Financing Your Business
ByFollowing on from last weeks post and all the great suggestions, I’ve decided to do it every Wednesday. A prize will be offered for the best suggestion and the winner will be announced the following week. For the winner from last week, look at the end of this post.
One of the most comment reasons I hear for people not starting a business is money - they don’t have the money to buy all the stock they want or get their ideal website.
If you know my story, I started the Business Mums Network with $100, and built it up slowly.
There are many ways you can finance your business. My question today is how did you finance your business? Or, if you don’t want to share that, what are some creative ways business mums can finance their business?
This weeks winning comment will receive a copy of Raising a Business by Sonia Williams.
The winner of last weeks comment is Sascha from Activ8 Change. Congratulations Sascha, we will get your CD out to you in the next few days.
6 Comments
June 5th, 2009 at 12:43 pm
What about using your $900 stimulus payment? Other Business Mums have been known to use their Baby Bonus payment, retrenchment package, tax return money or some savings that you put aside while you are still working.
June 5th, 2009 at 5:28 pm
First off, I am by no means a mum of any sort; I’m a 19 year old entrepreneur who was searching twitter for ‘business books’ and stumbled across your blog
I hope you don’t mind my replying to your post; I would love to share how I started out as it doesn’t matter what gender you are or whether or not you have children yet to accomplish growth from small amounts of initial investment 
I may as well introduce myself! Haha! I’m Michael Montgomery, as I said earlier I’m a 19 year old entrepreneur. I’m based out of Emmett, ID and I own a few small businesses. I started my first business (’first’ can be disputed because I registered them with the state of Idaho a few minutes apart), Montgomery Enterprises LLC around October of 2007. It is a vending machine company. I use to work in the bike shop of our local True Value hardware store and had learned how to fix bikes rather well because of it; occasionally a my friends would find or no longer need their bike and would give them to me (usually in disrepair) and I would fix them up and mess around with them; I usually ended up painting them. Well there came a time where I had about four or five of these bikes lying around and I really had no need for them so I took them down to the local pawn shop. At the time I had recently seen an infomercial promoting starting a vending machine company and was really interested in starting my own. Well incidentally the shop I took my bikes to had five antique machines in the back room they just couldn’t get rid of. I thought I’d hit the jackpot! They offered to trade me the machines for the bikes which I eagerly accepted.
I know that was waaaay over wrote but the point is this, it does not, in my humble opinion, matter how much money you have at any given point if you want to start a business of your own. It matters however what you have available to you in usable skills that you have already developed or are capable of quickly and efficiently honing and mastering. If you have a skill that can make you money; use that to develop the initial investment you need to start your dream business; if you already have the skill required for that business stop over thinking it, write down a few goals associated with your talent that you can use to build it into an income stream and start hammering it out!
Hope this was a relevant response to your topic, I did this for my other company Double-Take Industries (funny and custom clothing) as well, but don’t want to take up any more space than I already have!
Mike
June 5th, 2009 at 11:51 pm
When starting a business first write a business plan so you can understand the financial burden your business will have and if your idea is actually feasible. I would suggest sending this to an accountant and lawyer, to get a second opinion. If running a partnership which enables greater skills and capital contribution, it’s imperative that you from a written agreement, you can do this with a lawyer no matter how many years or how strong you friend or family relationship is, it is a must!!
Ok so now back to the finance sort of things. You can either look around for investors such as family and friends by giving them a simple portfolio on your business. In regards to sales or revenue, they can receive some sort of percentage; similarly it’s like being a shareholder.
Ok the second option is to look for loans from friends and family, these are good as they usually contain no interest but like most this is a dream for us all. Other financial options include debentures, money borrowed by the public covered by business assets. Other avenues also include personal or business loan or adding the loan amount to your mortgage. Did you know business loans have a higher rate, thus you will save!
Now there is of course the option of a bank overdraft, but this really depends on your needs and amounts to be financed and you must question if you can or can’t pay this money back even with or without sales.
Another greater option would be to bring your business plan and budgets into a bank to encourage higher lending amounts.
Last of all you can also seek independent organisations or government bodies for funding such as City of Melbourne provides grants for particular businesses. For more information perhaps view http://www.business.gov.au
Centre link also provides these services. Other avenues may include your own personal or partners income, investment, superannuation (if your over the age limit) and of course the lovely stimulus payment.
I hope this helps,
Kind regards,
Michelle Anderson
June 5th, 2009 at 11:56 pm
I forgot to mention you can purchase stock in small portions and slowly sell your products. Or you could run a business similar to like Ruslan Kogan did, where you got enough orders first paid, so you could order the products. Of course this only works for some businesses.
There is also plenty of opportunity to save. I financed my business through saving my money from the income I learnt in my IT and marketing part-time home based business. This was financed by my hubby’s IT consultancy income. So when considering opening a business there are many ways to getting started but make sure you market test and have a plan ready for your new product or business otherwise just like the other 80% or so your business may fail in the first 3-5 years of trade.
I hope this helps,
Kind regards,
Michelle Anderson
June 7th, 2009 at 12:11 pm
I run two business. My first business was financed by the sale of my investment property. I keep some money over from it after purchasing our current home to the reason to start up my own business.
For website I looked around and found an aussie wahm who did great template websites for a very reasonalbe price, website up and running for less than $20O with full year hosting.
Another great way to start in your own business is to find a great party plan business that has low costs to get in and great commissions back to the consultant. Most importantly love what you do!!
June 9th, 2009 at 11:27 am
I’ll save myself typing - I have an article full of ideas on how to finance a business ‘outside the square’ of banks & loans - http://www.wordconstructions.com/articles/business/creativemoney.html
Personally, my biggest cost to start up (given I already had a computer) would have bene advertising so I did a lot of networking and used promotional articles to get started.