Strategies for self-funding your small business

Squidoo is actually a website, where users can create their own page, which is known as a Squidoo lens. A Squidoo lens is a web page on which different aspects of a website can be added. You can add information, links, pictures, videos and everything else that makes your website stand apart.

Other factors that improve your chances to get funded are:

• Your plan should show good profit potential in a short period of time.
• The higher the rate of return you can offer investors and the faster you can produce it, the better your chances. Your plan should target a clearly defined market with enough size and purchasing power to produce a profit.
• Investors also prefer large markets with high growth potential. They avoid businesses that attempt to be “everything to everybody.” Your plan should clearly explain the “competitive edge” your product or service has over rivals.
• You should show an ability to control both the delivery and the quality of the product or service. Also, that managers and employees have the skills and the experience to make the company a success.
• Show that you have made a personal investment in this business venture.
• If you don’t believe in your own venture enough to invest at least some of your own money in it, how can you expect others to? “Sweat equity”—unpaid personal time and hard work—can be important, but lenders and investors like to see an entrepreneur with an important financial stake in the business. It’s a tremendous source of motivation.
• Lay out a clear, well-conceived, workable strategy for getting this business up and running. Show realistic financial projections covering most likely, pessimistic, and optimistic scenarios.
• Potential lenders and investors want to be sure that the “dollars and cents” of the deal make sense, and that’s why realistic projections are important. Most entrepreneurs underestimate the amount of money needed for a start-up. Don’t get caught short!

Here are a few tips for self-funding your startup:

1. Evaluate if self-funding is right for you. While going it alone is certainly noble, it's not always prudent. Take a careful look at your business plan, and see if self-funding really makes sense. If you have massive startup costs in order to launch your product, you might be better off talking to investors or launching a crowdfunding campaign. You might also want to skip self-funding if you're in a personal cash pinch, or have other significant financial responsibilities, like student loans or a mortgage.
2. Know your numbers. When the only cash in the bank is your own, you really can't afford to miscalculate your operating costs. Build a financial model that's sophisticated enough to capture a holistic snapshot of your business, but simple enough for you to update and manage on a monthly or weekly basis.
3. Pay yourself, eventually. With a new business, it's easy to always put other investments ahead of your personal needs. Why take a salary when you could put those funds toward launching another product or hiring another person? While you may have to forgo anything close to market rate, make sure you start paying yourself sooner rather than later. You can then build your business around your salary allocation, instead of putting it off indefinitely.
4. Be open to change. As your business scales, you may find that relying on your profits alone is not enough to sustain your rate of growth. This could happen after a few months or several years. Be open to exploring other methods of funding, whether that's investors or a small-business loan.