How can I obtain startup money?
Opinions expressed by Entrepreneur contributors are their own.That’s a pretty open-ended question, but to help guide you, I'd turn back around and ask you if you already have a business plan for your product or service?
If so, great. Investors not only look for great ideas but also great people and strong management teams.
If you're a solo entrepreneur, your plan will cover your background and experience, as well as your vision for your company, your key customer targets and sales projections.
If you don't have a plan--why not?
Is your idea something you think will sell, or is it something people actually want to buy?
Have you tested your idea or product in your target market?
If you are having trouble answering these questions, you'll need to focus and work to get your answers together, because they are what potential investors will want to know before funding anything.
That said, in this economy, a lot of potential investors are staying on the sidelines looking for good opportunities, so it's the best time in a long time to reach out to them.
It's also a good time to approach friends, family, colleagues and others in your network for resources, because they may also be looking for an investment opportunity and might be interested in a good investment if your business plan and business model is sound--and if they believe they can get a better rate of return on a risky new business venture then they could in the current market.
Be aware, however, friends and family will be asking those same tough questions about your idea, your resources and your sales projections. Also remember in most cases they will be even more unforgiving than truly "outside" investors if something goes wrong or if the business fails.
If you've already got a good idea and a sound plan but you've exhausted your personal options, there are still a number of ways to find the capital you need. The simplest way is by simply starting small and bootstrap your way to cash flow and profitability.
You can do this a number of ways starting out, including requiring deposits for pre-orders or setting customers up on a paid up-front basis, with delivery in 15 to 45 days, depending on your product or service.
Just make sure you actually deliver, as many a well-meaning entrepreneur has faced the negative consequences in terms of reputation and legalities by failing to deliver on paid-in-advance products and services.
In the end, there are a lot of creative ways to fund your start-up enterprise. You just need to be open to asking others what those strategies could be, and be aggressive in making them work for you.