subject: Finding And Providing Capital To New And Established Businesses [print this page] When the business climate turns dark because of economic storm clouds, raising capitol to keep a company going can be hard. Both new and established business are effected. When businesses can't grow, they produce less, which leads to consumers spending less. This crates a downward cycle and weakens the economy even further. It can be hard providing capital to new and established businesses.
Businesses produce a valuable product or service that can be seen in action. Stocks and bonds, mutual funds and other financial products exist mostly on paper. By convincing potential investors of the benefits of putting their money in a business rather than in the volatile markets, you have are already ahead of the game. There are companies that specialize in bringing together investors and business owners in need of financing.
For newer businesses, finding an investor willing to take a chance on you, especially in these less than stellar economic times, can be hard. The better prepared you are, the greater your chances of succeeding. Make sure you have an air tight business plan and be able to prove you are following this plan. You need to show on paper that you are financially sound and ready with a back up plan in case you need one.
The current difficulties for the economy also effect established business seeking capitol. The fist thing you should do is something called Bootstrapping. Look inside your company for areas you can cut that will help you raise the needed capitol. Drop a product that is not performing well, cut costs on hours of operation, etc. Raise as much capitol this way and then look outside for help. As an established company, you might have already made valuable contacts through your customer base and suppliers who might be potential investors. Take advantage of your reputation within the community and solicit funds locally.
There are firms that can help small and large businesses find investors. Funding Store is a company based in the UK that has a list of businesses on their site. Interested capitol venturers can choose which company they wish to invest in. Other Internet resources include social networking sites such as Twitter and Facebook.
Its easy to cling to the past when attempting to survive in these uncertain economic times. This could be a mistake for the business owner. You need to be flexible and willing to take risks on newer, more unique ways of raising money. As the old saying goes, "Nothing worth having ever comes easy.
