Ask Tamara: I Have a Great Idea, but No Money
I have a great invention idea but a serious lack of funds. What do you suggest?
- Susan from Cleveland, OH
So many of the successful businesswomen I know started out with little or no money, so if you believe strongly in your invention -- and you've done your homework to ensure there's a market for it -- then you need to take a risk and find the money. The key is getting creative.
So where should you start? There are many ways to find the money you need. First, evaluate the income and expenses you already have, and figure out if you can cut corners elsewhere to fund your business. Can you spare this year's vacation? Cut the daily coffee run? Also, you may not want to give up your day job just yet -- if you can work at your business during your off hours and still collect a paycheck, there won't be as much financial pressure.
The next thing you'll need to consider is getting a loan. Fortunately, there are many ways you can do this -- and some are smarter than others. Before putting all your expenses on a high-interest credit card, for instance, you should explore some lower-interest options. Even a home equity loan will cost you less in the long run than funding by credit card, and there are also special loans available to women business owners. Innovative Bank make SOHO (small business/home office) loans. And although they can be difficult to find and burdensome to apply for, you may also be eligible for a government grant.
A bank loan is another option, though sometimes challenging to find, especially in this current economic climate. Finally, you can also pursue outside investors in a number of ways: putting your pride aside and asking friends and family, or pursuing other angel or venture capital investors once you've demonstrated some success. Of course, keep in mind that with other people's money comes other peoples' opinions and decision-making input; if you take a loan from someone, be sure all parties involved know their roles in advance. Virgin Money is also an interesting site that can help you manage your loans from friends and family.
If you really want the money, it's out there. It's just a matter of finding it and taking that risk. There will be scary moments and it always takes longer than anticipated, but if you believe in your product and make the right decisions, the risk will be worthwhile. Good luck!
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