1. Explore diverse opportunities for capital
Consider local and national microenterprise development organizations that will provide microloans and small business loans through the Small Business Administration. Furthermore, local Community Development Financial Institutions (CDFIs) also support small business in economically divested areas and provide access to specific federal dollars for community development.
Another emerging market are crowdfunding options such as GoFundMe, Indiegogo and Kickstarter, allowing you to take your idea to the public and garner support from individuals invested directly in you and your business. With the vast amount of resources out there, make one of them work for you. You have what it takes to access capital, and with a strong enough business model, it’s about knowing which avenue will allow you to obtain capital you need most effectively.
2. Prepare to pitch your business and start early
Whether you’re approaching a traditional or alternative funding source, being adequately prepared is essential. Be ready to sell your business and defend your concept. You should always have a clear and concise 30-second elevator pitch ready. Garner support and interest by humanizing the sell – why would someone turn to you rather than a similar business in the area? Remember personal stories tend to sell it best. Often, it’s not the business people believe in, it’s the individual.
You should always have a clear and concise 30-second elevator pitch ready.
Garnering support from the greater community will not only promote the growth of your business, it will help demonstrate the soundness and strength of your business model – strengthening your case for institutional financing before even stepping into the bank.
3. Seek and nurture a positive working relationship with a banker
Don’t settle for a banker based solely on a financial opportunity or an existing connection to a bank. There are many different types of banks and bankers out there. A strong relationship can be the difference between obtaining capital and being denied capital. Do your research and go with what feels best. A strong banking relationship can not only provide the financing you need, it can also lead to multiple avenues of support and future capital.
4. Know what resources are out there, and how to capitalize on these resources
Successful business owners should know themselves and understand their capabilities. This is especially important when it comes to your financials. Seek out mentors, accountants and financial advisors that you can trust and who understand your business goals. Diverse perspectives will strengthen your business model, and help to compliment your strengths as an owner. Maintaining knowledgeable partners will allow you focus on what you do best.
There are many ways to get connected to trusted resources, mentors and advisors. The Small Business Administration provides resources through its Small Business Development Centers, Small Business Development Technical Centers, Women’s Business Centers, and SCORE. Additionally, your state’s Chamber of Commerce, as well as local chapters of national organizations, are great places to turn to for help.