Most new businesses are going to need some money to start up. And while you may be able to self-finance if your costs are minimal, most startups need to look elsewhere for financing, whether it’s a public lender such as Jefferson County Local Development Corporation or a commercial bank lender.
Your business plan will show the lender that you have made a great case for the loan through your research, management skills, understanding of your target market, personnel needs and so on. Then you come to your financial projections. This is where your small business advisor can help you put together a conservative and realistic picture of how your business will achieve its revenue goals to cover inventory purchases, business expenses and loan repayment, with enough left over to provide you with a personal income.
When we SBDC advisors sit down with clients to help them with the process, myth and reality often collide. Here are five of the most common myths that we hear in our office:
1) Grants — This is probably the number one question we get. “Where do I find a grant?” And then: “Because my uncle Bob’s second cousin’s best friend got a grant to start his business.”
While it may be true, we will need more specific details about the source of that grant, because in general, grants are not available to for-profit businesses unless it’s for something very specific (such as façade improvement). [Read more...]