Catholic moms recognize the importance of being physically present for their families. That’s why the mompreneur lifestyle has such appeal.
Often women get swept away with the freedom and flexibility the mompreneur lifestyle offers. However, they overlook the financial realities of being a business owner.
And a critical business skill is finessing the funding of a startup business or business expansion.
Where should you start?
Know How Much You Need to Fund
In my previous blog I outlined ways to discern what kind of mom biz is right for you or when the time is right to expand. The goal of the discernment process is to come up with a funding amount you need along with a clear plan towards profitability.
Whether that is a big or small number, you need to know how you will infuse capital into your enterprise. Here are some options from the most invasive—meaning you need to share more details and private information about your business with others — to the least invasive.
Weigh the Pros and Cons of Funding Options
1) Bank Loans – Banks typically aren’t eager to loan money for new, unproven business ideas. But with a good business plan, a good relationship with a banker, and possibly collateral or a cosigner, you may be able to get a loan. Understand that banks will often require you send them ongoing financial statements through the course of the loan. As a new startup or company without a long track record, the terms of your loan may not be as favorable as other loan sources. Banks are able to loan you larger amounts of money for longer terms than other financing options, which keeps your monthly payments more manageable.
2) Home Equity and Property Secured Loans – It may be the simplest to take out a home equity loan for the cash you need. If you do own other properties, you could take loans out against them as well. Realize though that if your business doesn’t produce like you project, and you can ‘t make the payments, you could lose your property or even your home.
3) Family – You could appeal to family to help fund your business either in the form of a gift or an investment. Some family might love to contribute. But you open yourself up with entanglements in both your business and personal life when you invite your family to support you.
4) Credit Cards – If you have good credit, credit card companies shower you with credit card offerings for low to no promotional interest rates. At the end of the promotional term you can often transfer the balance to another credit card for another low promotional rate. Be careful to only fund what you have identified in your projections. And make sure the monthly payment doesn’t climb so high that you aren’t able to pay it.
5) Working More – If you already have a business, you could increase your revenue generating hours to close the revenue gap in your business. As a therapist, it didn’t dawn on me to increase my therapy hours a couple clinical hours a week to fund my initial intensive coaching training. It goes against the grain for many mompreneurs wanting to have more money in less time. But if you look at it as a temporary measure towards a bigger goal and have a plan to reduce your hours in the future, it can provide the money you need while giving you a sense of control.
6) Direct Marketing – You may not want your mom biz to be in the form of working for a direct marketing company. Consider that direct marketing can generate the quick cash you need for the business of your dreams. With a very low financial entry point, you may be able to generate several hundred dollars a week in direct marketing, which you can use to help fund your business without being tied to a 9-5 job.
7) Yourself – You could use savings or cash out investments to fund your business.
The key to making any of these funding strategies work is to have a well thought out business concept and plan and to stick with a defined funding schedule. Throwing money at a bad idea leads to heartache. But, it you do the footwork, are realistic about what it takes, and are willing to do the right things well to grow your business, you are on your path to have the business and lifestyle of your dreams.
Catholic Mompreneur Biz and Life Tips: When you plan and discern how your business will work and what funding you need, you are light years ahead of other businesses. Schedule a mini-business retreat now to review the fundamentals of funding, marketing, and operating your business.
Copyright 2014 Christina M. Weber