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Ways to Raise Money for
Starting your own Business
The task of raising money for a business is not as
difficult as most people seem to think.
This is especially true when you have an idea that
can make you and your backers rich.
Actually, there's more money available for new
business ventures than there are good business ideas.
A very important rule of the game to learn:
Anytime you want to raise money, your first move should be to put together a
proper prospectus.
This prospectus should include a resume of your
background, your education, training, experience and any other personal
qualities that might be counted as an asset to your potential success.
It's also a good idea to list the various loans
which you've had in the past, what they were for, and your history in paying
them off.
You'll have to explain in detail how the money you
want is going to be used.
If it's for an existing business, you'll need a
profit and loss record for at least the proceeding six months, and a plan
showing how this additional money will produce greater profits.
If it's a new business, you'll have to show your
proposed business plan, your marketing research and projected costs, as well as
anticipated income figures, with a summary for each year, over at least a three
year period.
It will be advantageous to you to base your cost
estimates high, and your income projections on minimal returns. This will
enable you to "ride through" those extreme "up and downs" inherent in any
start-up business.
You should also describe what makes your business
unique - how it differs from your competition, and the opportunities for
expansion or secondary products.
This prospectus will have to state precisely what
you're offering the investor in return for the use of his money.
He'll want to know the percentage of interest
you're willing to pay, and whether that will be paid monthly, quarterly, or on
an annual basis.
Are you offering a certain percentage of the
profits? A percentage of the business? A seat on your board of directors?
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