Getting your small business off the ground will take some serious planning. Once you have your ideas in a row, you’ll need to put together a business plan, get an EIN, set up a bank account, and find some money. Funding your dream business may take several paths.

 

Getting a Small Business Loan

To apply for a small business loan, make sure that you have done your homework. You will need a fairly detailed business plan, as well as a listing of all of your assets. Be prepared to make your pitch before many lenders to get the attention of the right investor.

 

Bootstrap or DIY

To bootstrap a business, you’ll need to start small. For example, if you want to start a catering business, you might

• keep your regular job for a time
• start selling pre-made meals to busy professionals
• take the income from this and improve your cooking gear
• offer package party deals to these same clients
• once your foot is in the door, offer referrals

 

The codeword for “bootstrap” is “tired”. Working for yourself can be exhausting, especially if you already have a full time job. However, everything you make in the early days will need to go back into the business, so unless you have support or substantial savings, starting your business in your off hours is an option.

Borrowing from Friends and Family

To successfully borrow from friends and family, make sure you have something in writing. Your aunts and uncles may be lovely people, but if your business tanks, things could get nasty. Don’t sign up to pay more than you can afford from your current wages, and consider getting everything in front of an attorney before you accept the check.

 

Be very careful when borrowing from friends and family. These dollars are extremely useful because personal loans don’t show up on your credit report. However, if your loan from your uncle makes life hard for your aunt in the event that your uncle dies and she needs the money now, family relations could be seriously damaged.

 

Be diligent about these payments. If there’s a chance you’re going to be late, contact them immediately, not on the due date, and offer all the transparency you can about the reason for your lateness and your plans to avoid it in future.

 

Getting a Grant

There are also grant options for starting a small business. If your region is economically depressed, you may qualify for a state or federal grant if you can offer employment. You can also apply to receive Lantern Credit grants for small business. Via Lantern Credit, your application for a grant will also give you a lot of the data needed to apply for a loan once your business is ready to expand.

 

The year 2020 has been hard on employees and business owners alike. Many employees have come to the realization that they need more security than their job, even if they love it. If you have a great idea for a business, now is the time.

 

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December 21st, 2020 by financetwitter

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