Few Funds? Get Creative to Start Your New Business

The first issue to address is to understand how much money you will actually need. This may be determined by how many hours in a day you can work, how much product you can produce, or how long it will take for you to build a client base.

It is imperative for a new business to keep its overhead as low as possible. Anything you have to spend money on will eat away at your profits, before you even have any!

When it comes to actually funding your business , don’t be afraid to ask your relatives and friends for help. You don’t have to ask for thousands of dollars from each of them.

Although it is scary to think about, obtaining a bank loan can help you with the start-up funding you need. If you have a good credit score, this should be no problem.

If you are unable to raise the money you need from people you know or borrowing from the bank, you may want to consider crowdfunding. This is a tool that allows you to get money from strangers who believe in your business idea and want to be a small part of what you’re doing. For more information on crowdfunding, look at websites such as Kickstarter and Crowdfunder.

As a very last resort, you may want to consider a loan from your 401k. You should confer with your accountant so you fully understand the consequences of borrowing from your retirement fund. In some cases, you can get a loan from your 401k as long as you pay it back in the next year. Failure to do so, however, can result in harsh penalties.

Whatever type of funding you decide to pursue, it is important to have the agreement with your investors reduced to writing. Having a contract in place is the only way to protect yourself and to help preserve your relationship with friends and family that invest in your business.

If you are interested in learning more about how we can assist you with your business-related needs, contact the knowledgeable lawyers at The Swenson Law Firm to schedule an appointment.

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