Page 249 - merged.pdf

CHAPTER 8 MASTERING YOUR MONEY

Strategies to Raise Money

Once you have estimated
the total startup capital you
require to start your
business, you need to find
a way to raise the money.
I believe the best way to
raise the capital is by
saving the money yourself.
This way, you won’t have
to give away too much
shares in the business at the start nor would you have to take
on any kind of debt.

I believe that the best strategy would be to work for the top
competitor in the industry for 1-2 years before starting your
own business. Think of it as a chance of being paid to learn.
By first working for the very best, you get the chance to model
the very best management, operations, marketing and HR
strategy that works for your particular industry.

If, for some reason, you have decided to start your business
with a fairly large sum of money (more than $200,000) and
require external funds, then there are basically only two ways
to raise capital; either sell a stake in your business (equity)
or borrow the money (debt).

a. Selling a Stake (Selling Equity)
This involves getting people to invest money in your business
in return for part of the ownership. The advantage of this
strategy is that if the business loses money or goes bust, you
are not obligated to pay back the invested capital. It is the
investors who take the risk and not you. Of course, the

240 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES