This article from Black Enterprise Magazine
offers financial tips for new entrepreneurs.
"African-Americans are starting new businesses in record numbers. If you're planning to launch a company in 2012, you need a financial game plan-as well as an operational one. Follow these seven economic dos and don'ts to help ensure your entrepreneurial success."
1. Do plan to start with your own money, not someone else's.
"The money to start your business will come from your right or left pocket. In fact, there are three pools of money you should have before your start a business: an emergency savings account, enough budget to go from 12 to 24 months without a paycheck, and the first year of operating capital to run your business," says Melinda Emerson, author of Become Your Own Boss in 12 Months: A Month-by-Month Guide to a Business That Works.
2. Do request major funding long before you need it.
Maybe you recently saw The Social Network, the movie about the launch of Facebook, and thought that you could score big dollars fast from venture capitalists? Think again.
3. Do seek "trade credit" from vendors and suppliers.
Too many entrepreneurs dream of going to a bank and getting a business loan or line of credit for their enterprise. But maybe you don't need a traditional bank loan at all to launch or grow your business.
4. Do get buy-in from your spouse/partner.
Many new (and veteran) entrepreneurs will tell you one of the biggest dream killers they've encountered is an un-supportive spouse. Make sure your partner is on board with your entrepreneurial ambitions. If not, you'll face a host of financial arguments and money-battles that will be counter-productive to you building a business and to your relationship.
5. Don't feel compelled to buy everything.
Ask yourself: Do I really need to purchase equipment, furniture, computers, etc? You may be able to get by, temporarily, by bartering, or even by renting and leasing equipment. And that's OK!
6. Don't let your personal credit rating lapse
. Amid the current environment, your credit standing is more important than ever. Guard it aggressively. Pay all bills on time. Only take out loans/credit when you truly need it.
7. Don't "bet the farm."
Smart entrepreneurs don't "roll the dice" and risk everything. They take risks-but they're calculated risks. Don't gamble everything: 100 percent of your savings, your credit, putting your home up, etc., in the hopes that you'll create a successful business. Be willing to invest in your business of course, but not foolishly and not at the expense of everything else.
Read the full article...