About Entrepreneurs | Home Based Business

Adequate financing is another key concern when starting a business. You'll need to invest some of your own money - putting your funds into a business venture underscores to potential investors or financial institutions your commitment to the venture. Most people don't have sufficient personal resources to get a business up and running.

Fortunately, there are myriad sources of financing. Commercial banks, the SBA and private individuals are important providers of working capital. Although its funds are limited, the SBA can be particularly helpful for businesses owned by women and minorities. Check with area banks to find out if they offer special programs for local or start-up businesses.

Carefully prepare a thorough, well-thought-out loan proposal that includes the following:

General information about the business, such as the company name, principal employees, the purpose of the loan and the amount needed.
Business description including the history and nature of your business, number of employees and current assets.
Management profile on each principal in your business, detailing education, experience, skills and accomplishments.
Market information that defines your products as well as your market and competition, and a customer profile explaining how your business satisfies their needs.
Financial statements such as balance sheets, income state¬ments for the past three years, a personal financial statement and collateral that will be used as security for the loan.

You may consider seeking private investors who wish to have an equity stake in your business. Relatives or friends may be potential investors. Keep in mind, however, that these people may, understandably, expect to have a say in how the business is run. Whatever the agreement, get it in writing. Treat friends and relatives the same as you would other investors.