Four Sources to Properly Fund Your business

Proper business funding/capitalization are an issue to all small businesses at all stages of the business cycle. Those businesses that are organized as corporations and LLC’s are required by the state granting the business charter to be adequately capitalized check out this site . The challenge here is there is really no clear definition of adequate capitalization.

The purpose of requiring adequate capitalization is to ensure that the business entity has the ability to carry out its business operations without subjecting those working with that business, including employees, to financial loss. Proper protection against financial loss also requires a business to address potential liability issues.

Funding requirements will differ significantly from one business to another as well as what stage in the business cycle the business occupies. One of the most difficult stages to fund is typically found with start-up small business ventures. New business ventures may have great ideas and potential for success but have no history of success nor have they produced financial results. These realities make securing funding difficult. Funding challenges, however real, do not relieve the business owner from the responsibility of providing adequate capitalization for their business enterprise.

There are many sources of funding available in the market place for small businesses and LLC’s, each with unique advantages and disadvantages. The best source for funding will depend on the particular circumstances of the business seeking the funding and may include using a combination of several different sources. Start-up funding in particular is a very specialized world and seeking experienced and competent help is strongly advised. The risk involved with hiring an employee is well understood, making pre-employment background checks a routine practice for most companies. Business background checks however, are far less commonplace; but why? Excluding small daily purchases and transactions with historically reputable companies, the level of trust you (or your company) extend to a corporation you chose to deal with can be extraordinary. Yet conducting background research on companies is rare in comparison with screening individuals.

Business background checks are complex because businesses play by a different set of rules. Realistically, you and I cannot drop our identity and start over when things go bad, our debts become too great, or our reputations become tarnished. Corporations can and often do. Along with completely dissolving a business or filing for bankruptcy, corporations may operate under alternative names known as “DBA’s” (Doing Business As), appear as local companies online, but physically exist overseas, or be registered as foreign corporations while soliciting business within your state. Proper screening requires a broad and extensive expertise. Fewer companies offer business screening for these reasons. As always, watch out for companies online claiming to instantly tell you everything about a company for a small fee along with a subscription to their database. There is no one size fits all method of conducting business background research and thorough results can and will not be instant. Americans are known for their innovation and celebration of freedom. We now have the White House calling urgently for more innovation in small businesses. Are we so behind the global competition that we need our government to remind us that we must keep up? Or are we entrepreneurs simply not getting the equitable compensation from the risk we took in business? Are there so many frustrated entrepreneurs that their children are discouraged and have no ambition in being entrepreneurs as well?

So are you ready to change your business approach so our future generation not only can compete globally but also continue to create and enjoy wealth? Are you serious about being equitably compensated for the amount of risk you took in your business? Well, in that case, you must start thinking about how to become a business Architect.

Your business is a vehicle to create wealth, not just for you, but also for your family, employees, partners, stakeholders and society. Yes, I know you’re passionate about what you do and fulfilling your dream. But if you want to focus on wealth creation, I challenge you to work toward being a Business Architect. My friend Ginger was unable to make this leap, and the results were less than desirable.

Ginger was tired of working for corporate America. At the top of the corporate ladder, she quit her job and pursued her dream of becoming an author. Like many start-up entrepreneurs, Ginger focused on how to get her product in order to start selling the product. The learning curve was formidable, first coming out of her corporate career, which was nothing like writing a book, then producing and selling it. After putting in much of her own hard earned savings, she finally got her book published.

She then decided to use what she had learned to focus on not only selling her book, but others’ books as well. She began a self-publishing service locally and within a few years, she had some success and a few authors and their books under her belt. But during the deep financial crisis in late 2008, Ginger’s company was not immune to the crunch and it took a hard hit. She watched her own personal savings evaporate and revenue decline. They could not stay in business. In early 2009, she decided to close the doors and get a job. I’ve heard many stories like this one, but it never stops being hard to see a business colleague forced to take a different turn.

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