The process of looking for funding
for a new business can be very frustrating since there are so many different avenues
to explore. It definitely pays to take the time to research the different alternatives
and to leave all funding options open in order to make the best decision for oneâs
startup. Two ways in which a new entrepreneur can effectively raise capital is by
seeking the advice of other business owners and the assistance of the Small Business
Administration. While both do not directly provide
funding to entrepreneurs, they do offer a wealth of resources which can
guide the new business owner in the right direction.
Consult with other business owners
Many new entrepreneurs simply do not know much about the process of entrepreneurship
or how to go about marketing their unique
business ideas. While their business ideas may be of great value, many are
not aware that it requires money to make their ideas a reality. Discouraged by exorbitant
startup costs, many prospective entrepreneurs simply do not pursue their dreams
any further because the entire process may be quite intimidating.
One way in which a new business owner can learn more about the process of
entrepreneurship
is by asking other business owners about their personal experiences. Often times,
existing business owners can give first-time
entrepreneurs valuable insight into
the practice of private enterprise and what to expect during the development of
their new company. In addition, fellow business owners, who have been through the
process of funding, can discuss the ways in which they were able to effectively
raise startup capital.
In addition, existing business owners are often enthusiastic about mentoring others,
making it very beneficial for an entrepreneur to take advantage of such an opportunity.
By consulting with other small business owners who have already been through the
startup process, the
entrepreneur puts himself/herself ahead of the game.
Seek assistance from the SBA
Government agencies, such as the Small Business Administration, can also provide
entrepreneurs with much needed support for their small businesses. The main objective
of the SBA is to strengthen the overall economy of the United States; therefore,
it is their mission to protect the interests of all prospective and existing small
businesses. Their website (www.sba.gov) offers a multitude of resources to first-time
and
existing entrepreneurs on how to manage and expand their businesses effectively.
They also have information on how to increase oneâs business knowledge and productivity
for a successful company.
In terms of funding, the SBA acts as a guarantor of small business loans through
local banks. The goal of obtaining a loan through an SBA loan program is that the
borrower can take advantage of longer periods of repayment with low interest rates.
While it can sound extremely promising for
small business owners to partake in an
SBA loan program, these types of loan plans can be quite competitive. People with
a good credit rating and credit history are often the ones who are considered for
SBA loans. Another downside is that obtaining a small business loan through an SBA
loan program is often not enough to cover all startup costs. So in addition to an
SBA loan, the entrepreneur will also have to find additional funding elsewhere,
including family and friends, and even
private investors to fill the needed startup gap.
Conclusion
Looking for funding for a new
business does not need to be a tedious and exhaustive process. By exploring different
options, new business owners will find a solution to their funding problems. Through
the consultation of existing business owners and by obtaining resources from the
Small Business Administration, the
entrepreneur can find novel ways to get their
new business going in the right direction.
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