When you first decide that you want to start your own business your edrenaline is pumping and you can’t wait to get going. You are going to become an entrepreneur. You have so many ideas, and then it happens – REALITY settles in. All of a sudden worries begin to form and you don’t know how you are going to be able to manage raising the necessary funds to get started. 

 We are all not made out of money so if you don’t have enough in your savings or investments then you will need to begin looking at a new place to get the necessary funding, because there are many options. It’s just difficult to find the one that will suit your needs.

 Let’s talk about bank loans, this is probably a big waste of space in this article but I need to tell you about them because if I don’t then you might just give up prematurely and that wouldn’t be a good idea. Borrowing the money that you need from the bank is an absolute nightmare, and don’t be surprised if you get turned down. Bank loans are very hard to get for many different reasons – no collateral, not enough business experience, or no assets are just a few of the many reasons that the bank will turn you down.

 Another way to get the money is by using your credit cards to fund your business. There are some good things to this, but there are also bad things. So let’s take a closer look. This is a very risky way to finance your business, many of the credit cards will charge you around 2% to 4% for cash advances. This is how they make their money, and how you lose yours. It’s good because you will get the money that you need, but you will eventually be faced with a large sum of money that you will need to repair. I don’t suggest this method, not for long term financing.

 Venture capital is not for every type of entrepreneurs, this method is limited to companies that are involved in technology. And this type of funding is not very easy to get. You will need a solid business plan, a great management team and let’s not forget that you will need to have a target of a 40% return on their investment. Many new companies are not going to fall into any of these requirements. So this leads me to entrepreneur bootstrapping.

 Entrepreneur bootstrapping is a source of capital that you can use to set up your business. This is actually one of the best ways. What entrepreneur bootstrapping is, is basically skimping out on many things in your business so that you can get your business started with the least amount of money as possible. Trust me I know you want nothing but the best, but it’s not always feasible. Many times in our lives we need to give things up before we can get what we want. And if you want your business bad enough then you will do it. Entrepreneur bootstrapping will involve that you be as frugal as you possibly can be. So forget about hiring that secretary right away, you will be answering your own phones, don’t even think about stocking up that inventory, and definitely forget about purchasing that fancy new computer that you thought you were getting.

 I never said that this method of financing was going to be what you wanted, but sometimes it’s the only way. And it’s not as bad as you may be thinking that it is right now. This is only temporary, when your business begins making money you can throw it right back in and get to the point where you get everything that you wanted to get when you first started.