Posted on September 27, 2008 by Vera Raposo

One of the first steps when starting a business, beyond researching and creating your business idea, is to find the money to launch it.  This process can feel overwhelming however, the key is a little preparation and a bit of out of the box thinking.  Here are three ways to raise start-up-capital.

1. Friends and family can be a great way to raise start-up capital however before you pick up the phone, it’s important to approach them in a highly professional manner.  That means creating a comprehensive business plan.  Depending on how much start up capital you need, you can approach friends and family in two ways, either as an investor or as a loan.  An investor means they’ll receive a percentage of your profits, it you’re asking for a loan then you’ll pay them back the capital perhaps with interest.

The terms are up to you to decide with your friends and family however you have a better chance of receiving money if you draft a proposal in advance and present them with a well thought out business plan so they can see that you’re serious about your business and poised to succeed.

2. Sell your stuff. Having a massive garage sale, eBay auction page, or taking your belongings to the local consignment store is a great way to raise capital.  You’d probably be surprised how much you have laying around that you don’t need or use which someone else would be happy to pay for.  A bookshelf of books collecting dust can bring anywhere from $5/$10 per book, exercise equipment in the basement can bring in hundreds of dollars and those clothing items you just don’t wear anymore may be perfect for someone else.

A garage sale is the most profitable because you don’t have to pay eBay fees or consignment fees however, you may be able to demand more money with eBay and consignment stores.  Do a quick inventory of your belongings and see if there’s any money to be made.  You may be sitting on your start up capital and not even know it!

3. Finally, if you have good credit you can consider getting a personal loan from your bank or depending on your idea you can approach venture capitalists for funding.  Venture capitalists tend to invest in technology related businesses.  If you’re approaching your bank for a personal loan, you’ll want to create a plan to pay the money back before you apply for the loan.

If you’re approaching a venture capitalist, you’ll want to prepare a comprehensive business plan and be willing to share a portion of the profits in exchange for the capital.

Where there’s a will there’s a way.  If you don’t have the start-up capital in your pocket, there are many ways to raise it, from taking out a loan to selling your stuff.  Believe in yourself and your idea and nothing can stop you.

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