When I started Just Face It! back in 2003, my bank account read "are you serious". I had no money and according to society's standards, no business trying to open a business. BUT, my passion to open Just Face It! wouldn't allow me to give up. For two months, I would go to our local library and do research on finding funding for small businesses. One day, I stumbled across Count-Me-In.org, a website and organization that was dedicated to helping women start their own business. At the time, they offered micro-loans for start-ups through an application process. Part of that process was having a business plan (wink, wink...check out week 1) that the organization could comb through and determine if you were worthy of a micro-loan. I figured it was worth a shot, so I applied. After several weeks, I received a letter in the mail along with a check for $3,000! My business plan helped me secure the loan. Now, they ran your credit and that had to be stellar as well, but ultimately, my business plan for Just Face It! proved to the organization that I was both serious and passionate about my business.
That was 11 years ago!
Fast forward to today and there are a TON of ways to fund your dream business. Let's take a look at a few.
Crowdfunding
Crowdfunding is the new wave of helping entrepreneurs get started. Even though many say the concept has been around for ages, it is still recognized as one of the new ways for businesses to secure funding because it is all done by internet. Crowdfunding is where a project or venture is backed by "crowds" of people who support by giving small amounts of money. Most of the time, the person who donates will receive a reward for donating.
Here are some of the top crowdfunding websites (not in any particular order):
www.kickstarter.com
www.indiegogo.com
www.rockethub.com
www.onevest.com
Loans
While I did receive a micro-loan for my first business, I actually do not recommend this for a start-up and here's why. When you are in the beginning stages of starting a business, you are typically strapped for cash. With any kind of loan, you will have to pay it back with interest and almost immediately after you get it. I did great financially when I owned Just Face It!, BUT each month I had to send a check for $130 back to the Count Me In organization, which took away from my profits. If you can avoid it, don't do a loan unless the terms are right for you.
The best place to start when looking for a loan is the Small Business Association's website at www.sba.gov/content/sba-loans
Angel Investor
An angel investor is someone who supports the start-up of a business by providing it with funding. Sometimes, a group of angel investors will come together to offer capital for a start-up. These type of investors typically provide capital in exchange for a percentage of the company (think Shark Tank). I have never used an angel investor, but from other people who have, there are some pros and cons. The most obvious con is that you are giving up part of your company in order to gain funding. A pro is that an angel investor (who is obviously wealthy) may have other ties to people who can help support you in the start-up process.
The best place to look for angel investors is on the Angel Capital Association's website at www.angelcapitalassociation.org/directory/.
On any of these funding options, ALWAYS do your research. Yes, you may want to open your business as fast as you can, but you don't want to put the business in a situation that could potentially derail the plans to even open. Also, it is always wise to consult with a CPA and/or business attorney if you are unsure of anything. Oh, and ALWAYS read the fine print.
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