Monday, July 6, 2009

Making Money: Capitalizing

Have you ever heard of the saying, "You need money to make money"?
Well its true. But what does that mean? It means, in the simplest form, that you cant buy a store without the capital (cash) to do so.
So I guess your next question is; How the h3ll do I get that?!
And yet again it comes in the simplest form.
Getting a loan is usually what people jump to first because it easy to do and its immediate. The problem with that is you need to find someone who will give you a loan and you need to find a way to pay it back - even if your business falls through.
Saving up for it yourself is the second most popular option. It may take longer and has a much greater risk for you to lose your savings but is my second favorite option for capitalizing (mostly because there is no interest).
Getting a partner. This splits the costs and responsibilities of everything in half. However it also splits all the decisions in half which can be a problem if you don't agree with your partner.
And finally, drum roll please...my favorite and most used strategy for capitalization is to receive a grant. A grant is free money for education or business, usually given by the government or organizations. For a business I would suggest hitting up the government before organizations and then if all else fails try any of the above.

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