Small Business: Raising money
Joanne Carine, Bayonne, N.J.
I am 23 years old, am a hairstylist and the owner of my salon is going to sell the shop next year. I would love to buy the shop and would need a small business loan. I have been a hair dresser for 3 years. I live with my parents but financially they cannot help me purchase the shop for $150,000. Should I borrow the money or wait until I am older and have more experience?
Leonard, Russellville, Ark.
For four years I was production manager of a business which is now up for sale. I want to buy it. This business never showed a profit until I took over, then made money 2004-2008, while I worked there. I don't have the money/credit to buy it, and I have been seeking out investors who would be willing to help me based on my track record as manager. Would appreciate any advice or input.
Dayzon Johnson, CEO, Ice Cold Music, Clarksville, Tenn.
I own an independent record label that I started two years ago. It's growing quickly, and I'd like to get a bank loan to help me expand. But I have a bankruptcy on my personal credit record. Will this make it impossible for me to get bank credit for my business?
Before courting investors, make sure you prepare your pitch.
Dan Henderson, Houston
Our company is growing very rapidly – sales should exceed $40 million in 2008, up from $11 million in 2005. Though we've had the funds to acquire smaller companies, our latest acquisition required some creative financing, and it's becoming clear that the next phase of growth will require additional capital. What is the best way to draw interest from private equity firms?
Michael Andrews, Integricy.com, Groton, N.Y.
My company is trying to get funding; however, we are still waiting – and have been for six months. We only need about $500K to start, and our projections for years five and six are over $18 million, which we are being told is way too low. Why do I keep getting rejection letters from hundreds of firms that keep saying they only fund $1 million or more?
Before courting investors, make sure you prepare your pitch
Dan Henderson, Houston, Texas
Our company is growing very rapidly – sales should exceed $40 million in 2008, up from $11 million in 2005. Though we’ve had the funds to acquire smaller companies, our latest acquisition required some creative financing, and it’s becoming clear that the next phase of growth will require additional capital. What is the best way to draw interest from private-equity firms?
To rent out empty rooms, turn to local media and Craigslist.
Sherri Birdsall, Gensis Medical Education Consultants, Orange, Calif.
I work for a business that teaches continuing-education courses for nurses in Orange, Calif. Most of our classes are conducted on weekends, which means two beautiful classrooms sit completely unused most of the week. I’d like to rent them out to bring in extra money. Any suggestions on where to start?
A look at how federal law defines the most desirable financial contributors.
Ellison Long, Atlanta, Ga.
Does an individual employee who wants to invest in our soon-to-be-established LLC need to be an “accredited investor"?
Read more…
Michael Stewart, Clinton, Mo.
I am creating an Internet cafe/ISP/IT consulting company called CyberNation USA. I have been trying to find a business partner that I can really trust to help me expand my business. I can't seem to find people with as much drive and determination as I have. I want to start offering stock as capital, but I'm afraid it will grow faster than I can handle. I really do need some advice. Am I way too pushy, or not aggressive enough? What am I doing wrong?
Should this owner seek out international investors to grow his business?
Jean Luc Gaudry, Los Angeles
I have a unique music Web site on which one can find listings of shows, bands on tour, clubs and venues. I have two questions. I am looking for some investors – what are the biggest mistakes entrepreneurs make when they decide to add an investor to their company? Also, I want to set up a company in Europe and eventually have my Web site branch out all over the world. Is it better to have different investors on each continent? Read more…
