So You Need Capital For That New Business?

Imagine you have the perfect business idea and the only thing stopping you is the fact that the project is going to cost more money than you may have anticipated. Before anything gets going you must raise capital to fund the project. So now you’re wondering how does one go about raising capital?

• Figure out why you need the money. You must determine whether you really need extra funding or if you are better off running a smaller operation until you turn a profit.
• Get ready to answer questions. You will be drilled from every direction possible when it comes to asking someone for money so get ready to answer every imaginable question.
• Compare & contrast all methods possible for obtaining funding. The different methods of acquiring capital is a topic that I’m going to save for the next post. The key point here is that you must determine which source would be ideal for your business and stage you are at.
• Put together a solid team. Find a marketing guy, find an accounting guy, find a technical guy, and find a person that will ensure you all work together. Not saying you need all of these people but it would help if you have a team of people with many diverse skills. It also doesn’t mean that you need 4 different people because one person could be excellent at accounting & marketing and so on.
• Work out a strategy relevant for your source of funding. Obviously your approach will have to vary depending on how much money you are looking for and on whom you plan on asking.
• Do not give up until someone accepts your proposal. This process may take many months and possibly many years. No matter how many people turn you down do not give up.