Effective Ways to Fund or Grow Your Own Business
                     Effective Ways to Fund or Grow Your Own Business
It's a fact: Whether you own a business - or are thinking seriously of starting one -
money to pay for even the most basic activities seems almost always limited. To
most entrepreneurs, sources for their required funding are at best scarce, often
non-existent; that is until they examine their options. What follows is a quick look
at 10 of the most widely available sources of money to fund or grow a new or
existing business:
1. Personal Savings: The emphasis here is on setting money aside in advance to
finance your business. I can think of at least three people who, like smart little
squirrels stashing acorns, regularly put something aside to fund their start-ups. In
one case it took nine years; the others, three. The advantages: Time to fully plan,
and retaining full control of your company.
2. Friends and Family: Yes, you can ask them to loan you money, but loans
require repayment, even if your business fails. A better way is to incorporate your
business and offer those same folks an opportunity to buy shares in your company.
Each will own a small piece of it, but no repayment is required. An attorney should
help with the details.
3. Bank Loans: For most new and small businesses, because they have limited
assets for collateral, such loans require that the entrepreneur personally guarantee
repayment  -  a  fixed  amount  each month  -  regardless  of  what  happens  to  the
business.
4. Line of Credit (LOC): Different from a traditional bank loan, the entrepreneur
can again be held personally liable, but money becomes available on a recurring
basis. Example: A $24,000 LOC repayable at $2,000 a month. At the end of six
months of such repayments, the owner of that LOC can again have access to the
$12,000 he or she already repaid. The LOC's full amount becomes due at the end of
the agreed time period.
5. Crowdfunding: Supporting a variety of new and existing business ventures,
crowdfunding  describes  the  constantly  expanding collective  efforts  of  individuals
who use the Internet to network and pool their money to finance ventures initiated
by others.
6. Business Plan Competitions: Regardless of how hard many entrepreneurs try
to  avoid  creating  a  formal  written  business  plan,  a  number  of  universities  and
business organizations host such competitions. The most promising - and thorough
- business plans are often connected to investors with money.
7. Angel Investors: "Angels" are affluent individuals who typically provide capital
for start-ups, often in exchange for some degree of ownership. A quick search of
the Internet will turn up a growing number of websites providing helpful information
about angel investor groups.
8. SBA Loans: The most effective way to explore their availability is through the
loan officer  of  your local  bank or  credit  union.  But  be aware that  the required
documentation can be cumbersome.
9. Venture Capitalists: Known as VCs, they typically provide large dollar amounts
- a half to several million - for high-tech firms, occasionally start-ups, most often
expansions.  Because  they demand a  higher  rate  of  return,  VCs are  sometimes
referred to as "vulture capitalists."Seed Accelerator Houston is also an option to
fund your business. 
10. Bootstrapping: Often the most common forms of financing, the name derives
from an ancient metaphor about a man freeing himself from a swamp by pulling up
on his own boot straps to lift his feet from the muck. Most often, bootstrapping
involves  working  part-time  on  your  dream  venture  while  employed  full-time
elsewhere so you enjoy a steady income and your employer's benefits.
To explain in detail each of these 10 ways to fund a start-up or grow an existing
business would obviously fill volumes. But there should be enough information here
to whet your appetite, to encourage you to research the sources of funding that are
most appropriate for you and your company.