By Brooke Chaplan
What was previously thought of as the American dream, owning your own home, is starting to be eclipsed by owning your own business. An asset that earns for you can be much more profitable, and can be carried on by your family for future generations. However, there are a few things all future or potential entrepreneurs need to know and implement before they embark on their business journey. Our article covers several funding ideas to help get you off to a good start.
Your Educational Background or Training
According to the Small Business Administration (SBA), more than half of new startups disappear within the first five years of their launch. Why? Some owners had degrees in business management or business administration. Others had nothing but enthusiasm, and a drive to see their enterprise get off the blackboard. The one telling factor in all startup failures are difficulties stemming from poor financial management. Getting some education, even a basic bachelor of arts in business administration, goes a long way in knowing how to successfully manage a business.
The Indispensable Business Plan
Whether you obtain funding from your own family, a banker, or a business incubator program, you must present a plan, a strategy of sorts, to tell others what your business is all about. You have to know how you’re going to market your product, and how much you’ll need for the first three years. Make sure your plan is well outlined and easy to understand.
Your Funding Sources
You can start off easily from your own resources, including a credit card line or credit from a family loan. Many well-known corporations have done so just to get off the ground with less debt. Traditionally, bank loans have provided the funds needed, as have other private investors. Today, however, what is commonly known as venture capital, angel investors, or even incubator programs are increasingly filling in the gaps left by a failing bank environment.
The facts speak for themselves. Recent surveys by the SBA indicate that only 1 percent of startup funding came from venture capital companies in 2014. In contrast, more than 24 percent of business owners found funding from their inner circle of family and friends, and 41 percent of the funding came from lines of credit.
Whichever source of funding you ascribe to, presenting your business endeavor in the best possible light to any kind of investor is of utmost importance. While having basic knowledge of business management skills is likewise, vitally important, one of the most important qualities any startup owner can possess is having a passion for your product or service and knowing how to convey that enthusiasm so that others may wish to invest in your dream.
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most her time hiking, biking and gardening. For more information contact Brooke via Twitter @BrookeChaplan.