Before you approach a lender for financing to start a new business, it is important to consider some very basic questions. While there will be many different questions that vary based on the type of business as well as your personal situation, these three questions will likely be necessary considerations for any business.
Do You Know Your Audience?
Do you know who you are targeting? You will be asked the question, so it is best to figure it out and nail it down now. Do not make it too narrow or too broad. If it is either one, explore ways to widen or narrow your focus as is relevant. For example, if you are targeting kids ages 15 to 19, maybe you can find a way to appeal to younger teens and young adults in their early to mid-twenties as well. If you are sure your product or service will appeal to adults, consider the income brackets that your target group may belong to. You do not have to appeal only to these groups, but knowing the groups your product generally appeals to can help.
Do you have one? Have you even considered it? Most financing options will require it. If you do not have it yourself, do you have someone that may be willing to invest? Can you borrow part of the funds necessary from a 401k? Maybe you can sell some property to show you are personally invested and willing to take a risk for the business.
Have You Considered the Legal Issues?
A skate park and snack bar for teens may sound like a spectacular idea, but there are all kinds of legal issues that can come with that. It could still be a successful business, but you need to consider all insurance and other legal issues. Doing this before approaching a lender will be a huge plus to you.
Once you have taken these and other necessary issues based on the specific business idea under consideration, go find a lender. Biz2Credit is a great place to start. Our network of over 1,300 lenders offers everything from commercial real estate loans to start up unsecured business loans. Visit Biz2Credit today to get started.