I was in a similar boat a few years ago. I pulled together a very detailed and professional business plan, created a LLC and sold member units (shares) to family,friends and neighbors in $5,000 increments to raise the capital to get started.
Even with a professional business plan in hand, traditional financing is almost impossible in the start-up phase.
Be sure that you require anyone looking at your BP to sign a Confidentiality Agreement, even family members.
Also, considering that you will be putting together a BP, remember that one of the most important parts of the financial section are the assumptions. You need to be prepared to explain how you arrived at every one of your numbers and without concise written assumptions, you’ll be left spittin’ and sputterin’ when asked, "How did you arrive at this number?"
Thanks jman and everyone else for your responses… I will continue to work on my business plan so I can present it to some family members who have the means to invest.
I never realized that it’s more about the funding than the idea itself:( Kinda discouraging, but I believe in it and will soldier on…
I really wish I could share more. I’d love to have your feedback.
What’s your idea, I’ll tell you if it’s workable![;)][;)]
Look up angel investors. RJF
Typically, you will not attract investors if all you have is an idea and no money, unless you have friends or family who have some money that they are willing to risk on your behalf. If you’re not in a position to risk your own money, outside investors will not even consider helping you to capitalize your business.
Don’t expect the SBA to help you with 100% financing either. It doesn’t work that way, and don’t believe the guy who sells the books about all the free government money- it doesn’t work that way either.
Even with a good idea, it still takes money to make money. What have you done to determine what it would cost to start-up this new business? Have you done even a preliminary business plan? Do you have anything to back up your assertion that your idea is "a lot better" than Cinnabon or Cold Stone Creamery?
The bottom line is that without your own capital to risk and a solid business plan, outside investors will have no interest in your idea. Your best bet is to have a rich uncle who’s willing to throw some money down a hole. I’m not saying it absolutely can’t be done, but the odds are strongly against you that you’ll ever get your idea off the ground. Chances are you can’t protect your idea or visioned concept, and without any money, you’re up against it. "Good ideas" go unfulfilled all the time.
You should first put your idea down on paper with as much detail as you can possible add, including costs related to it and expected revenues from it.
Next, get a lawyer to draw you up a disclosure document, so that you can discuss your idea with others.
Next, approach a locally-owned existing business about incorporating your idea into their current offerings, with a written understanding of your rights and their rights if the idea actually works.
If you can find someone who will give your idea a try, don’t sit back and wait to see if they can make it successful. Jump in and drive. Don’t be a passenger.
Take copious notes during the process. Take what you learn and convert it into a business plan.
Good luck! You’ve got a difficult, frustrating, and wonderful trip ahead of you.
I have an amazing new business idea for a food novelty similar to a Cinnabon or Cold Stone Creamery, but A LOT better.
The problem is that I need to obtain financing. Unfortunately, I don’t really have any money of my own to contribute or collateral. Is my only option to try and attract investors?
I’ve also contacted my local SBA for advice, but have not heard back. Any advice or additional resources would be much appreciated:)
Woman Entrepreneur: Need Advice
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