There are easy ways, hard ways and impossible ways to finance your business.
Over the next two posts I will cover Credit, Debt, Equity, Grants, and more. I'm gonna give you the "low down, dirty" stuff that nobody else will tell you.
There are only 4 ways to finance your business:
* Credit
* Debt
* Equity
* Government Grants
Today, I'll cover "Credit" and in a few days I'll follow up with the other options.
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Using Credit to Finance Your Business
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This is the most common way to finance a business. The credit route is mostly reserved for startup operations with smallish capital needs.
Just put it on the credit card! After all... It's the American way, right?
Well, it turns out there are smart and not-so-smart ways to finance your business with credit.
The not-so-smart business owner will load up the credit card to build a web site, design a logo, form an LLC, maybe hire a consultant to help with the business plan, and buy the latest whiz-bang marketing course.
Before you know it, he has a really cool website and business cards to show everyone. But since he already spent all his money, there is nothing left for actual marketing - and never any for a "rainy
day"...
Before you know it, he shuts down the operations. His business is DEAD, and he is up to his eyeballs IN DEBT.
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The intelligent business owner only puts money on the credit card when it is "smart money". The smart guy only goes into debt when he knows the money is coming back (hopefully with friends).
Smart guy has done the market research up front and knows his customer. He has a killer USP (unique selling propsition). He has a strategic plan for marketing.
Then, with very small amounts of money, he "tests the waters" with marketing experiments.
When he finds the "secret sauce" - when he can make $2 for every $1 he puts out - THAT is when the money starts going on credit cards.
In a few days, I'll follow up with info on Debt, Equity, and Government Grants.
Looking forward!
Travis