Operating a business is a huge financial responsibility. It takes capital to start, maintain, and expand your business. Making sound and informed financial choices can help your business thrive. There are many choices when looking to fund your business needs. We’ll examine a few and provide resources for entrepreneurs and small businesses to consider.
Planning and Research
Before you begin any business, planning is essential. Besides knowing what type of business you wish to run and how you will operate, you need to determine how much it will cost. Each business is unique and has different requirements. You will need to conduct some research in order to understand the cost. Consider your expenses, such as renting or purchasing property, licensing and insurance fees, commuting costs, advertising, wages, training, equipment, inventory, and vehicle expenses, to name a few. Many expenses can be written off. Keep a record of your expenses, capital expenditures, and any assets you have on a spreadsheet. If you see that the costs are high, revisit areas where you can make adjustments. It is also good advice to speak with other business owners to get a realistic feel for how much operating a business costs.
Financing Your Venture
There are several ways to fund your business, including using your own money, getting a loan, applying for grants, help from others, or investors.
Self-funding your business allows you to have complete control, but also all the risks involved in the business. You might consider using savings, trust funds, money from family and friends, or even your retirement fund to obtain the capital you need. Avoid spending more money than you can afford. If so, you run the risk of losing your business or having to seek out other funding options.
Loans are another financing option if you don’t have enough capital. Before applying for a small business loan, make sure you have a business plan, expense sheet, and financial projections for at least the next five years. If you’re looking for a traditional business loan, shop around to different banks and credit unions to compare rates and terms. Agencies, such as the Small Business Administration (SBA), GovLoans, the U.S. Department of Treasury’s Small Business Lending Fund, and the U.S. Department of Agriculture might be able to offer solutions if you experience difficulty getting a traditional bank loan.
Consider using investors to help finance your business. Again, the SBA is a great resource for investment programs, including their Small Business Investment Company (SBIC), Small Business Innovation Research (SBIR), and Small Business Technology Transfer (SBTT) programs. With investors, you will almost certainly have to give up a portion of ownership and control in your business. Make sure you understand all of the terms and requirements involved in the investment before making any agreements.
State and local business resources can also aid in funding your business through grants and other programs.
Business Consumer Alliance has offered an abundance of services to businesses for decades. We assist small businesses in several ways, including increasing their visibility, promoting businesses, assisting in mediation and arbitration when problems arise, and many more benefits designed for your business. BCA members get personal assistance from a team that is readily available to help. We are consistently working to improve and enhance the services we offer to our members. BCA members are welcome to call our friendly staff to find out if there are any programs we offer that you have not yet utilized or to share with us any additional membership benefits you would like us to consider. If you are not a BCA member, contact us right away to see what we can do for you—you won’t regret it.