Making a small Business plan

Nevertheless hundreds of thousands of individuals a year do find the money to start a business. How do they do it? How do they find the money to get started? Here are 17 solutions for financing the startup of your small business. Some are nearly risk-free. Others involve significant financial risk and should be used with caution. 1 - Start part-time. If you need a steady source of income to meet your financial obligations (and keep your family covered by health insurance) start the business as a part-time venture. Don't quit the day job until the part-time business has a steady flow of customers and profits. 2 - Start the business from home. You can start your business for much less money if you don't have to foot the bill for office space and utilities for an out-of-the-home office. While you may not want to advertise the fact that you work from home, you will have plenty of company. According to the US Small Business Administration Office of Advocacy, 52 percent of businesses are homebased. 3 - Get advance commitments for work. Line up one or two sources of business before you take the plunge. Former employers, if you left on good terms, are often a source of start-up work, or sometimes funding. Big companies that can send you their overflow work or small jobs that they don't want to do can also provide the initial stream of work and income. 4 - Get a part-time job. Work part time and save up your earnings until you have enough money to start the business. Or, as an alternative, work part- or full-time in your own business and take a part-time job to supplement the income from your new business   5 - Rent equipment and tools needed for your business instead of buying them. If you don't have a lot of money to lay out for tools and equipment - or you aren't sure how much you'll need any item - look into renting what you need on an as-needed basis. There are places to rent everything from power tools to backhoes. Then, when the business has cash coming in, buy only those items the business uses regularly. 6 - Buy used equipment instead of new. Sure, it's nice to start a business with shiny new equipment, desks and file cabinets. But you may be able to save a significant amount of money by purchasing items you need used. Search the web for "used restaurant equipment" or "used laboratory equipment" or "used office furniture," or watch Craig's list, local newspapers for sale and auction and going out of business notices. Local garage and "moving" sales may also be a source of inexpensive items to use. 7 - Use a credit card. Using a credit card - if you have good credit - is the easiest way to get money to start a business. Equipment, suppliers, advertising and postage (for mailings) can all be purchased with a credit card. And if your credit card gives you a line of credit, you can give yourself an instant loan (up to your credit limit). But using a credit card to start your business bears some significant risk, too. If you're not careful you can quickly run up a huge credit card bill - a bill you'll be responsible for paying whether your business is successful or not. 8. Apply for a micro loan. Microloans are small loans,available through a variety of resources including community sources, online lenders and peer lending groups. The size of the loan, eligibility, interest rates and terms vary according to the source. Read this article for more information on microloans and lenders. 9 - Consider crowdfunding. Crowdfunding sites make it possible to raise small amounts of money from a lot of people if you can interest them in your project or business. A word of caution: Remember that crowdfunding makes the idea for your business product or service public. If you need to keep your idea confidential, don't use crowdfunding. Talk to an intellectual properties attorney before publiciing anything that is unique and potentially patentable. 10 - Apply for a home equity line of credit. Some banks offer home equity lines of credit that let you borrow up to as much as 75% of the appraised value of your home. Depending on the value of your home and what you still owe in other mortgages, that can put a significant chunk of money at your disposal for starting your business. The downside: you're putting your home at risk. If the business fails and you can't repay the loan, you could lose your home. If you decide to go this route, be sure to read the Federal Reserve Board's information about home equity lines of credit. 11 - Apply for business loan instead of a home equity loan. Information you'll need to give the bank includes the: purpose of the loan, projected opening-day balance sheet (new businesses), lease details, amount of investment in the business by the owner(s), projections of income, expenses and cash flow, signed personal financial statements and your resume. You may also need a formal business plan. (If you’re trying to get funding to grow a business you've already started, you'll also need business financial statements for the last three years, and information on receivables, payables, and outstanding debt.) Don't be surprised if the bank turns you down, though. Banks are often leery of lending money to startups. For more information on bank funding, see our articles about getting business loans. 12 - Ask Your Bank About an SBA-guaranteed loan. If the bank turns you down for a business loan, ask them if they'll consider your loan through the SBA guaranteed loan program. If they agree to do so, they'll forward your loan application and credit information to the nearest SBA district office, for a decision. 13 - Borrow from family and friends. Family and friends are a frequent source of funding for small businesses. But remember, you have to live with your family for a long time - and you probably want to stay friends with your friends. So don't borrow from unless you have a business plan and have done enough research to know there is a market for what you want to sell. Be sure your plans provide a way to also pay interest on the money borrowed from family and friends. 14 - Look for angel capital groups in your area if your business has the realistic potential to grow to a significant size, (Your local SBDC or SCORE office may be able to point you to a group in your area.) You'll need a business plan and be able to prove that you have the experience to run the business and the business will make enough money to make the investors a nice profit on their investment. Learn what angel and venture capitalist look for in our section on finding investors. 15 - Consider applying for a loan through peer lending sites like Prosper.com and Lendingclub.com 16 - Live frugally - and invest the savings in your business. You don't have to live like a pauper or waste hours searching for 50 cent-off coupons to live frugally. A few simple changes may save you $200 a month or more. Depending how much coffee you drink, for instance, making it at home or in the office instead of buying it at Starbucks or Dunkin Donuts could save you $10 or $15 a week. Bringing your lunch to work instead of ordering it out could save you another $20 or more a week. Eating a home-cooked meal instead of bringing home fast foods or eating out on week nights could possibly save you yet another $20 or $30 a week. Turning your thermostat down a degree or two during the heating season, and turning it up a degree or two when you have the air conditioning cranking away will save you significant amounts of money during the year. If you're determined to save money, you can probably find a lot of other ways to cut back on your spending. 17 - Tap into your savings. If you have savings, consider using some of the money for your startup. But don't put every penny you own in the new business. You still need to keep money set aside for emergencies. Copyright 2016 Attard Communications, Inc. For additional suggestions see, this list of common sources of financing for small businesses as well as the articles on our business loans and financing topic page.  inShare 138 About the author: Janet Attard is the founder of the award-winning Business Know-How small business web site and information resource. Janet is also the author of The Home Office And Small Business Answer Book and of Business Know-How: An Operational Guide For Home-Based and Micro-Sized Businesses with Limited Budgets. Get great business ideas and advice like this sent to you in email twice a week. Subscribe to the free Business Know-