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Get Financing
Many times, the one thing stopping someone from taking their side hustle to the small business level is lack of money. Despite what you think, there are many ways to get the money to start your business. Before you start applying for grants or loans, do these things first:
- Write a business plan. This is the guide you will follow to start and run your business. The Small Business Administration has a great section full of info and tools to help you write your business plan including a free online course on how to prepare your business plan.
- Put together a list of all of your expenses. After you have a clear idea of the money you will need, add at least $2000 more for unexpected costs. There will always be “surprises” when you start your business. Check out this Finance Start Up Guide from the Small Businesses Administration.
- Take your business plan and all of your financial estimates to a small business counselor so they can give you advice.
- Create a presentation to give to all potential investors.
- Start looking for money early. It usually takes 4 to 6 months to find an investor. Investors can be anyone from friends and family to professional investors like the bank.
Friends and Family
Your friends and family may be in a position to help you with start up cash in exchange for a percent of your sales or even a piece of ownership in your company. They will demand less of a return than professional investors, but will probably not be able to come up with as much cash.
If you do decide to take money from friends and family make sure the terms are clear in the beginning. Doing business with people you know is always difficult because your relationship is at risk if things don’t go as planned.
Loans and Grants
You may be eligible for a loan or a grant. While your local bank might not give you a loan, the federal government has a program for entrepreneurs through the Small Business Administration. Find out more information.
Grants are loans that don’t have to be paid back as long as your business meets certain standards. The Small Business Administration has a list of available grant programs. There are also small business grants available through your state. Check out this list.
Community Development Corporations
Community Development Corporations are not-for-profit organizations that provide services and programs which support the community. These types of organizations are located throughout the country and many of them have lending programs for small businesses.
The programs and types of assistance are different for each organization but a few examples of the programs that are commonly available are: business training, help putting together a business plan, assistance getting an office or storefront, assistance marketing your business etc.
Look in your local phonebook or do a google search to see what Community Development Corporations exist in your area.
Get tips from the Small Business Administration (SBA) on how to get financing for your business.
