How to Get Funding for a Business Idea

Video Transcript

"Hello, my name is Emily Gasner. I'm with Working Solutions, and I'm here to talk about how to obtain funding for your business idea. So, step one, is you need to develop your business idea. I recommend that you pick something that you have business and industry experience, having done in the past. Because it will make it much easier to convince an entity, whether it's a bank, a friend, a family member, an alternative lending source, like a non-profit organization that makes loans, to lend you money if you do have experience, doing the type of business, you want to start. So, planning is one of the most important things that you can do, to be successful in obtaining funding later on. So, step two, is going to be to create a business plan. And you don't need to be a, an MBA graduate, in order to create a business plan. Basically, what you need to do is put in writing, the ideas that you have about your business. These include ideas like, who the competition is, who your target customers are, what type of product or service you'll be selling, and a variety of other things about what your business is going to be doing. So, put it in writing is very important. And there are a number of templates out there on the inter-net that you can access, to easily type in answers into, for example, a word template of what a business plan is. So, for example, I recommend going to score.org. They have a template gallery with a business plan, on the template gallery that you can use for your business plan. Also, I recommend that you reach out to organizations in your community that help entrepreneurs get started and help them with their business planning. All around the country there are a variety of different non-profits that serve entrepreneurs, whether it is a non-profit that provides loans, and so they help people develop business plans. Or, there are organizations called small business development centers, that are generally around the whole country, and they have consultants, that if you put together a draft of your plan, for free, can meet with you and sit down with you and go over your business plan, and how to improve it. So, having a very good business plan will set you up for receiving funding. The third step is to go to, whether it's a friend, family member, bank, there are non-profit organizations that do make loans, of different sizes, as well. Economic development departments in local, your city where you are, also make loans. And approach them and find out, what type of businesses do they fund, what are their loan terms, do you qualify? And, you should definitely know how much money you need, before you actually approach a lender and ask them for funding. So, a lot of times, people ask me, just give me the most amount of money that you can give me, without actually going back and thinking, OK, I need five thousand dollars for my bakery. That means I need ingredients, supplies, equipment, and really have a list of what you would use the loan for. The financial institution or the lender should guide you through the loan process, and let you know how long it will take. And the more information that you have about your business, and you need to have your tax returns ready for the last three years, you need to have your resume prepared. Most importantly, you need to run your personal credit, before you approach a lender. The lender always wants to make sure that you're current on your obligations, and that you can meet any personal obligations that you have, in addition to adding more debt on top of what you already have. With a good loan package, a strong loan package, and a good personal credit score, you'll be much better position to get a loan from a business."