Sherman Oaks Accounting & Bookkeeping powered by One Source Services, Inc. talks to budding entrepreneurs every day, and we’ve heard that obtaining capital is often one of the most challenging aspects of starting a new business.
So how does an entrepreneur fund their endeavor if they don’t already have money in the bank, friends or family who can reliably contribute, an approved loan, or credit cards they are willing to load with debt?
It’s an excellent question that clients often ask.
Our response is to do first-things-first and draft a list of anticipated start-up costs.
Initial expenses might include fees for permits and licenses, filing fees, safety provisions, equipment, marketing campaigns to get the word out, and move-in costs to name a few.
Some expenses may be flexible while others may be firm.
If you’re not sure about doing this alone, then Sherman Oaks Accounting & Bookkeeping powered by One Source Services, Inc. can be by your side.
Once you’ve determined what your estimated start-up costs are, next think carefully about what less-costly alternatives are available.
For example, can you get by with your old equipment or purchase pre-owned instead of brand new? Can you start with marketing that requires less upfront investment, like social media, rather than expensive activities like direct mailing?
Educate yourself on business technology, as well; there are ways to reduce start-up expenses by making smart technology choices. Our team is well versed here if you’d like our input.
Sometimes costs can be cut altogether, or perhaps put off until sales start rolling in. We’re available as a second set of eyes to analyze your situation.
After you’ve done this, if you still don’t have enough funding for your business then perhaps it’s time to think about expanding your sole proprietorship into a partnership.
Teaming with a trusted partner might increase capital, manpower, and even introduce new products and services to complement your business.
Sometimes taking on a partner can help you break into a new niche market.
The chosen partner must be a good fit for your needs and have a high level of commitment to your joint venture. Do your homework first!
Then, have an attorney write-up a contract that clearly details the partnership terms and conditions.
Sherman Oaks Accounting & Bookkeeping powered by One Source Services, Inc. can refer you to excellent, reliable attorneys who can do this in their offices, your office, or remotely from wherever you choose.
Government and private group small business grants can help, too.
Award amounts vary and most require significant effort to apply and win, but it’s certainly worthwhile to give it a go. Especially if you get an award!
Grants.gov, beta.Sam.gov, Small Business Innovation Research, and the Economic Development Directory are good places to start.
The Amber Foundation Grants help women start small businesses.
The Business Owners’ IdeaCafe Small Business Grant is awarded to the business with the most innovative idea.
As with everything, do your research thoroughly and familiarize yourself with an opportunity’s specific requirements before taking the time to complete and submit an application. Sherman Oaks Accounting & Bookkeeping powered by One Source Services, Inc. can help with this, too.
Then there is crowdfunding, one of the newest ways to raise capital.
Unlike peer-to-peer lending, crowdfunding asks the general public for donations and monetary support for a project with no repayment expectation. Although, the requesting business usually promises some benefit to a contributor, such as free products, discounts, or something else to say thank you for the donation.
Kickstarter is currently one of the most popular crowdfunding websites.
In addition to the many options discussed here, there are also small business loans available, venture capital investors looking for start-ups to invest in, and debt financing. Let’s talk about which funding options are best for your business.
Whichever you choose, the rule-of-thumb is to always do thorough research.
You’ve probably heard the expression that, “Time is money.” You wouldn’t want to lose time, and basically money, because you weren’t well prepared!
Sherman Oaks Accounting & Bookkeeping powered by One Source Services, Inc. has CFOs on-hand to help with every aspect of funding your business, from advising, researching and selecting the best opportunities, to completing paperwork and submitting applications, cash forecasting, and budgeting.
We are the small business experts!