Released June 9, 2008
STILLWATER, Okla. – When starting a new business, one of the biggest concerns for a prospective business owner is finding enough money to get the business on its feet and headed in the right direction.
Many of these owners look for grants, only to be disappointed to find out that there are no programs available that offer “free money.” This often becomes the reason for the prospective owner to give up on his or her dream.
Glenn Muske, Oklahoma State University Cooperative Extension Service interim associate dean, assistant director family and consumer sciences., said that owners should not give up and that many small business owners open their business with little or no outside funding.
According to the U.S. Small Business Administration, on the average, the solo small business owner needs only $6,000 to start his or her new business. More than one-half of business owners indicated that their start-up needs were less than $5,000 with the most commonly estimated amount being only $2,000.
“Having a well-thought-out business plan will help you find out how much money you need and where you can get that money,” Muske said. “Prospective business owners must recognize that he or she will need to put the first dollars into the business. Those funds may come from savings, from a spouse working another job, a home-equity loan or some other source of funding. Another common source is a loan from family and friends. This type of support, while common, should be done as any other loan with written documentation and a clear understanding of when it will be paid back. ”
Another resource for the owner is a small loan. This requires the owner’s personal credit record to be in good shape with no missed payments or recent credit problems.
“New businesses are the life blood of Oklahoma,” Muske said. “They are also the dream of many individuals. That is why the OCES is there to help those people.”
Not having the finances or being able to get a grant or the “free money” to start a business may be less of a problem than the prospective owner may think. OCES can help the owner develop a business plan and also can suggest sources for funding. Our offices can also help a prospective owner get prepared financially for taking the business ownership step in the future.
Muske said the key is to develop a plan for what you need and then begin working toward your goal.
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http://www2.dasnr.okstate.edu/Members/katie.reim-40okstate.edu/financing-the-start-up-business
Contact: Katie L. Reim, (405) 744-6792, katie.reim@okstate.edu
