The past 30-some years has seen a tremendous resurgence of entrepreneurial activity around the world.
Witness just in the past couple of years, the first National Entrepreneurship Week launched in the U.S., which spurred on the start three years ago of Global Entrepreneurship Week held during the third week of November engaged by more than 65 nations.
The notion behind this was the idea that entrepreneurs can be aggressive catalysts for change in the world of business ventures; individuals who recognize opportunities where others see chaos, contradiction or even confusion.
The economies of many other countries have been revitalized because of the efforts of entrepreneurs who are charting free enterprise as the model for economic reform and development.
As we are now well into 2016, I want to offer some detailed thought about what actually is presented to us by the power of entrepreneurial leadership in our society.
Wouldn’t you love to have a bag of dollars fall into your lap to launch your first entrepreneurial venture? Me too.
With a great analyzed idea and a phenomenal business plan, you probably feel entitled to receive the funding you’re requiring to move to that next step.
But reality sets in for most entrepreneurs, challenged to prove the merit of their entrepreneurial concept before investors will put up the bundle of cash to help finance it.
For years, I have heard the treatise that poor management is most frequently the reason businesses fail.
That may be the case, but let me also say coming in a close second is inadequate or ill-timed financing.
So when exploring your funding options, there are a few questions to think about:
• Are your needs short or long-term?
• How quickly will you be able to repay a loan or return on someone’s investment in your idea?
• Is the money you seek for operating or capital expenditures that may become assets, such as equipment or real estate?
• Do you need the money now or in smaller portions over a defined time period?
• Are you willing to assume all the risk if your company doesn’t succeed and do you understand related implications, or do you want someone to share the risk with you?
The answers to these questions will help you prioritize your funding options.
There are two types of financing available for your entrepreneurial venture launch.
Debt financing is where you borrow money and agree to pay it back in a predetermined timeframe at a set interest rate.
You owe the money whether your venture succeeds or not.
And there is equity financing where you sell partial ownership in your venture in exchange for cash.
Your investor/s then assume part of the investment risk with you—if the venture idea fails, they lose their money; if it succeeds, the investors typically make much greater return on their investment than prevailing interest rates.
Hence, this option is a far more expensive route to go.
So where to look for outside financial help options, consider these possibilities—friends and family, credit cards, bank loans, leasing, angel investors and private lending.
So put together a great business plan with a thorough analysis of your idea, talk to a financial adviser or entrepreneur coach and then just start asking.
Someone will eventually and hopefully, say, “Yes, I would like to invest in your idea.”
Also please note, our Okanagan Valley Entrepreneurs Society/Canada Youth Business Foundation Entrepreneurship Loan Program (ideal for young entrepreneurs between 18 and 34); Business Development Bank of Canada ; B.C. Women’s Enterprise Centre of B.C. (headquartered in Kelowna), and one of our society sponsors Scotiabank all have great small business lending programs as well.