. Perhaps a company starts out bootstrapping, but soon applies for an SBA loan, or looks for angel investors, or leases equipment.

More often than not, businesses do not know what it is that they need, and so they don't get it. Sure you need money. Every company could use some more money. But why do you need it?

Seriously, why do you need the money?

Do you need to hire a marketing guru?

Do you need to beef up your inventory?

You need business start up advice from a number of specialists?

Do you need to pay off bills?

It makes a huge difference.

Let's look at that first one: the marketing guru. There are lots of really smart marketing people out there, and they don't all cost an arm and a leg. Get in touch with your Bootstrapping Group (you do belong to one, don't you?) and see who other companies have used. You will be amazed at what you can find.



Need inventory? Sure, the easiest way is to buy it. But demonstrate your real entrepreneurial spirit and negotiate longer terms for that product. If you are in good standing with your supplier, odds are pretty good you will get those longer terms. Change suppliers if need be.

There is a lot of extra product sitting in warehouses.

How about all that advice and support you need as a small business? Look for a small business incubator. That physical setup is designed just for you. A number of small businesses come together, sharing space and knowledge, often with the backing of the SBA or local Chamber. The success rate in incubators is outstanding, so that will smooth the way for all other types of financing you may need as well.

You need to pay off bills? Well, you better have a really good plan in place for paying back any loan you are asking for. Once you become a bad credit risk, it is really, really hard to get financing anywhere.  This makes funding your business venture very tough indeed.

The object is NOT to get money. The object is to accomplish your goal, whatever that may be. The more ingenuity you can demonstrate at this level of your business, the easier it will be to raise traditional funding later on.

Jog your memory with all the different types and styles of funding your business venture. There should be one or two or three that strike your fancy. How about

• Angel investors
• Equipment financing
• SBA Mentor Protege Program
• Re-negotiate your lease
• Sell your equipment and lease it back
• Venture lending
• Small Business IPO

There are lots of ways to fund a business. The trick is to find the one that works for your business at this point in time.

Solve part of your problem with one solution; solve another part of your problem with another solution.

Be sure to check out the Articles on Business Finance -- there are some more gems there.

I am writing this as the economy is still in the midst of a recession. Believe it or not, this is an excellent time to look for business funding. Any company that can demonstrate how it is weathering the financial storms is just so far ahead of the pack. Put your company out there. Start planning now. Funding your business venture will be a lot easier than you had imagined.

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