Need Startup Money for Your Healing Practice? Part 2
In last week’s blog post we talked about the two types of startup financing: debt and equity. This post focuses on the main sources for funding your energy healing practice.
7 Main Sources of Funding for Small Business Start-ups
Investors are more willing to invest in your start-up when they see that you have put your own money on the line. So the first place to look for money when starting up a business is your own pocket.
According to the SBA, 57% of entrepreneurs dip into personal or family savings to pay for their businesses’ launch.
If you decide to use your own money, don’t use it all.
There’s no reason why you can’t get an outside job to fund your start-up. In fact, most people do. This will ensure that there will never be a time when you are without money coming in and will help take most of the stress and risk out of starting up.
If you are going to use plastic, shop around for the lowest interest rate available.
2. Friends and Family
Money from friends and family is the most common source of non-professional funding for small business start-ups. Here, the biggest advantage is the same as the biggest disadvantage: You know these people.
Unspoken needs and attachments to outcome may cause stress that would warrant steering away from this type of funding.
3. Angel Investors
An angel investor is someone who invests in a business venture, providing capital for start-up or expansion.
Angels are affluent individuals, often entrepreneurs themselves, who make high-risk investments with new companies for the hope of high rates of return on their money. They are often the first investors in a company, adding value through their contacts and expertise. Angel investors often organize themselves in angel networks or angel groups to share research and pool investment capital.
4. Business Partners
There are two kinds of partners to consider for your business: silent and working.
A silent partner is someone who contributes capital for a portion of the business, yet is generally not involved in the operation of the business.
A working partner is someone who contributes not only capital for a portion of the business but also skills and labor in day-to-day operations.
5. Commercial Loans
If you are launching a new business, chances are good that there will be a commercial bank loan somewhere in your future. However, most commercial loans go to small businesses that are already showing a profitable track record.
Banks finance 12% of all small business start-ups, according to a recent SBA study. Banks consider financing individuals with a solid credit history, related entrepreneurial experience, and collateral (real estate and equipment). Banks require a formal business plan. They also take into consideration whether you are investing your own money in your start-up before giving you a loan.
6. Seed Funding Firms
Seed funding firms, also called incubators, are designed to encourage entrepreneurship and nurture business ideas or new technologies to help them become attractive to venture capitalists.
An incubator typically provides physical space and some or all of these services: meeting areas, office space, equipment, secretarial services, accounting services, research libraries, legal services, and technical services.
Incubators involve a mix of advice, service and support to help new businesses develop and grow.
7. Venture Capital Funds
Venture capital is a type of private equity funding typically provided to new growth businesses by professional, institutionally backed outside investors.
Venture capitalist firms are actual companies. However, they invest other people’s money and much larger amounts of it (several million dollars) than seed funding firms.
This type of equity investment usually is best suited for rapidly growing companies that require a lot of capital or start-up companies with a strong business plan.
Now that you know the seven main sources of funding for small business start-ups, if you are an energy worker making the transition from working on family and friends to starting up an energy healing practice of your own, target these three sources of funding:
• Family and friends
• Angel investors
Depending on your situation, two other possibilities might be considered:
• Possibly – seed funding firms
• Possibly – business partners
The last two: commercial loans and capital funds are best tapped into after you’re up and running or when you’re ready to expand your energy healing practice.
The Yes You Can! Get Your Vision Aligned in 10 Days eBook empowers energy healers to put themselves forward in their communities and start up heir healing practice. For in doing so, not only will more people find the healing they need, our communities and our relationship with the natural world will also be healed.
Please join me at FB/groups/Energy Healers Thriving Businesses to receive your copy of Yes You Can! Once you’ve joined the group, you can download the PDF from the Files section.