Forums: Discussions for entrepreneurs and small business.

I am in the process of trying to open a retail bakery in Cheyenne Wyoming. I have 20 years of combined experience in baking, hospitality management, and accounting. I have created a business plan which has been reviewed by a friend who is a CPA and business consultant and he has found it to be solid. The amount of financing that I need is relatively low- under $40k- but finding it has been a source of intense aggravation! The issue is that the only collateral that I can offer is the equipment that will be purchased which is a little under 1/2 of the total amount that I am requesting. I have talked to 3 banks and have come up empty every time because of the lack of collateral. They want 100% collateral. If I search the internet for funding ideas there are SO many that pop up. It seems the ones who are most likely to be legit are sources like Funding Universe and Go Big Network but all of these companies charge fees that would rapidly add up. Is there any way to find investors or angels out there without paying for a membership on these websites? Then there are the companies that basically want you to hire them to help you improve your credit- which isn't even going to help if you still don't have the collateral. I'm at the end of my rope and just looking for any legitimate ideas to help me get my dream going! This is really EVERYTHING to me and my family- there has to be a way to do it! Thanks for any advice! 

Dear PieceofCake,

I know how frustrating it can be trying to convince banks to lend money. Success in acquiring capital /financing for a business starts with choosing the optimum strategy. the second step its to be prepared (I call it being Capital Ready) with everything that the targeted capital source will need and expect (ie biz plan, supporting materials, proper documents, etc). Pert of the preparation process is developing a "game plan" for acquiring the capital which is built around a proven system.

In your case, the amount you seek is well below the threshold of typical "professional" angels - so if you decide to seek investment capital (rather than a loan) you'll have to reach out to private investors.

Hope this helps. If you want to discuss your specific situation (in confidence) feel free to contact me directly.

As robertj said, your asking for so small a sum that people with money to invest don't understand how you could be wanting $40K to start a biz.

How will you pay employees, rent, utilities, etc. and still pay yourself with only $40K?

And to be honest, how much revenue will you be able to generate with $40K covering everything including advertising?

Your business idea is one that someone with their own money would pursue. Not one that will generate enough return to gain the interest of a serious investor.

I didn't say it would cost $40k....I said I needed $40k in financing. I have some of my own money to invest- I just need financing for equipment and a portion of working capital.

Sorry for wasting everyone's time with my post.

Piece of Cake,

I don't think you were wasting my time with your post. If my first response sounded like it - then I apologize. I was trying to share some information to guide you to the appropriate capital sources.

Since you mention equipment,  you may want to investigate the possibility of financing it separately perhaps through a lease arrangement. Many manufacturers offer terms to help customers purchase their equipment.

Good luck in making your dream into a reality.

robertj

First you didn't waste anyone's time with your post. In fact it appears you are more prepared than most.

I didn't understand that you were looking for the last bits of financing.

Keep in mind if I have a particular lifestyle as a wealthy investor I'm looking for businesses that will turn enough dollars to keep me in that lifestyle. A small bakery will probably not do it. But if you had three shops and were ready to start a national franchising push, that would be a good investment.

Thank you, Rich and Robert for sharing your thoughts.

Hi Robertj,

I have invented a unique, revolutionary product; it is patented and it has been tested in over 100 locations. This product clears and deters pigeons, birds, and small animals from an area. The common question presented at these test sites is “when and where can I purchase this product”.

We have manufacturing, marketing, and distribution ready to go. What we do not have are the funds to start production and advertising.

Any suggestions on funding? I need seed money of $290K

Donald,

Could you get 'firm" purchase commitments from those test sites?

They would give you a strong position with a capital source.

In general, there are several ways to bring capital into a company. The optimum one would depend upon many factors, including your personal situation and preferences.

If you want to discuss your specific situation, feel free to contact me directly.