1. Money

Start and Finance a Business


One of the factors that often stop entrepreneurs from starting a business is money. That doesn't have to be the case. When you open a small business, there are many factors to consider. Your business plan and your grasp of your financial situation will determine whether you can get the financing you need for your business. Do you want to take on investors or do you want to rely on financing from bank loans and family and friends? There are many issues to consider.
  1. How to Open up Your Business
  2. Starting a Small Business in a Recession
  3. Choosing a Credit Card Processor for your Business
  4. Setting up your Accounting and Bookkeeping Systems
  5. Find Start-up Money for Your Business
  1. Business Loans
  2. Other Types of Debt Financing
  3. Interest Rates on Business Loans and Debt Financing
  4. Financial and Business Ethics
  5. Equity (Investor) Financing for your Business

How to Open up Your Business

Many people have the dream of opening up their own business. When they actually start to think about it in real terms, particularly the money part, it seems overwhelming. That's why I and bizfinance.about.com are here. We want to make the business of opening a business less overwhelming by providing you with a framework for doing it. You will find articles and resources on almost every facet of business finance that is relevant to opening your business. We hope this helps you on your journey to becoming a successful business owner!

Starting a Small Business in a Recession

It may seem contradictory to say that a recession may be a good time to start a small business. However, it's true. There are opportunities available in a recession for small businesses if you take them. There are also businesses that are counter-cyclical that actually flourish in a recessionary environment.

Choosing a Credit Card Processor for your Business

Choosing a credit card processing firm for your business is one of the most important decisions you will make when starting a small business. You may try to go with the bank that you use, but if you are a new startup or a home business, the bank may refuse you. You may have to use an independent sales operator instead. Watch the myriad of fees and transactions costs you will be levied. Offering your customers more payment options is a good thing.

Setting up your Accounting and Bookkeeping Systems

When you open up a small business, one of the first things you have to do is set up your bookkeeping and accounting systems. You cannot go forward until your books are ready to keep track of your financial transactions from both a tax and legal standpoint. It is also important for you to be able to calculate your profit or loss and keep track of your assets, liabilities, and net worth.

Find Start-up Money for Your Business

When you start a business, you can either use debt or equity financing. Debt financing involves loans from family and friends or banks and other financial institutions. Equity financing means taking on investors. Family and friends may want to invest in your business. You can also search out angel investors or use venture capital.

Business Loans

There are many sources from which you can get business loans. The first source you usually think of is commercial banks. That is probably the source most businesses use. There is also the Small Business Administration, other financial institutions like credit unions, and a wide variety of non-traditional sources.

Other Types of Debt Financing

There are many alternative types of debt financing that you can use for your small business. You aren't as limited as you may think. You can use asset-based financing which involves using accounts receivables and inventory to finance your operations. If your business is very small, microfinancing might be for you.

Interest Rates on Business Loans and Debt Financing

Small business owners want to be able to understand how banks and other financial institutions calculate interest rates on their loans. There are terms that are important such as effective interest rates, the prime interest rate, the stated interest rate, and others.

Financial and Business Ethics

The business world, espeically the world of capitalism, cannot operate without a system of financial and business ethics and the absence of fraud. In the decade of the 2000's, in the U.S., there have been too many instances of fraud in the corporate and banking worlds. In the last big scandal, fraud almost brought down both Wall Street and Main Street and caused a recession the likes of which had not been seen since the Great Depression.

Equity (Investor) Financing for your Business

Particularly if your firm is a start-up, you may need to turn to investors to help fund your firm rather than debt financing. In fact, to even start operating, all firms need some form of equity capital, even if it is your own or that of family and friends. Your firm will only be attractive to other investors if you have enough confidence in it to invest in it yourself. There are various types of equity financing you can attempt to use.

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