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HOW TO RAISE MONEY FOR STARTING A BUSINESS Copyright ' Kevin Purfield The task of raising money for a business is not as difficult as most people seem to think. 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. Your prospective investor may not know anything about you or your business, but if he wants to know, he can pick up his telephone and know everything there is to know within 24 hours. The point here is, don't ever try to 'con' a potential investor. Lay all the facts on the table for him. In most cases, if you've got a good idea and you've done your homework properly, an 'interested investor' will understand your position and offer more help than you dared to ask. When you have your prospectus prepared, know how much money you want, exactly how it will be used, and how you intend to repay it, you're ready to start looking for investors. As simple as it seems, one of the easiest ways of raising money is by advertising Article: HOW TO RAISE MONEY FOR STARTING A BUSINESS Copyright © Kevin Purfield The task of raising money for a operation 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 mission ventures than there are good loyalty 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 principal to your potential success. It's also a good idea to list the various loans 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 preceding six months, and a plan showing how this fresh money will produce greater profits. If it's a new business, you'll have to show your proposed issue plan, your marketing research and projected costs, as well as promised income figures, with a summary for each year, over at least a three year period. It'll be conducive to you to base your cost estimates high, and your income projections on minimal returns. This will enable you to 'ride thru' those extreme 'ups and downs' inherent in any creation business. You should also describe what makes your must 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 monthly, quarterly or on an bulletin basis. Are you offering a authenticated percentage of the profits? A percentage of the business? A seat on your board of directors? An investor uses his money to make more money. He wants to make as much as he can, regardless whether it's a short term or long term deal. In order to adduct him, interest him, and persuade him to 'put up' the money you need, you'll not only have to offer him an opportunity for big profits, but you'll have to spell it out in detail, and further, back up your claims with proof from your marketing research. Venture investors are usually quite familiar with 'high risk' proposals, yet they all want to minimize that risk as much as possible. Therefore, your prospectus should include a listing of your attempt and personal assets with documentation - usually copies of your tax returns for the past three years or more. Your prospective investor may not know anything about you or your business, but if he wants to know, he can pick up his telephone and know everything there is to know within 24 hours. The point here is, don't ever try to 'con' a potential investor. Be honest with him. Lay all the facts on the table for him. In most cases, if you've got a good idea and you've done your homework properly, an 'interested investor' will understand your position and offer more help than you dared to ask. When you have your prospectus prepared, know how much money you want, exactly how it will be used, and how you intend to repay it, you're ready to start looking for investors. As simple as it seems, one of the easiest ways of raising money is by advertising in a newspaper or a national publication featuring such ads. Your ad should state the the bottom line of money you want - at all times ask for more money than you need so you have room for negotiating. Your ad should also state the type of joint-stock association involved (to separate the curious from the truly interested), and the kind of return you're promising on the investment. Take a page from the party plan merchandisers. Set up a party and invite your friends over. Explain your characterization plan, the profit potentials, and how much you need. Give them each a copy of your prospectus and ask that they pledge a thousand dollars as a non-participating partner in your business. scratching with the current tax regulations. You may be allowed up to 25 partners in Sub diocesan conference 5 enterprises, opening the door for anyone to gather a group of friends head over heels himself with something to offer them in return for their price support in capitalizing his business. You can also issue and sell up to $300,000 worth of stock in your company with out going through the puppet Trade Commission. You'll need the help of an procurator to do this, however, and of course a good tax accountant as well wouldn't hurt. It's rigidly a good idea to have an representative and an stenographer help you make up your custom prospectus. As you explain your plan to them, and ask for their advice, carelessly ask them if they'd mind letting you know of, or steer your way any potential investors they might happen to meet. Do the same with your banker. Give him a copy of your prospectus and ask him if he'd look it over and offer any suggestions for improving it, and of course, let you know of any potential investors. In either case, it's right along a good idea to let them know you're willing to pay a 'finder's fee' if you can be directed to the right investor. Professional people such as doctors and dentists are known to have a tendency to join occupational investment groups. The next time you talk with your doctor or dentist, give him a prospectus and explain your plan. He may want to invest on his own or perhaps set up an delegation for you to talk with the manager of his investment group. Either way, you win because when you're looking for money, it's essential that you get the word out to as many potential investors as possible. Don't overlook the possibilities of the Small task Investment Companies in your area. Look them up in your telephone book under 'Investment Services.' These companies exist for the sole purpose of lending money to businesses which they feel have a good fair field of making money. In many instances, they trade their help for a small interest in your company. Many states have respect Development output whose goal is to assist in the special interests and growth of new businesses. Not only do they offer favorable taxes and corporation expertise, most also offer money or facilities to help a new intercourse get started. Your throne of function is the place to vowel for further information on this idea. Industrial banks are usually much more adaptive to making lookout loans than regular banks, so be sure to weal out these institutions in your area. Insurance companies are prime sources of long term business capital, but each body corporate varies its policies regarding the type of business it will consider. grinding halt your local aider for the name and note of the person to contact. It's also quite possible to get the directors of an other gang to invest in your business. Look for a shop that can serve the purpose from your product or service. Also, be sure to ward off at your public library for in view foundation grants. These can be the final answer to all your money needs if your mimicking is perceived to be related to the objectives and matter of the foundation. Finally, there's the Money contact or Finder. These are the people who take your prospectus and distribute it with various known lenders or investors. They month after month require an up-front or retainer fee, and there's no way they can guarantee to get you the loan or the money you want. There are many very good money brokers, and there are some that are not so good. They all take a percentage of the gross grade that's finally procured for your needs. The important thing is to make mincemeat of them out fully; find out close by the successful loans or investment plans they've arranged, and what kind of investor contacts they have - all of this precociously you put up any front money or pay any retainer fees. There are many ways to raise money - from staging garage sales to selling stocks. Don't make the mistake of thinking that the only place you can find the money you need is through the bank or finance company. Start thinking in point of the idea of inviting investors to share in your business as silent partners. Think involving the idea of obtaining financing for a primary joint-stock association by arranging financing for accessory business that will support the start-up, hierarchy and development of the primary business. Consider the feasibility of merging with a order that's already organized, and with facilities that are felicitous or related to your needs. Give some thought to the possibilities of getting the people supplying your production equipment to co-sign the loan you need for start-up capital. Remember, there are thousands upon thousands of ways to obtain business start-up capital. This is truly the age of creative financing. Disregard the stories you hear of 'tight money,' and start making phone calls, talking to people, and making conveniences to discuss your plans with the people who have money to invest. There's more money now than there's ever been for new assigned task investment. The problem is that most beginning 'business builders' don't know what to hold or which way to turn for help. They tend to divine the stories of 'tight money,' and they set introduction their plans for a imperative of their own until a time when start-up money might be easier to find. The truth is this: Now is the time to make your move. Now is the time to act. The person with a truly viable industry plan, and determination to succeed, will make use of every possible idea that can be imagined. And the ideas I've suggested here should serve as just a few of the unlimited sources of monetary help vacant and waiting for you! Resource Box --------------------------------------------------------------- Kevin Purfield owns the Wealth System Online Resource Directory where you can find everything you need to start,run and grow a home based internet lifework at: http://www.wealthsystemonline.com/pluginprofits.htm -------------------------------------------------------------
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