According to RBC, “Financing is the big question for many people who want to start a business. Good business planning will help your chances of getting financing. Later, your business plan gives you something to measure yourself against, to see how well you have stuck to your plan and exactly where you may need to make changes.”
Connect Legal outlines some key ways to raise money for your business:
- Borrowing money from family and friends
- Taking a loan or using credit from a bank or lender
- Selling a part of your business to an investor
- Making sure that your customers pay on time
Be realistic about financing. RBC suggests trying a number of different scenarios in case things don’t turned out as you planned. This will help you to prepare and to act quickly.
In order to figure out how much money you will need to start your business, RBC breaks down the process into three main parts:
- Part 1: Calculating your start-up costs.
- Part 2: Calculating your cash flow needs — add how much you need to cover shortfalls in your cash flow.
- Part 3: Achieving break-even — subtract your initial investment (money from you, your family or partners). This will give you the dollar amount you need to start your business.
This is intended as general information only and is not to be relied upon as constituting legal or other professional advice.