Initial capital for What initial capital is needed to open a business. Who is contraindicated in start-up capital

Most often business venture is organized for the production of any goods or services and their direct promotion to the market. It is rather difficult to give universal recommendations regarding the amount of funds that will be needed to organize a traditional business. Much here will be determined by the nature of the business and the scope of the proposed activity.

The biggest expenses await the enterprise focused on the production of goods. In this case, the initial capital will be needed for the purchase or lease of production facilities, the purchase of equipment, and the purchase of the first batches of raw materials.

Depending on the intention of the businessman, the starting costs can range from several tens to several hundred thousand dollars.

You can reduce the amount of initial funding if you optimize manufacturing process by eliminating a number of auxiliary operations or transferring them to an outsourcing company for execution. It is not necessary to acquire the necessary equipment; at the first stage, part of it can be rented or leased.

Other types of business

Buying a ready-made enterprise based on the principles of franchising can save an entrepreneur from a lot of organizational worries. A franchise is an agreement that gives the right to use a trademark and a set of exclusive rights to a certain type of product. The franchisor, that is, the copyright holder, provides such enterprises to entrepreneurs in a turnkey condition. Such an organization of the case makes it possible to significantly reduce overhead costs.

If you wish, you can find a franchise on the market worth no more than 10-15 thousand dollars.

To open commercial enterprise, you will need a much less impressive amount. The main costs here will be required for the purchase of the initial batch of goods. After its implementation, the entrepreneur will have working capital, which can also be put into action, gradually expanding it. Practice shows that it takes only a few thousand dollars to organize an enterprise focused on trading in the most popular goods, for example, everyday items.

Even more attractive for a beginner is the opening of an enterprise providing services to the population. These can be, for example, different types counseling: legal, psychological, organizational. Such a business will require a minimum financial injection necessary to cover the cost of renting an office, purchasing office equipment and Supplies. To start in a small service business, there may be enough funds that the state, represented by the Employment Centers, allocates to novice businessmen in the form of a subsidy. To date, the amount of such assistance is almost 60 thousand rubles.

Difficulties with initial capital are a traditional problem for novice businessmen. Actually, in 90% of cases, it is the lack of start-up capital that is the reason why the business is never opened. On the other hand, many business gurus reasonably point out that the problem of "not enough money for business" is not only a problem for beginners. Money is never enough. Any large and successful company will always find a dozen projects that could give excellent results - but there is not enough money.

That is, the reason not to open your own business “I don’t have the funds for this” is nothing more than an excuse. However, you cannot build a business without initial capital. Let's try to find real ways to raise funds.

Ways to get start-up capital

There are not so many of these ways, so every aspiring entrepreneur can at least try to use all these opportunities once or sequentially.

Actually, there are exactly two ways.

Path one - informal financing

Classic formula: 3F: family, friends and fools (family, friends, fools). Roughly speaking, this is a loan from relatives or acquaintances or the involvement of wealthy people with whom you know little (“fools”). "Fools" - because having money, they do not have ideas for their increase or simply do not really need it (well, or mother laziness). Although, mainly the unflattering name is associated with a high risk of financing start-up entrepreneurs, as well as the fact that people who have no business experience cannot objectively evaluate a particular project. And often they really give money to a lost cause.

On the other hand, being a "fool" is not so bad. Often, for a fairly modest investment at the initial stage of business development, such people receive a solid piece of a prosperous company. Everyone knows the story of how the founders of Google offered 10% of their future company to the owner of the garage where they started. However, as already mentioned, the risks are appropriate.

This brief digression into the concept of business fools (sometimes, on the contrary, they are called "business angels") is needed in order for you to understand who you have to work with (since you are reading this article, it is clear that you need money).

This way - "money by acquaintance" has many shortcomings. It captivates with its simplicity, but many businessmen who started this way mention the numerous problems that arose during communication, up to complete disagreements. Important point: it is unlikely that it will be possible to attract significant capital.

Lending in banks, obtaining a loan from special funds

Accordingly, the second way is to knock out money from special organizations. Despite the presence of obvious disadvantages (primarily psychological - it is always easier to turn to friends for help), this option also has significant advantages. These include:

• the conditions for obtaining a loan are quite standard - there is no risk of "overpayment" in the form of a huge piece of the future business, which often has to be given to "fools";
• bank specialists will evaluate your business plan and, possibly, find its weaknesses, which could result in serious financial losses in the future;
• you can attract immediately large funds, which greatly saves time (which is money!).

This one tells how to get financing for your business on favorable, good terms. All of its materials are aimed precisely at facilitating obtaining a loan for a sufficiently long period with a low interest rate. Read other articles for specific tips and tricks!

I wrote that one of the key stages is the search for funding sources. In other words, a novice entrepreneur should know where to get start-up capital to start a business. In today's information, I will consider all possible sources of obtaining start-up capital, I will note their main positive and negative sides.

All these methods can be summarized in just 4 options:

1. Use own start-up capital;
2. Borrow money from friends or relatives;
3. Find an investor or partner;
4. Take a loan from a bank.

These options can be used both separately and in every possible way combined with each other. Now let's take a closer look at each of them.

Starting capital - own funds.

Create start-up capital exclusively from own funds – best option to start a business, which has a number of advantages over other methods:

• No need to think about where to get start-up capital - you already have it;
• You will not have any debts and obligations, which is very important for maintaining a stable financial condition;
• Starting capital is given to you absolutely free of charge, you do not need to pay any interest for it;
• You will not depend on business partners and will be able to make all decisions independently;
• You don't have to share your profits with anyone.

If you do not have enough money to create start-up capital, you can consider selling some property that is not very necessary, of course, so that this is agreed with other family members, it is a deliberate and balanced decision. In addition, you can think about: there are always such options, you just need to deal with them.

If it allows you to start a business with a minimum financial investment, take advantage of this, which will allow you to insure yourself against major losses in case something goes wrong.

If the starting capital is your personal finances, this option can be called ideal. Even despite the fact that there is always a risk of losing your investments: risking your own money is better than risking someone else's, where in case of failure you will also acquire debts that it is not clear how you will have to repay.

Starting capital - loans from friends, acquaintances, relatives or other people.

The second way to get start-up capital for a business is to borrow money from other people. But there are already many additional problems.

First of all, the question of money loans to each other is quite complicated. Loan relationships can completely destroy interpersonal relationships and cause serious conflicts. Therefore, if you decide to get start-up capital on credit from relatives or friends, I advise you to adhere to the following rules:

1. Draw up a formal loan agreement or at least write an IOU that clearly states when and how much you are obligated to repay, as well as all other terms of the transaction. In the future, it will also be possible to keep records of the returned amounts (if the debt is paid in installments) with the signatures of the giving and receiving parties.

2. Borrow money at interest. It is clear that it is more profitable for you to use other people's money “for free”, but put yourself in the place of the person who lends it to you. While you will earn on his money, if he lends you “just like that”, he will lose them: inflation will eat up the amount. Think about how your friend or relative could, instead of lending you money, just take a deposit at the bank and get interest, and such an investment would be much less risky on his part. Therefore, at least compensate him for the loan at least at the level of the deposit rate.

3. Be sure to comply with your return obligations. Strictly adhere to your obligations, as if you borrowed money not from a friend, but from a bank. Payment discipline will characterize you in the eyes of your loved ones, and your future relationships can greatly depend on it.

If you, when thinking about where to get start-up capital for a business, lean towards the option of private loans, then it does not have to be relatives or friends. For example, it may be a friend of a person close to you with whom he will bring you together. But such people will already want a much higher payment for their financial resources than relatives.

In addition, when borrowing money from a stranger, especially if it is someone completely unfamiliar (for example, according to an ad), there is always a risk of contacting criminals, who then “put on the counter”, and very serious problems can arise, up to a threat life and health.

If you decide to borrow start-up capital for a business from other people, then draw up a loan relationship in accordance with all the rules, borrow money at interest (even from relatives) and clearly fulfill your obligations. Beware of loans from complete strangers or dubious people and strive to ensure that the loan relationship does not become a reason for breaking off other relationships with a loved one.

Starting capital from an investor or partner.

The third way to get start-up capital is to find an investor or business partner. Judging by how many people are engaged in such searches, this option is quite popular. There are several key differences between investor or partner relationships and private loan relationships:

1. The lender needs to pay interest, but the investor or partner does not.
2. In the event that your business fails, you will have to repay the loan, but you will not have to return the investment.
3. When borrowing, you will not need to share profits with those who borrowed, and when investing or partnering, you will need to, moreover, for life, and the share that you will give is usually very large.

Relations with an investor or business partner must also be formalized by an agreement, and in this case it will be more difficult, since it should include much more nuances than a loan agreement.

So, if you, thinking about where to get start-up capital for a business, settled on the option of looking for an investor or partner, the second question arises: where to find them? There are several search options to consider here:

1. Among friends and relatives. In the same way that people close and familiar can lend you money, they can also take part in your business as an investor or partner (depending on what suits you and them more).

2. In the Internet. You can search for investors on specialized websites and business forums. Spread across the network information about where you are from, what kind of business you want to open (in short, without disclosing key points), and who you are looking for: investors or partners. For this purpose, you can use the numerous business communities in in social networks: personally, I constantly meet a lot of such ads there.

It should be understood that there is more demand for investments than their offers, so you need to try to make your topic stand out from the others posted there.

3. Business angels. There are so-called investors looking for business that they would want and be able to finance. Business angels have entire communities and associations that are easy to find using the search. It is quite possible that if your business idea is really interesting, you will be able to get start-up capital from a business angel.

Investments can be attracted not only in cash, but also, for example, in property. For example, another businessman can give you his premises to conduct business for a certain share in it. Or it can be a commodity loan, free receipt of goods for sale, and a host of other ways of partnerships without direct financial participation. Be sure to consider these options as well.

As in the case of a loan, you should behave with an investor or partner as honestly as possible (while requiring the same reciprocity from your counterparty), because a reputation damaged even by negligence can seriously damage your future business.

If you are willing to share the profits of a future business with someone else, you might consider partnering or looking for an investor. The advantage of this method of forming start-up capital is that it will not be necessary to pay for it until the business makes a profit, and give it back if the business falls apart.

Loan for start-up capital.

And the last option that I want to consider is to take a loan for start-up capital from a bank. The latter, since it will not be so easy to use it.

First of all, because banks practically do not give loans against start-up capital in the absence of other sources of income for the borrower to repay it. That is, the option “I will earn and cry” will not work here. Any suggest a rather complicated procedure for obtaining.

Therefore, quite often people who want to get start-up capital take all kinds of things, which are much easier to get, but which, at the same time, are much more expensive. The aggregate price of such loans often reaches 100 percent or more per annum, and what business can provide the ability to pay such interest?

The next disadvantage of this method of obtaining start-up capital is the need to pay interest and, most likely, repay the loan itself on a monthly basis, already from the first month of using it, while the business may not even be open yet and, moreover, will not produce a profit.

Further, if we are talking about a large amount, then you will need collateral, for example, personal property. First, it is related to additional costs for the assessment and registration of collateral (mortgage), and secondly, you need to think about what will happen if your business fails and you cannot repay the loan. Lose your apartment? Not an option…

Getting a loan for start-up capital for a business is a rather risky option. I would recommend using it only if you already have an existing source of income that will allow you to repay this loan without hindrance, even if the business you start turns out to be unprofitable. Or you risk getting into and losing the mortgaged property.

Now you know where to get start-up capital for a business. All these options can be considered both separately and in certain combinations. Summarize.

The best and less secure option is to open a business at your own expense. When using loans, you will have to pay them back, and you risk getting into debt if the business does not develop as you expected. At the same time, it is more profitable financial plan borrow money from loved ones than from a bank, but, on the other hand, you risk ruining your personal relationship with them. If you decide to attract a partner or investor to create start-up capital, you will have to further share the profits from the business with him, and relations between partners can also deteriorate, which will entail additional difficulties.

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Any entrepreneur starting his own path knows that there is a whole list of different directions, the opening of which does not involve large investments. However, this path takes a lot of time and effort, and besides, it is unlikely to provide you with a stable solid income. Therefore, you can hardly feel that the effort was worth it. This is especially true with regard to production, as well as stores.

Most entrepreneurs at the initial stage, not only do not have the necessary amount of funds to start production, but they do not even know where they can be obtained. Ways to solve this fundamental point are different and depend on your resourcefulness.

However, there are three, already tested by time and many entrepreneurs, ways to find the necessary capital.

Those who are ready to contribute the necessary financial influence are investment funds. But they can only be interested in a promising business. The requested amount will be issued in relation to the activities and amounts that are specified in the pre-approved business plan.

Such collective investments are twofold. positive moment with this type of project sponsorship, the presence of an experienced person, who is also interested in the development of the activity, is considered.

By attracting professional investors, a businessman can get a balanced assessment of his future business. Plus, experts will help improve the direction of the idea that the entrepreneur proposes, making some adjustments and increasing the effectiveness of the plan.

But in all options there are negative aspects. In such cooperation, among the minuses are the following:

• investment companies will not offer money for a project just like that, you will need to agree on a certain percentage of the proceeds that you will pay them throughout the life of the business. So, having fully returned the capital spent at the initial stage, the businessman will continue to need to feed the “creator”.

The current banking system is not very interested in linking its own activities with novice businessmen. What is the reason for this? This is because such beginners do not have documented evidence of skills and abilities. The only reason they can give the bank is just a desire for easy money. This means that the possibility of "burning out" is quite high.

In this regard, the banker considers such loans only on certain conditions.

Requirements for an entrepreneur who has made a request for a loan:

• First of all, there is a list of items that an individual must comply with:

1. the borrower must be a resident of the country;
2. the entrepreneur must have experience in the field of organizations or in a niche that is closely related to the direction chosen now;
3. no criminal record and any suspicion of fraud;
4. credit history individual must be flawless.

• A borrower who wishes to receive financial support from a bank is required to complete the package of documents requested by this institution.
• A novice businessman can confirm his competence with the help of a detailed business plan.

What areas must be considered in it?

1. the exact amount of funds required to enter the market;
2. phased development of the case;
3. business-related expenses;
4. depreciation;
5. calculations for calculating potential income, as well as identifying opportunities for the future development of the enterprise.

• Since no loan is complete without its security, the bank will never offer finance to the client without collateral.

This means that it will not be possible to obtain the required amount, the amount of which exceeds the average loan, without the procedure for mortgaging property. Its value must necessarily exceed the requested loan by more than twice.

Subsequently, this loan will be subject to a ban. This is done in order to avoid resale by the borrower of the collateral.

*Among the pronounced shortcomings of the loan, one can name an extremely high interest rate. Because of her, such a procedure becomes not a help, but a tedious and long return of borrowed money.

State support

Among the possible sources of obtaining initial capital, state subsidies can be singled out as the most optimal and sparing. Such a provision of the necessary amount of money is made in order to assist unemployed citizens by involving them in their own business.

Thus, being unemployed and having been registered with the employment center for more than a year, it is possible to demand the full amount of state assistance in one payment within a month from the date of filing such a request.

At the same time, it should be borne in mind that this option is valid only if during the year the unemployed were not offered vacancies suitable for their specialization.

Since the amount of money issued by the state does not need to be returned, it can be safely called “easy prey”. So, you can start production at your own expense, without making monthly deductions to the investor or to repay the loan.

But there is also a pitfall here. Typically, such subsidies do not exceed state standard, and this is not more than fifty-nine thousand rubles.

This significantly limits the possibilities of the entrepreneur, narrowing the scope of possible activities. Here one can hardly speak of the implementation of a grandiose plan, but still one should not underestimate this type of investment. After all, there are many famous people who amassed a fortune without having huge amounts of money, but having interesting idea. The main thing is desire and, of course, enthusiasm, only with their help you can achieve heights and success.

Watch also a video clip on where to get start-up capital

Start-up capital for a business is a kind of lifeline that allows an entrepreneur to reach the desired level of development in the shortest possible time. Of course, there are many ways to develop a business from scratch and without investing funds, but their implementation requires a lot of effort, and the scale of such projects will be small. In other words, those who do not spend money on developing and promoting their business always spend their own strength, time and nerves. Moreover, it is very difficult to find a business that does not require any investment at all. Almost always you have to bear at least minimal expenses.

Own funds of start-up capital is an ideal option, which is extremely rare in real life. As a rule, even representatives of big business, all the funds of which are in the circulation of already profitable enterprises.

What can we say about an ordinary person who decided to create his own business. It is great if the bank account of a novice businessman contains the necessary funds in full. And if not? And where, in this case, to take start-up capital or find the missing funds? The answer is simple - look for sources of financing on the side. Next, we bring to your attention the most popular.

Independent accumulation of necessary funds

The most practical way to acquire start-up capital is to accumulate it yourself. Do you want to create your own business? Start small and gradually, as you develop, invest in increasing the scale of your business.

In particular, you can open your first car repair shop in the garage, do manicures at home, take orders for the production of designer souvenirs via the Internet and with prepayment. And as it develops, it will have its own premises, equipped with the necessary technical devices, and opportunities to expand the staff and the list of services provided.

Borrowing the required amount of money

If you don’t want to wait, but you still don’t have enough funds, you can choose the option of using borrowed funds. In particular:

• obtaining an interest-free / perpetual loan from relatives, friends;
• obtaining borrowed funds against receipt with the return of not only the debt, but also the agreed interest;
• investment participation of the lender in the business with the allocation of a share and share distribution of profits in the future;
• getting a bank loan.

Each of these options has its own advantages and disadvantages. For example, a bank loan is not always profitable for a novice businessman. Debt repayment will be monthly, while the business itself may not start generating income immediately. Moreover, banks are generally extremely reluctant to take risks with the issuance of loans for the development of small businesses. And getting such a loan, being in the status of an entrepreneur, is very difficult. It is even more difficult to get a loan without having a permanent place of work and income. In this case, the chances of a loyal attitude of the bank towards the borrower will be almost zero due to too high risks of non-repayment of loan funds.

Making a loan with the issuance of a receipt and obligations to pay interest also has its drawbacks - borrowed funds must be repaid on time, and non-return threatens not only to break personal relations with the creditor, but also to a very real court (and even collection) proceedings.

Attracting investors with equity participation in the project is an attractive and quite safe option. That's just as the business develops, the likelihood that the investor partner wants to get everything will grow in proportion to the enlargement of the scale of the business. And work “for myself and for that guy” eventually begins to strain even the most stress-resistant businessmen. After all, a partner sometimes owes a large part of the profit, while he does not make any efforts and does not “spend” at all, unlike the creator of the business, who once agreed to onerous investment conditions.

Borrowing start-up capital from friends and family is one of the most profitable options for a novice businessman. But it is worth remembering that you will not have a second chance to prove your business viability. Failing to live up to expectations once, the borrower will lose trust forever. And it will be almost impossible to convince someone of 100% implementation of their ideas in the future.

Getting a government subsidy

State subsidies are a real chance to receive funds for the development, creation or support of a business for free use. Most of these subsidies are targeted and primarily focused on supporting entrepreneurs in a particular region or sector of the economy.

Sale of property

Of course, for the sake of starting a business, you should not sell your last home or refuse to use a car in favor of public transport. But you can optimize costs by selling, for example, the second car in the family. Or realizing inherited dacha. In the most extreme case, you can go to the deterioration of living conditions. For example, to exchange an apartment for a smaller one, but with an additional payment in your favor. Thus, you can get start-up capital for business development.

Participation in investment programs, receiving grants, etc.

There are many areas of entrepreneurship in which representatives of large businesses are ready to provide support in the form of start-up capital. In this case, funds, as a rule, are issued free of charge, and their use is limited to targeted spending with the provision of all reporting to investors.

Now you know at least five ways to get start-up capital for development own business. We wish you success!