How To Raise Funds To Begin Business And Where To Get Money For Business. By Rolanda Vang
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The common questions for all of us who need to start business are: How to find money to start business, and where to get money for the business?To find money to start business is not as difficult as most people seem to think. That is especially true when you have an idea that can make you and your backers rich. Really, there's more money available for new business ventures than there are good business ideas. We will help you for where you can get money for business.
A vital rule of the game to learn: any time you need to gather money, your first move must be put together a proper prospectus.
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This prospectus ought to include a resume of your background, your education, training, expertise and every other personal qualities that could be counted as an asset to your potential success. It is also a good suggestion to record the various loans you have had previously, 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 will want a revenue and loss record for at least the previous six months, and a plan clarifying how this additional money will produce greater profits. If it is a new business, you will have to show your proposed business strategy, your marketing research and projected costs, in addition to anticipated revenue figures, with a summary for every year, over at least a 3 year period.
It's going to be advantageous to you to base your cost estimates excessive, and your revenue projections on minimal returns. It will enable you to "ride through" these excessive "ups and downs" inherent in any starting business. You must also describe what makes your business distinctive - how it differs from your competitors and the opportunities for expansion or secondary products.
This prospectus must state precisely what you are offering the investor in return for the usage of his money. He'll need to know the percentage of interest you are willing to pay, and whether monthly, quarterly or on an annual basis. Are you offering a certain share of the profits? A share of the business? A seat on your board of directories?
An investor makes use of his money to make more money. He needs to make as much as he can, regardless whether it's short term or long term deal. To be able to attract him, interest him, and persuade him to "put up" the funds you want, you will not only have to offer him a chance for big profits, but you will have to spell it out in detail, and further, back up your claims with proof out of your marketing research.
Venture investors are often quite familiar with "high risk" proposals, yet they all need to reduce that risk as much as possible. Therefore, your prospectus ought to include a list of your business and personal assets with documentation - often copies of your tax returns for the previous three years or more. Your prospective investor might not know anything about you or your business, but when he wants to know, he can pick up his telephone and know every thing there may be to know within 24 hours. The point here is, do not ever attempt to "con" a possible investor. Be honest with him. Lay all of the info on the desk for him. Typically, in the event you have got a good idea and you've done your homework properly, and "interested investor" will perceive your position and offer more assistance than you dared to ask.
It's always a good idea to have an attorney and an accountant to help you make up your business prospectus. As you clarify your plan to them, and ask for their advice, casually ask them in the event that they'd mind letting you know of, or steer your way any potential investors they could happen to meet. Do the same with your banker. Give him a copy of your prospectus and ask him if he'd look it over and offer any recommendations for improving it, and naturally, let you know of any potential investors. In either case, it's always a good suggestion to allow them to know you are willing to pay a "finder's fee" in the event you could be directed to the right investor.
Brought to you by Rolanda Vang
