Your Business and Startup Capital
So you have decided that employment is not right for you. You have a great business idea and are dreaming of having your very own company. You have already thoroughly studied the prospects of the business. You are aware of the opportunities and possible pitfalls. You have taken an honest look at yourself and see that you have what it takes to be an entrepreneur – the innovative spirit, the willingness to work and wear many hats, the ability to delegate responsibilities and manage people and the passion for what you do.
However, there’s just one thing stopping you – you don’t have the capital to get your business idea to take off. Don’t worry, while it may be more of a challenge to get your business off the ground, the lack of personal capital should not stop you.
Why you need money for your business
As they say, “You need money to make money.” Before you even begin, you need to sit down and make a list of how much you need as a startup. This will help you know just how much you need to raise. Although capital requirements will vary depending on the type of business, here are some of your initial expenses:
– Registration and licenses. Depending on where you plan to operate and on the type of business you plan to start, you need to obtain permits and licenses from some federal and state entities. This includes the city permit to operate, registration for tax purposes, sales tax license and so on.
– Legal fees. In starting a business, you may consider getting the advice of a lawyer to ensure that there are no legal landmines that you may potentially step on in the future.
– Equipment. This may come in the form of office equipment and furniture, computers, peripherals and software, communications equipment (i.e. telephones and Internet connection) and office supplies. You may also need specialized equipment to make your products or to be able to provide your services.
– Office or factory space. You read of stories of how business moguls started their empires in their garage or kitchen. However, this may not necessarily be allowed for your business, especially with tightened restrictions. You may need some space for your workers and production process, as well as for keeping your inventory. Remember, having a space will also entail utilities costs and other overhead expenses.
– Marketing costs. This can include marketing collaterals (such as brochures and posters), your website and costs related to implementing your marketing strategy.
– Operating expenses. Try to imagine what your everyday operations will look like and see what expenses you will incur.
– Initial team. You may need some people on your payroll to help with specific aspects of the business.
If you do not have the personal capital, you can explore different forms of business loans. My Hard Money Lenders provides you with a long list of commercial finance companies that can provide you with a business cash advance or a working capital loan.