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When people are thinking of starting a business one of the first questions they usually ask is, "How will I get funding? Or "Is it possible to get a grant?"
In most circumstances unless you are a non-profit organization or have a doctorate in a very special skill the chances of getting a grant are very slim, but there are a few legitimate places to look for your opportunity.
Some infomercials promise new entrepreneurs that there are millions of government dollars waiting for you, if you want to buy their books to find out how. It’s almost sure to be a let down if you send them any money. However, if you want to search for potential grants that you may qualify for, www.grants.gov is a legitimate site where you can fill out a form that will give you free listings of all grants in your category. Then hire a good grant writer and start hunting!
Some of you may have heard about grant opportunity from the county tourism board. This is because there are a few governmental and non-profit agencies that have received grants to give grants but the amounts are usually very small, typically under $1,000.
It is good to be realistic about the financial impact of running your business. Understanding all of the financial responsibilities and being prepared are the best way to prevent your new business from going under. Making a mock budget and being prepared to cover your expenses for the first two years is often advised. Consider things like rent, salaries, fees, taxes, utilities, advertising, signage, and inventory.
The Oakridge Economic Development Advisory Committee is all about keeping you open for the long haul; we would like to see your business here for many years if not the rest of your life, so our goal is to be sure you have considered all realistic options. There are banks and other financial institutions available to help you financially if that is an avenue you want to consider.
Most, if not all, of these financial resources will require a business plan and they like to see a credit score somewhere at least above 650; better yet 750. Nonetheless, the business climate of 2012 means the higher the credit rating the better. Go to annualcreditreport.com for a truly free credit report (Contrary to its name, FreecreditReport.com does NOT provide free credit reports.)
With that in mind be prepared to do a lot of research and a lot of planning before asking anyone for funding. The good news is this is basic research that you would need to do anyway if you’re serious about wanting a successful business. There are many business plan samples online that one can download for free and tutorials on how to write them, such as this one at the Small Business Administration website: app1.sba.gov/training/sbabp/index.htm But just to give you an idea here is the kind of information you’ll need to know.
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How much will this cost to make (not just materials but staffing, utilities, etc. all factored in)?
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How much will I sell it for?
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Who are my customers? How will I reach my customers?
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What makes my product better/different than others?
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How much will staffing cost?
If you can answer these and similar questions you will prove to a lender that you know what it will take to operate your business at a profit.
Software like Business Plan Pro can make this process far easier. This program, which is available to use on the computer at the Oakridge Library, has templates where you fill in the blanks. Want to open a pet store? Open the Business Plan Pro template for that, fill in your name and other basic information and it will create the business plan for you. If you would rather buy this program you can find it online at www.paloalto.com It costs about $100 but is worth the price.
The last important thing to remember is that you should have your Trinity of Management in place: that is, people who will perform the tasks of operating your business “beautifully, passionately and well.” No one does everything well, so be sure that besides having a manager for the product or service itself, you have expert help marketing and selling that product or service, and someone sincerely skilled and excited about managing the financial end of the business. Usually one person is good at two of the three things and will need help with either the marketing/sales piece or the financial management. You may know someone who does well what you do not, and if you want to stay in business you might be well to take advantage of that person’s skill.
We have put together a list of groups and organizations that can help in different aspects of new business development and finances:
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