Financing a start-up

Financing a start-up is tough these days. It's tough any days but these are particularly challenging. That doesn't mean it can't be done but it's harder.

In many ways the market is doing you a favor by being daunting. It makes you work harder and be better than you would have to be if you could get money just getting out of bed in the morning. Things coming too easy is often a curse described as a gift.

There are two sources of money: you and somebody else. The best source of funds is you. Maybe you have savings or an inheritance or an asset you can liquidate. Frances Lear funded Lear's, a woman's magazine, with money from a divorce settlement.

Many people don't have a lot of money of their own so they must seek it from other sources. Best of these is friends or family. This is not without risk, I think I have blogged about this before.

Sometimes you can find a partner who's willing to underwrite your venture. Be wary of this, but this can be a good source.

The worst thing to do is borrow money from a credit card company. Do not do this unless you have to. And if you do, borrow as little as possible and on the best terms you can. And get your credit score up there so you can prove to potential partners you're a worthy person to do business with. The last thing you want to do is start out in business with a big bunch of debt. It's like trying to row a boat with an anchor dragging out behind.

If you have to borrow money to start a business, consider not starting the business.

Entrepreneurship is the life's blood of all my professional activities. It makes them go. And go read my mystery for free at wwww.kearneymusicschoolmurders.blogspot.com or buy it from Amazon.com more cheaply than you can print it out.