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Financing a small business may be easier than you think! Sky's the limit in terms of how to finance your business in the beginning. The key is to choose options that limit your personal exposure yet give you enough capital for all the activities you will be participating in. Financing options that may put you at risk are borrowing from family members, financing through a bank by putting up assets such as your home as collateral, and withdrawing money tax-free from you IRA which puts your retirement at risk.

Options that I like to take are finding venture capitalists and selling your idea to him/her. This option by far takes the most work, but has some of the greatest benefits. You take a limited amount, or none of the financial risk, but in turn don't get all of the financial gain, just a predetermined amount as set forth by you and your investor. These investors have money to spare and are looking for the next big thing, which may be your idea. I say this takes by far the most work because you have to find these individuals and then sell them your idea, and nobody likes to be a salesperson.

Another idea I am fond of is starting small. There are thousands of small businesses that take little or no startup capital, and any profits made can go back into purchasing items that will make your business more efficient. For this strategy to be successful a clear road map must be in action so you know where you are now and where you want to be. Since you'll be starting with little capital it's important to know, for example, what type of small business equipment you will need as your business grows. Many business owners dream of not having to go into work one day, and having his/her employees do all the work necessary to keep the business going. This won't happen if you don't plan on making efficiency improvements because if you expect your employees to struggle like you when you started the business then you'll have an extremely high turnover rate, and unprofessional employees.

A great source of information is the Small Business Administration (SBA), a government small business financing and counseling department whose soul job is to see that people with dreams have the opportunity of achieving them. The SBA is in existence because virtually all new jobs in the U.S. come from small businesses, therefore the SBA is critical in our economy. I won't go into much detail about the SBA because a quick google search will probably bring up 100 million hits or more. The information is out there and free.

I could go into almost infinite detail on anyone of these subjects, but that will have to b postponed unit a later date.

Learn more about this author, Bobby P.
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