While most small business start-ups are financed by the owners and/or the owners' families, friends and relatives, it is not all that difficult to obtain start-up financing from strangers. Several factors affect the ease with which strangers can be enticed to fund your effort: current economic conditions, nature of your new business, your business and marketing plans and, probably most importantly, your enthusiasm.

Your Dedication and Enthusiasm Key Factors

Success of your small business is greatly influenced by the your dedication and enthusiasm. By the same token, your dedication and enthusiasm are the most important key factors in the convincing strangers they should invest their money in your new business. And key to all of this is the old adage, "If you don't ask, you don't get."

Decline of Traditional Sources of Start-up Cash

The United States and  much of the 'industrial' world is currently in an economic slump. The self-induced mortgage crises has caused the usual capital investment companies to severely increase their caution. While the text books still discuss taking your business plan to your bank, etc., there are other approaches that can work much more to your favor.

Introduction to 'Crowdfunding'

The 2004 election campaign introduced a new way to generate large amounts of money for a cause: the Democratic Party's effort to win the presidential election. They used the Internet reach to get lots and lots of people to contribute small sums of money. This technique was amplified by the Obama campaign in 2008 (the Republicans even gave it a try) which proved, again, that funding could be acquired this way and at very little cost. A recent article on page 51 of the 15 September 2008 issue of Time Magazine describes this same application by individuals to start up businesses and even procure college tuition! Time calls it 'crowdfunding' but, whatever, this is the Internet Age and 'crowdfunding' is an excellent application of Internet technology.

Back to the Think Tank

We recommend taking the same approach you did in our Defining the Best Approach chapter. Form your own 'think tank' and develop your own funding plan. And remember, "He who doesn't plan plans to fail."

Putting it All Together . . .