Financing a startup business

This Hub answers the question put forth by Carantarch:  How can a startup business succeed when every creditor turns you away?


Turn this question around and you might see the problem...

Why would a business lending entity take any risk on your "proposed" business when you haven't done the minimal amount of preparation work? i.e. the business plan and the financial forcasts? You say you haven't because they take cash to put into action, well, you know, if you want some one to lend you cash, they want to know that you have a plan to make it work, and that you'll not just go out and equip a lavish office and then lean back in your newly purchased "executive leather" chair and expect money to roll in..... oddly enough, your verbal assurance and handshake is not going to cut it.

The business plan is the road map of where you think you're going to go, and how you think you're going to get there, and it's preparation shows you've given the business "some" thought. Part of showing that you have the determination, courage and strength to make a business a go is that you have spent some time, your own time, that you have spent and risked, putting together a plan to run the business. It's nice to know that you " will not quit" but how about showing that you've started?

You are essentially stating "I have a lot of drive, give me some money and I'll make a business work". Even a scam artist has a good dog and pony show to put on for potential investors. You want to get $10,000. to start up, without a business plan? I suggest you make sure your credit is clean and apply for some credit cards. More than a few enterprises have been started that way, but if you want to be able to borrow some serious money for a start up you need to have a workable dog and pony show for the potential investors, and more than likely, if you're young, the first investors are still going to be parents or other relatives with a bit of spare cash or equity in their homes.

Start up businesses have a startling high failure rate which is one reason you find no one anxious to give you money. When you further show you have little idea of how to proceed (otherwise you would be waving you well written business plan in every one face), well, you should begin to see the issue.

If you Google "how to write a business plan" you get 38 million results in .25 seconds. Again there is a reason it's an oft Googled and often discussed topic. You have the most useful tool right in front of, the computer

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