Home Business

How to find financing to get your home business off the ground
By Thomas Keeler
Aug 19, 2008

Finding the necessary funds to launch your new home business may seem daunting, but it doesn't have to be fruitless if you abide by a few basic business principles.

If you can present a solid business plan that shows off the great potential of your idea, you have a good shot at finding investors who are willing to fund you.

Your business plan needs to be very professional and very detailed. It needs to be neat and easy to read, and provide all the relevant information about your proposed business as well as your own professional and personal background. Include your educational history, your work experience, and any relevant training you have received.

If you have good credit, you can also put in some information about loans you have satisfied along with the appropriate payment history. It can help prove that you are stable and reliable when it comes to financial obligations.

For the meat of your business plan, you need to outline in detail all the thorough market research you have done--you better prove that your concept is viable and can justify the investment. You also need to break down the projected costs and provide a detailed plan of how your business will generate income. You should extrapolate these figures for 3 to 5 years, and make sure you don't underestimate your costs.

Your investors will want to know how they will receive a return on their investment, so detail the exact terms in clearly.

Finally, include any other qualifications you think will convince investors to believe in you, as well as contact information for references.

Before you show your business plan to any potential investors, you should probably have a lawyer check it over. You'll undoubtedly receive some good feedback and be informed of anything you might have overlooked.

Once you feel your business plan is ready, you need to start searching for investors.  A common place to begin looking is friends and family. You can also browse the classified ads of newspapers, search local business directories, or look online to locate companies specializing in investment services or investors such as venture capitalists.

Be aware however that venture capitalists tend to be picky and demand high rates because they tend to take on risky investments. You can also try locating “angel investors” whose requirements are typically not as high. As a twist, you can try putting out your own ads, emphasizing how much investors can expect to receive as their return.

You can also try going to your local bank and securing a business or personal loan. It might be helpful to locate a bank that specializes in small business or industrial loans.

You can also try to think outside the box--if you truly believe in the potential of your business, there are plenty of creative ways to find the funding you need. Be determined to launch your business at all costs. Whether you're looking for $500 or $50,000, the money is out there. It’s just waiting for you to come find it.

---