Money and your Startup Business

What is the most common reason small business fail? Lack of adequate funding. Money may not buy happiness but it is critical for the success of any business. Cash is king and don't confuse cash with profits. Your income statement may show a healthy profit and your bank account show a deficit.

Say Startup Finance to most entrepreneurs and they immediately think of venture capital. Venture capital isn't appropriate for probably 99% of startups. In 2007, according to PriceWaterhouseCoopers venture capital survey, only 3,914 companies received venture capital in the United States, and the majority of the funding was invested in established companies.

The August issue of Entrepreneur magazine states that $29.4 billion was invested in 2007. Sounds like a lot, but private investors, or angel investors, account for about ten times that investment amount and in quite a few more companies. Angel investors also invest in earlier stages, often when there really isn't a company, just the management team and a business plan.

Since angel investors have no reason to report their investments to the public, it's difficult to estimate exactly what their contribution is. However, the Center for Venture Research at the University of New Hampshire says that angel investors invest 30 times more money than VCs. And while the average investment per company for venture capital is roughly 10 million dollars, angels invest about $75,000 per company per investment according to a study done by Profit Dynamics.

So why do entrepreneurs often focus their capital raising efforts on venture capital firms? Probably the most common reason is that they're easy to find. Most VCs have websites where they not only highlight their previous investments but outline what types of companies they currently are looking to invest in.

Besides venture capital and private investors, there are other sources of capital for startup businesses. Loans, family and friends, and credit cards comprise some of the more easily accessible sources of capital. Many small business people use the equity in their home to fund their business. Or use a portion of their savings or equity investments.

What about Business Startup Grants? According the Small Business Association there are no grants for businesses. What they do offer are SBA backed loans that can be acquired through traditional lending sources. Any grants awarded by the US government are on a competitive basis for specific purposes and usually are related to research.

Private foundations offer grants, but most often the grants are awarded to nonprofit organizations.

Startup Funding is important to the long term success of your business.

Can a person with Poor credit get debt consolidation?

Since debt consolidation features lower interest rates, it naturally relies on the credit score of the individual. It's easy to see why many with poor credit think they will not qualify for a debt consolidation loan of any kind. The thing is, everyone can qualify for a loan, regardless of their credit score, as there is always at least one lender who will loan the money. So if you have poor credit, yes, you can get a debt consolidation loan.

How to Get Debt Consolidation with Poor Credit

Unfortunately, getting debt consolidation with poor credit is not as easy as getting it with good credit, so you're going to have to do a bit of searching around to find debt consolidation loans. You can try looking online for lenders by using Google or any other search engine and typing in terms like “debt consolidation with poor credit” or “debt consolidation poor credit”.

Once you find a few lenders offering debt consolidation for those with poor credit, take some more time to research each of them. Make sure they're legitimate and aren't in trouble with Better Business Bureau or any credit agencies. To do this, simply type in the name of the lender followed by the term “review” and you should find a ton of information.

You should keep in mind that because you have poor credit, you'll usually have a higher interest rate for the debt consolidation; however, it will still be lower than the credit card interest rates themselves, so you'll still end up saving money.

Is debt consolidaiton possible with poor credit?

Is debt consolidation possible with poor credit?

You've dug yourself into quite a hole with several thousand dollars of debt on 5 or 10 different high interest rate credit cards. Your credit score is very poor due to all the debt you've accumulated and the missed payments that have ensued. Given the scenario, you may think that you have a long road ahead of you before you'll get out of debt—and that's definitely true. You might be thinking about debt consolidation and whether or not it's even possible with poor credit. You'll find out about it here.

What is Debt Consolidation?

If you've only heard of debt consolidation, but don't know what exactly it is, it's time to learn. In simple terms, debt consolidation is a technique of paying off debt in which the person who is in debt takes out one large loan to pay off all other loans. The newer, bigger loan is typically a much more secure loan featuring a cheaper interest rate and cheaper monthly payments than the individual loans would have. As a result, hundreds of dollars can be saved every month when using debt consolidation as opposed to paying loans off individually.

Boost your Management Team Part 2

Business Appraisers can tell you how much your business is worth and why. If you're considering refinancing, that business appraisal can help you determine how much debt the company can carry.

If you're considering selling your business the business appraiser can provide a ball park valuation. Of course the buyer will want to conduct their own due diligence and may even hire their own independent business appraiser, that's to be expected. The appraisal you have completed gives you a bench mark to start negotiations.

A Business Plan Consultant can expedite the business planning process. If you're looking for investors a well thought out concise business plan is critical. If you're considering starting a company, a business plan will help you improve your chances for success and avoid making serious mistakes. You may be the only one who reads this plan, although you should have input from a number of other people with business experience. A business plan is an important ingredient to the success of a start-up business.

Using Consultants to provide services you need on an outsourcing basis can be much less expensive in the long run than hiring someone as an employee. The consultant probably will cost more on an hourly basis but you only need their services on a project basis. Consultants can provide programming, technical assistance, and communications expertise, just to name a few areas.

When hiring a consultant, or consulting firm, ask for references and check those references. A good place to start the search for a consulting firm is to ask your attorney and accountant for recommendations.

Boost your Management Team Part 1

A key element to entrepreneurial success is choosing the right people to be part of your management team. In fact, angel investors and venture capitalists both view strength of the management team as the major determining factor in whether they are willing to make an investment in the company. But it is also important for an entrepreneur to have outside advisors he or she can trust and rely on, an accountant being one of these. Even a start-up company with little or no revenues needs to have a good accountant available, as well as an attorney who has experience with young businesses.

Accountants are important members of a company's team. If you're a start-up or small business you may not have the resources to hire an accountant full time. There are software programs that can do most of the data entry but it's still a good idea to hire an accounting firm on a consulting basis to oversee your accounting systems, processing, and tax returns.

Attorneys are just as important, perhaps more so than accountants. An attorney can guide you to select the most appropriate way to set up your business. The best time to retain an attorney is before you need one. It's worth the money to know that if something comes up you have a legal expert who is familiar with your company. Attorneys have valuable contacts with venture capital firms and private investors. They know what is reasonable in a private offering , what isn't, and what must be included.

An attorney can also help you protect your intellectual property, trademarks, trade names and trade secrets. While it may seem expensive to have an experienced attorney on your management team it will avoid problems later.

More tomorrow.