Starting or growing a business is often desired by many people, but businesses need money to grow. And unfortunately, most businesses don’t have enough revenue to grow themselves so other options have to be used to fund the ultimate dream.
Here are some key ways for you to fund your business when the money you’re making in it just is not enough:
1. Apply for a Business Loan
Although people are often resistant to taking on additional debt, the reality is for many people trying to start or grow a business, taking out a business loan is their best option. This allows them to have the necessary funding needed to market, hire employees, secure a location if necessary or do any of the multitude of things required of an entrepreneur trying to grow and scale.
Unfortunately, this option is not for everyone as business loans can often be quite difficult to option, particularly from financial institutions. This can be due to credit scores, the lack of credit, low revenue and a ton of other issues. For those where this is not an option, one of the other funding methods may be more useful.
2. Take on Investors
Investors can be the perfect option for some businesses to grow. You can find investors by tapping into your family members, friends or those who are professional investors on the hunt for their next good investment opportunity.
There are all sorts of ways to structure investment deals so it is crucial to consult a business attorney before doing so to ensure you are fully protected and the deal is in your best interest.
I recently had a client who negotiated such a deal with an investor before consulting me. As a result, the client gave away a significant interest in their company that was not necessary to close the deal. There were also key components in the deal that should not have been included. Obviously, by the time the deal was brought to me to create the documents, it was too late to change the significant, key terms of the deal as it had already been agreed to by both parties.
I know (thanks to Google and Law & Order) everyone thinks they have the ability to be their own private attorney, but be forewarned, most people I see attempting to do so end up with a deal that was not most favorable to them and their interest.
Check out Part 2 of this article on Friday.
For more information on the Top 7 Steps to Grow Your Business to Multiple Six-Figures and Beyond, Click Here.
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