Financing Your Mompreneur Business

Many wannabe entrepreneurs don't move forward with their business idea because of the fear of raising business financing. Don't let fear stop you! If you have a good idea and a well-thought plan, then there's a way to make it work, and it may not be as hard as you think.

In fact, there are more business financing opportunities for female entrepreneurs than ever. Maybe that's because there are more prominent women business owners than ever. Unfortunately, even with this increase in funding options, mompreneurs still have a disadvantage -- they're often thought of by investors and lenders as less committed and less likely to stick to their business plan because of the pull of family.

But even though you'll face some obstacles on the road to business funding, you'll be glad to hear there are definitely options out there for financing your business, some traditional and some more creative. Just remember, if there's a will, there's a way.

Funding Options

Chances are to raise money, you'll need a business plan. If you don't yet have one, don't feel intimidated by the project. It's just a matter of charting out how much you expect to make and spend and detailing how you figured this out.

When it comes to the financial side of your plan, it's best to be conservative and increase your expense calculations and decrease your projected revenue. Investors will also want to know why your business is unique and how you plan to beat out your competition.

Your business plan should also show your experience and your passion for the proposed business. (You can get business plan samples and guidance on writing your own plan at Entrepreneur.com.)

Once you've completed your business plan, you're ready to search for funding. There are basically just two types of investments: debt and equity. With debt funding, someone loans you money and gets their money back plus interest. With equity funding, you sell part of your company in exchange for the investment. Be careful with equity funding!

It's easy to give away a percentage of something that's currently worth nothing. But if your company turns out to be worth a million dollars, that $10,000 investment you got was probably not worth 10% of your company. Also, equity funding means partners. In one way or another, equity investors are a part of your company.

So how will you get your money?

The first line of business financing is usually a personal loan -- you loan yourself the money. This can come in the form of line of credit on your house, your savings, even your retirement account. The benefit of a personal loan is that you retain total control of your business.

The downside is, there's a big risk involved. Are you willing to risk your family's personal assets? Chances are, it'll be hard to find a bank or investor to lend you any money if you're not willing to take on some risk yourself.

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