A start up or business start up is usually a new business project or undertaking undertaken by an individual entrepreneur with limited experience in business to seek, establish, and validate a viable business model. The term “start up” is also used in a more flexible sense, referring to a venture that is still in its early stages. ” Startup” is a term used in most business plans, due to the fact that the business needs a certain amount of time to reach a level of expertise and/or profitability.
The first step in a small business startup is the creation of a business plan. This consists of a statement of purpose that clearly outlines the financial forecast, objectives, market research, and management strategies needed to create a successful business. There are many templates available online that can be used for this purpose. Many business startups fail because they lack a business plan. Without such a document, new business owners risk embarking on a journey without a map.
For most small businesses, there are several means of receiving capital such as bank loans, venture capitalists, personal savings, and/or credit card lending. While each of these sources may be useful for different types of businesses, most startups find social media loans to be their best option. Social media financing is a relatively new term, but it has gained significant traction within the past few years. As technology advances and new business models emerge, entrepreneurs are finding that social media loans are one of the easiest and most cost effective ways to launch new ventures.
In the past, most new businesses received small business loans from banks and other lending institutions. Typically, such loans required personal credit reports, business plans, and a significant amount of business experience. In most cases, it was necessary to submit collateral, such as real estate, equities, vehicles, and household furnishings. In addition, most banks and lending institutions typically had strict requirements that borrowers pass before they were granted small business start up loans. One popular requirement was the completion of an extensive financial reporting process in order to satisfy the bank’s verification process. As a result, many startups found themselves subjected to multiple audits before being approved for business start up funding.
Today, advances in technology and state programs have resulted in a multitude of new business loan funding options for startups. In most cases, startup funds are provided in the form of seed money from angel investors. These investors typically provide start up capital on a one-time or even multiple-year basis. The most common government grants for startups are available through the Small Business Administration (SBA), which also serve as a resource for financial assistance for low income families, women business owners, and minority business owners. In some instances, the SBA may serve as a co-signer on a business loan.
Private funding options include entities such as third party investors, corporations, and wealthy individual entrepreneurs. Typically, these sources do not lend on a one-time or even recurring basis, although there are some exceptions. Most angel investors and venture capital firms are able to provide start up capital for small business start ups, although it is best to check with your local Small Business Association or SBA office to determine if they can lend to your specific industry or if you would need to consult with them regarding the specifics of your business plan.