This month we’re here to talk to you about the necessary—but often stressful—part of new business planning—funding. Last month was all about crafting a business plan and really solidifying how you hope to launch and grow your business. Now, we need to talk dollars and cents. There are many options at your disposal for securing the funds to launch your new business. Read on to learn about planning for the funding that you need and determining the best way to secure it.
Determining Your Business’s Funding Needs
As part of your startup planning, you’ve likely already put pen to paper and have at least some idea of basic costs for starting your business. Now, you’ll need to more fully develop those plans and estimates, really breaking down what it will cost to get your new business up and running. Depending on the type of business you’re looking to start—brick and mortar, online, or service—you’ll have varying startup costs, and you should definitely do some market research during your planning.
According to the U.S. Small Business Administration (SBA), there are some startup costs that all businesses need to consider no matter the industry or business type. Business experts agree that physical space, inventory or product costs, salaries, permits, and marketing costs are just a few of the costs you should be considering. We recommend mapping out your anticipated expenses and then using a tool, like a start-up cost calculator, to flesh out the details. If you really want to be forward thinking, you can also calculate your break even point with a cost analysis tool!
Self-Funding a Startup
After you’ve mapped out your expenses, you’ll need to consider where the funding for your new business needs will come from. You may be fortunate enough to have the necessary funds on hand to get your business up and running, or you may have friends, family, or savings you’ve kept for this very opportunity. Self-funding gives you complete control, but it also opens you up to bearing all the risk of the business not performing well. Be sure to weigh the pros and cons of self-funding before you dive in head first.
SBA Funding Options
If self-funding is not something you’re keen to take on at this time, you might also consider the various funding programs that the SBA offers.
- SBA Loan Programs—The SBA offers a variety of loan programs for small businesses of all kinds seeking minor and major funding. Small businesses should consider the 7(a), 504, Microloan, and Community Advantage Loan programs as they’re seeking out funding options.
- Investment Capital—Through a Small Business Investment Company approved by the SBA you can find investors interested in your new small business.
Let Us Help!
At Growth Capital, we know that money is often the stress point when it comes to business planning. Luckily, we’re here to help! For over 30 years we’ve been helping small Ohio businesses navigate funding their dreams from the ground up. Our team of passionate business development professionals would love to do the same for you and your small business, so let us know how we can help!