HOW MUCH DO YOU NEED TO START YOUR BUSINESS?
Lack of working capital is one of the most cited reasons for business failure. However, in my opinion, you don’t need a huge bank account to start and grow a business.
There are many sources of funding that can be obtained after you have validated your product/service.
The first step in starting your business is to define your product or service. Describe in detail the product/service and, if possible, create a prototype of your product. It does not have to be a fully working model, just enough to show the concept.
There are certain advantages to not having a huge bank account at the inception of a business. It forces you not only to save money, (you can’t spend what you don’t have), but it also forces you to define your product or service in a clear and compelling way.
I have worked with firms that have been able to accomplish the above, by self-financing, often with less than $10,000.
The validation process and possible pre-sales, forces the business owner to clearly identify their target market and then find out, in person, what they think about the product/service. This contact method, carefully documented, gives you the validation you need to either continue or “go back to the drawing board”.
Pre-sales and endorsements may be a result of these initial contacts with a target market; both of these will be a great help in raising needed capital.
The actual fund raising process has been enhanced by several factors:
- The growing economy is creating a “feeding frenzy” among some venture capitalist to get a foothold in a new and promising business.
- Small Business loans are also possible from the SBA
- Friends and relatives can be sources.
- Online fundraising has proven to work for several types of ventures
These are but a few of the possible sources for raising capital. The “ask” in each case has to be carefully orchestrated. I always recommend starting with the creation of a pitch deck as the initial presentation method. Its purpose is to arouse interest which will allow you to go into a full presentation.
In other words, don’t ever give up on your idea until you have determined that it cannot succeed.
Always reach out to Ask the Duck if you have questions.
Surround yourself with positive people. You can do this!
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