One of the top reasons why new businesses fail is that they have insufficient funding. Because I never want to see this happen to you, I would like to cover some key tips for generating capital for your business, even if your new venture is only days or weeks old.
The truth is that many new business owners feel they must prove themselves first before seeking outside funding to help drive growth, marketing, and sales. The perception here is that banks or venture capitalists are looking for solid track records and evidence of success, prior to wanting to contribute valuable funding. This dilemma presents a Catch-22 for many business owners. They feel that they need success to attract funding and this same funding is what is needed to generate success. While I cannot guarantee that following the tips outlined in this article will translate into funding for your business, they have been shown to help and it is certainly worth pursuing them. After all, for many, a business represents a life’s dream and, in this case, is it not worth pulling out the stops to help realize that dream? With that said, what can you do?
First, have a clear vision in mind for your business. If you don’t have a clear and written business plan, start working on one right away. There are numerous resources available to you to help with this and, believe me, it is definitely something that sources of capital will want to see. After all, a business with a plan is easier to see value in than one that just presents flash and hype.
Second, consider all possible types of funding sources. Sure, you may your own resources but this can be limiting for many business owners. Other types of capital sources can include: bank loans, business lines of credit, private lenders, and venture capitalists or angel investors. Each type of source will have its own lending criteria and it is worth knowing them as you work to raise money for your business.
Third, be willing to see the big picture. Your need for funding may currently be minor in scope and this can limit you if you only seek what you need in the next month or even year. Consider the larger scope of your business before seeking funding. What if your business becomes national, or even international, in terms of the customers it serves? What needs will you have then and will your funding account for this type of growth? When you look at your business in this light, you will start to pursue funding as aggressively as you pursue customers, and this will only fuel continued growth.
Last, give yourself a little credit and believe in your business. Just because you’re small now doesn’t mean you still will be in the near future. As a business owner, you are the voice of your company and you must believe that what you are pursuing is worth every penny of what a funding source will provide to you.