Awards & Engraving

August '18

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86 • A&E THE GUIDE 2018 to fund your business, you need to secure financing. There are two types of financing: debt and equity. Debt financing is borrowing money from a funding source with a promise to repay within a specific time period. Common forms of debt financing are friends and family, lines of credit from a lending institution, and Small Business Administration (SBA) loans. At some point, you may want to seek the advice of a well-qualified advisor from a nearby Small Business Development Center (SBDC; SBDCs provide assistance to small busi- nesses and aspiring entrepreneurs throughout the United States and its territories. They help existing businesses remain competitive in a complex, ever-changing marketplace and are hosted by leading universities and state eco- nomic development agencies and funded in part through a partnership with SBA. SBDC advisors provide aspiring and current small business owners with a variety of free busi- ness consulting and low-cost training services, including business plan development, manu- facturing assistance, financial packaging, and lending assistance. Equity financing is receiving money in exchange for ownership interest in your business. While there is no promise to shareholders for a favorable return on their investment, if the business does not deliver one, investors will turn elsewhere to invest. Equity financing can get more exotic in its sources. Angel investors are private individuals who invest in fledgling compa- nies. Venture capitalists are investors who take an active role in growing your busi- ness. Venture capitalists could enter the picture in any one or more of the different phases of a business's life — at start-up, in development, for expansion, or for growth. However, the ultimate goal of the venture capitalist is to take the business public. Other financing options include: 1. Request a small-business grant. Head ove r t o Gr a n t s . g ov, w h i c h i s a searchable, online directory of more than 1,000 federal grant programs. It might be a long process, but it doesn't cost you any equity. 2. Start a crowdfunding campaign online. Sometimes power is in numbers, and a bunch of small investments can add up to something major. If you think your business might be a fit for something like Kickstarter or Indiegogo, you should read up on 10 of the best-crowdfunded businesses or check out the most popular crowdfunding websites. MAKE IT OFFICIAL BUT DON'T FORGET THE ESSENTIALS Get all of the legal aspects out of the way early. That way, you don't have to worry about someone taking your big idea or suing you for something you never saw coming. A quick checklist of things to shore up might include business structure (LLC, corporation, or a partnership, to name a few); business name and registering it with your state; federal and state tax ID; permits and licenses; a business bank account (per- haps separate from your existing one); and possible trademarks, copyrights, or patents. While some things you can do on your own, it's best to consult with a lawyer when starting out, so you can make sure you've covered everything that you need.

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