There are two general ways to get money to start a new business:

1. Borrow it.
2. The sale of equity in the new business, thus giving up part of the ownership.

Of the two, borrowing the money is often the most practical for a small business with no proven track record.

Funding a small start-up company with no collateral or fixed assets upon which to borrow will best be accomplished by option two; the sale of exchange of the equity.

The most common sources of funds for starting a business from scratch are listed here in approximate order of usage:

• Cash, bank accounts, stocks, bonds, CDs, and other highly liquid investments
• Home equity
• Business/asset sales
• Friends and family
• IRAs, 401Ks and other retirement accounts
• Bank loans

Here are three other strategies for getting support to start your new business:

1. Angels

Angels are individual investors who back a new company before venture capitalists or banks will consider it. You will need an angel who shares your passion for your product or service. Analyze the feedback from each angel or venture capitalist that sees and rejects your proposal. Find out what they dont like is it a bad business, a bad technology or a bad presentation?

2. Professional Networking

The quality of your relationship with your prospective customers and financial backers will determine the potential of your business enterprise. Follow these steps to maximize the value of your networking:

1. Be prepared: pay attention to how you dress.
    

2. Presentation: be cautious not to overwhelm your prospects with details and too much info.
    

3. Build relationships: set up an informal meeting to get to know your prospects better and to find out how you can help each other.

3. Get Professional Help

Almost all small businesses require the assistance of an accountant, attorney, banker, and insurance agent at one time or another. Finding good professional help should be one of the very first steps you take to start your new business. Which professionals do you need? Heres a quick look:

• Accountant sets up your books, prepares your taxes, provides you with tax advice related to the operation of your business.
   

• Attorney helps you choose the right form of business, makes sure the proper papers are filed, drafts and interprets contracts and leases, defends you if legal action is brought against your business, represents you if you bring legal action against someone else, provides you with legal advice related to the operation of your business.
   

• Banker helps you get financing, helps you establish credit card accounts, works, in many cases, as your silent partner, providing you with business operation advice.
   

• Insurance agent evaluates your insurance needs, provides you with advice on which types of coverage you need.
   

• Management and marketing consultant provides basic business operation advice, provides pricing and inventory advice, and provides sales and advertising advice.
   

• http://www.TheMoneyExpert.com provides substantial free strategy and support for beginning to advanced business owners. They also provide live support for active members of their elite membership program.

For more information and additional money strategy visit: http://www.TheMoneyExpert.com and pick up a FREE subscription to FREE MONEY TIPS, The Worlds Leading Money Strategy Newsletter.

-Jim Guarino, CEO of http://www.TheMoneyExpert.com

2006 American Financial Education Network / http://www.TheMoneyExpert.com