6 Steps to Raising Capital for Your Veteran Owned Business

One of the biggest challenges in starting your own business after the military is finding the capital you need to make your idea happen. Depending on your business, you may need just a little bit of money, or you may need a substantial investment. Fortunately, there are many options for you to consider.

Step #1: Write Your Business Plan

One of the best things you can do to prepare yourself for your entrepreneurial journey is to take the time to write out a business plan. This process helps you centralize your ideas, and create an actionable plan to make them happen. More importantly, a well-developed business plan can mean the difference between obtaining a business loan and being turned down.

Step #2: How Much Will You Need?

This is always a tricky question for prospective entrepreneurs. If you’re looking for a loan, you need to make sure that your request is reasonable. At the same time, you want to make sure that you have a little bit more than you actually need. There are many unforeseen costs that are associated with starting a business. The best way to set a reasonable amount is to create a budget of expected costs, and add a little on top for an emergency fund.

Step #3: How Much Do You Have?

Before you go out and lock yourself into a loan, consider your own resources. The more you can personally invest into your startup, the faster you will be able to turn a profit. If you have a loan or a credit card over your head, that payment will eat at your incoming revenue until you’ve paid it off. Even if you can only come up with enough for part of the funding that you need, it will still help you get out of debt faster.

Step #4: Look for Grants

There are a few options available to help veteran entrepreneurs fund their new businesses. One great option for service members and spouses is the StreetShares award program. They offer three monthly awards to eligible veterans, reserve or active-duty members, and military spouse fall business owners.

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Step #5: Ask a Family or Friend

This option doesn’t work for everybody. You may not feel comfortable asking family members or friends for money. For some entrepreneurs, this is a great option. Just make sure that you have a legal agreement in place to avoid any issues down the road.

Step #6: Talk to the Bank

Once you’ve exhausted all other options, consider a personal loan or business loan. You can also explore the option of getting a credit card to cover your startup expenses. These can be challenging to obtain, and are often based on credit and income. Before you sign any loan documentation, make sure you know the true cost of the loan. Often, you’ll find that a loan of $50,000 may cost you several thousand dollars more than the loan itself. It’s always a good idea to try to come up with as money start up funding as you can before exploring this option.