How To Finance Your Business Startup - Some Practical Strategies

[Pierre Clark]

Writer's Note: Everyone thinking about starting a business wants to know: how to get the money. Here are some tips and strategies. (I'm using these myself. Let me know how they work for you.)

By Pierre A. Clark. From "The Entrepreneur's Corner.(tm)" Copyright 2009-2010. All Rights Reserved.


Stats show that more than 60% of all small business startup funding for a business comes from the founders and personal friends of the founders. So you'll have to raise the first startup cash yourself and demonstrate your business commitment and your concept's potential before investors will be interested. Here are 10 ways to raise up to $10,000 cash:

1. Host a fundraiser: Create an event, sell 100 tickets at $100 each.

2. Pre-sell your services or products. Sign up potential clients to contracts and collect downpayments on
account from each of them.

3. Sell stock shares in your company. If you start a small business corporation in Illinois, you can sell up to $1 million in stock shares usually without registering the company as a public corporation.

4. Hook up with a non-profit organization, start a program built around your product or service and write a grants application to solicit funding though the non-profit.

5. Enter a business plan competition. The Miller Beer Urban Entrepreneur Competition gives out $25,000.00 in grants to business entrpreneurs under 30 who are starting their own businesses. Kool Cigarettes sponsored a similar competition and there are many others.

6. Create a website and sell your products or service through the website. Here is an example of one guy who generated $1 million cash by selling pixels on his webpage: http://www.milliondollarhomepage.com.

7. Locate investors with cash to invest (from $100.00 to $1,000) and offer them a promissory note stating that as investors you will pay them a 20% to 35% return on their invested funds within one year. These rates of returns are much higher than most investors can get from banks, mutual funds, etc.

8. Promote your business in the Business Opportunities classified ad section of your local newspaper (Sun-Times, Tribune, Defender, Crain's Chicago Business, local community newspapers and business-oriented newspapers like Trading Times). Many investors read these papers looking for deals and opportunities.

9. Compile a mailing list of new businesses that place their new business announcements in local newspapers, then prepare a letter introducing your company and its services and offering your services. You may generate a strong client list from these new businesses which can supply you with startup capital.

10. There are citry, county, federal and state sources that offer business startup funding including the SBA (Small Business Administration), MBDA (Minority Business Development Agency) and others. The SBA offers microloans up to $50,000 for which you don't need collateral or even a tax return. Google "microloans" and you'll find hundreds of potential financing sources.

These ideas should get you started. Good luck and if you have any questions feel free to call me at 312-473-0373.