Starting a new business or expanding an existing one can be exciting. With the economy starting to show clearer signs of recovery, the inspiration to launch an endeavor may be on the minds of a lot of entrepreneurial types in North Carolina.
There is no way to guarantee a business will succeed, but there are steps that can be taken to make sure that the prospect of success is increased. First, you have to decide whether you have what it takes to be a business owner. Do you have a viable business plan? Another crucial piece, of course, is financing. That is what we want to examine with this post.
In an ideal world, a business would generate such a level of cash flow that the income always outpaces costs. That doesn’t always happen. And if you’re just starting out, there’s no cash flow to count on. Financing is required. So what do you need to consider? Many small business experts would agree that basic determinations depend on getting answers to questions such as:
- How much money will be needed? Costs you need to cover could include production and fulfillment, technology expenses, administrative needs, employee wages, benefits and professional services for business compliance matters.
- What financing sources are available? Do you have personal money to invest? Will you need to turn to outside sources? If the latter, what should they be? Many options exist, from banks to crowd sourcing. The general rule of thumb offered by many experts is start close to home. Taking out a consumer loan, rather than a commercial loan, may be easiest.
- What’s your track record? If you have an existing history of success or a high personal credit rating, that could work to your advantage in securing financing.
- What’s your control-level tolerance? If you aren’t a lone wolf, it may be possible to finance through selling part ownership in your business to others. But if you go this route, you will want to be sure that you create the necessary contracts and comply with all the legal filings that government requires.
The allure of being your own boss can be great, but owning a business can be a financial and emotional challenge. To be sure you’re ready, seek and find good counsel, including that available from an experienced attorney.