At any startup event, a couple questions are bound to come up: How can we hire the right people? How can we craft a healthy company culture? But the biggest by far is also the simplest. How do we pay for everything?
At this week’s Tampa Bay Startup Week, powered by Chase for Business, four experienced founders, entrepreneurs and experts formed a panel to answer just that, in a wide-ranging discussion covering investments, seed rounds and crowdfunding.
The panel, titled “Bootstrapping without being Strapped,” included: Albert Lee, President of Tampa Bay BBIC; Sandra Anderson, Vice President of Credit Administration at Sunshine State Economic Development; Charles Long, lead economic development specialist at the U.S. Small Business Administration (SBA); and Sudhir Venmuri, of NIC Infotek. You can check out an entire video of the Tampa Bay Startup Week event below, but here’s a quick look at some of the best tips the panel members had to offer about the fundraising process.
Get Free Business Counseling
Since the U.S. Small Business Administration (SBA) is dedicated to providing a variety of forms of assistance to small businesses, Charles Long’s day job naturally came up. The SBA partner with banks, along with other non-bank lenders and credit unions.
Here’s what he had to say on the ways the SBA can help a startup founder:
“One of the things we’re most known for is guaranteed loans for small businesses. It can be difficult to get a startup loan, so that is one of those key areas that we [provide help] and we have a number of programs to make that happen.”
The first step:
“There is a lot of good free counseling. We have a couple of paid resource partners who can actually help small businesses put their ducks in a row before you approach a bank or approach any kind of lender. The counseling that’s out there is one of the key things that I always tell small business owners that they really should take advantage of before they go looking for actual lending dollars.”
Get a Plan on Paper Before You Begin
Albert Lee spoke on the hardest part of figuring out your startup game plan: The financial aspect.
“Banks look for cash flow. If I’m an investor I’m looking for cash flow, because that cash flow is what’s going to pay me back my investment. It’s also what’s going to allow us to build up equity in the business so that at some point we can roll out of this thing and cash out. Numbers are important and you have to pay attention to that.”
Emphasize the Projections and Marketing
Focusing on the business plan alone isn’t a safe bet, Lee says:
“For me personally, I want to see an emphasis on the marketing plan and I want to see an emphasis on projections. I don’t necessarily have to have a 50-page business plan.”
But Include Plenty of Contingencies
From Sandra Anderson:
“I’m always looking for thoughtful business plans, people who have really taken the time to really understand what they’re getting into and they have contingencies, backups, family.”
Supplement Savings With Credit
Sudhir Venmuri spoke from past experience:
“I worked for ten years, so I had some savings and then I started my business with those savings immediately. When my business closed, that’s when I started taking the help of Chase Bank. Chase has given me a line of credit and then I was able to use that to grow my business and also to feel more secure in the business.”
Track Your Business Progress
How can you figure out what line of credit you’re qualified for? By keeping track of any metrics your business has clocked up until now. Remember, banks and loan programs are interested in the numbers. From Lee:
“People don’t know how much money to ask for. If you do have a track record and you have a pretty good sense of how your business is tracking — how it’s growing — then it makes it a little bit easier for you to come up with an amount that you need. You may only get one shot at the apple.”
Crowdfunding Is One Way To Test The Water
Technology has made funding more available than ever, Lee holds, and one modern-day example is the phenomenon of crowdfunding, notable for allowing entrepreneurs to determine whether their concept can muster a groundswell of attention:
“Crowdfunding is way for you to also find out whether or not people are receptive to your idea. That was something that certainly didn’t exist 10 or 15 or 20 years ago that is available to you now, and if people like your idea they can make a decision as to whether or not they want to invest in it or fund it.”
Still Need More?
Here’s the entire hour-long panel discussion at Tampa Bay Startup Week, complete with a Q&A, from Tech.Co’s Facebook page.
https://www.facebook.com/techcomedia/videos/10154288604796778/
Whether you opt for savings, loans, or crowdfunding, the options and — perhaps more importantly — the counseling services at Tampa Bay are open to all interested small business owners.
Image: Wikimedia
This article is part of a Startup Week content series brought to you by CHASE for BUSINESS. Startup Week is celebration of entrepreneurs in cities around the globe. CHASE for BUSINESS is everything a business needs in one place, from expert advice to valuable products and services. Find business news, stories, insights and expert tips all in one place at Chase.com/forbusiness. Read the rest of our Startup Week series.