Start a Consulting Business

Show Me the Money! How Will You Finance Your Consulting Services Business?

You are more likely to succeed as a consulting services owner when you begin with plenty of financial resources and knowledge. So let’s consider some of the most popular methods for obtaining funding for a consulting services and weigh the pros and cons of each option.

Consulting Services Business Financing Options

• Personal Savings: Using your own personal savings to fund your consulting services is the most popular and easy source of startup capital. Many consulting services business owners continue to work at their day job so that part or all of their wages can support the business until it breaks even. Being your own lender obviously is dependent on the quantity of money you have saved, your salary, and your living expenses.
• Family and Friends: Some people borrow startup capital from friends and family to help finance their consulting services. Receiving loans from those close to you can be a readily available way to raise money for your business. If your business succeeds, it’s also a viable investment strategy for those who have lent you money. Keep in mind, however, that if your business fails and you cannot repay these loans, you may endanger these personal relationships you’ve worked so hard to build over the years. Never ask for money from friends or family who can’t afford it.
• Home Equity: If you own a home, you could apply for a home equity loan to help with your
  consulting services startup costs. Be sure to understand your equity loan options and repayment schedule. Don’t risk losing your home by not understanding the terms of loan repayment.

• Credit Cards: When used wisely, credit cards are a great option to think about using for your startup cash needs. However, there are obvious risks with using credit cards. Make sure you know exactly what your interest rates will be, and be sure you can at least cover the minimum payments. Some credit card companies offer attractive cash advance options with very low or no interest due for 6 months or longer.
• Bank Loans: You can get small business loans through banks and other commercial lenders. You may need to apply to several lenders before you get a loan, so be prepared to be patient, and be willing to knock on several doors.
• SBA Loans: If you cannot obtain regular bank financing for your consulting services then you should consider obtaining a loan through the Small Business Administration (SBA). Generally, the SBA does not make loans itself, but rather it encourages private lenders to make money available to small business ventures.
• Investors: Angel investors and venture capitalists typically fund a startup business in whole or part in exchange for a share of your profits. These investors often like to become involved in the business operations and decisions as well. So be prepared to share control of your consulting services in exchange for their money.
• Grants: Business grants are typically available from states or federal government agencies. A grant typically does not need to be repaid, but sometimes it will require that you match the funding amount. Most grants are designed for a specific business category or to assist a specific type of business owner; such as a minority owned business or women owned business.