0% Intro APR on Purchases
Purchases: 0% Intro APR on Purchases, 12 months
Balance Transfers: N/A
18.49% - 24.49% Variable
On Chase's Secure Website.
N/A
Purchases: N/A
Balance Transfers: N/A
21.24%-26.24% Variable
The key to a successful crowdfunding campaign is engagement. You'll need a compelling story and clear communication about your business goals, how the funds will be used, and what contributors will get in return. Videos, blogs, and regular updates can help personalize your campaign, making it more likely to resonate with potential backers.
Crowdfunding not only raises capital but also validates your business idea through public interest. It's less risky in terms of debt and doesn't require giving up equity -- unless you opt for equity crowdfunding. However, the success of crowdfunding is not guaranteed, and it requires substantial marketing effort to reach your target amount.
When more traditional methods are preferred, small business loans from banks, credit unions, or community-based lenders are a go-to. These loans are specifically designed to meet the needs of small businesses, offering lower borrowing amounts with feasible repayment terms.
Additionally, the Small Business Administration (SBA) offers a variety of loan programs that assist small businesses in securing loans from $500 to $5.5 million through guaranteed backing by the SBA, which makes lenders more willing to take a risk.
Prepare to face rigorous scrutiny when applying for a business loan. Banks will examine your business plan, credit history, financial projections, and preparedness to ensure the risk they're taking is minimal. The better your preparation, the higher your chances of approval.
Don't forget to explore community-based lenders who may have more favorable terms or greater interest in supporting local businesses. SBA loans can also be a fantastic route due to their lower interest rates and longer repayment terms, making them especially attractive to new entrepreneurs.
The advantage of a small business loan is clear: you get the funds you need without giving up any equity in your business. You maintain full control. On the flip side, these loans can be hard to qualify for, especially if you're a new business owner without financial history. Plus, failing to repay the loan can negatively impact your business and personal credit scores.
Securing funding for your startup or small business involves weighing options, strategic planning, and a bit of courage. With the right approach and a little persistence, you'll find the funding you need and build a solid foundation for your business's financial future. Remember, the most successful funding journey is the one best aligned with your business goals and values.
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
Jordi Lippe-McGraw is a freelance personal finance writer who has appeared in publications such as Forbes, The Wall Street Journal, TODAY, and Saving for College. In addition to personal finance, Jordi has a passion for travel. She's visited all 7 continents and over 55 countries, writing for outlets such as Travel + Leisure and Conde Nast Traveler.
Share this page
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Related Articles
By: Cole Tretheway | Published on June 7, 2024
By: Lyle Daly | Published on June 5, 2024
By: Christy Bieber | Published on June 5, 2024
By: Lyle Daly | Published on June 4, 2024
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2024 The Ascent. All rights reserved.
Sections of a business plan, the bottom line.
How to secure business financing
Matt Webber is an experienced personal finance writer, researcher, and editor. He has published widely on personal finance, marketing, and the impact of technology on contemporary arts and culture.
A business plan is a document that explains what a company’s objectives are and how it will achieve them. It contains a road map for the company from a marketing, financial, and operational standpoint. Some business plans are more detailed than others, but they are used by all types of businesses, from large, established companies to small startups.
If you are applying for a business loan , your lender may want to see your business plan. Your plan can prove that you understand your market and your business model and that you are realistic about your goals. Even if you don’t need a business plan to apply for a loan, writing one can improve your chances of securing finance.
There are many reasons why all businesses should have a business plan . A business plan can improve the way that your company operates, but a well-written plan is also invaluable for attracting investment.
On an operational level, a well-written business plan has several advantages. A good plan will explain how a company is going to develop over time and will lay out the risks and contingencies that it may encounter along the way.
A business plan can act as a valuable strategic guide, reminding executives of their long-term goals amid the chaos of day-to-day business. It also allows businesses to measure their own success—without a plan, it can be difficult to determine whether a business is moving in the right direction.
A business plan is also valuable when it comes to dealing with external organizations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they’ll provide capital to new businesses.
Even if a business is well-established, lenders may want to see a solid business plan before providing financing. Lenders want to reduce their risk, so they want to see that a business has a serious and realistic plan in place to generate income and repay the loan.
Every business is different, and so is every business plan. Nevertheless, most business plans contain a number of generic sections. Common sections are: executive summary, company overview, products and services, market analysis, marketing and sales plan, operational plan, and management team. If you are applying for a loan, you should also include a funding request and financial statements.
Let’s look at each section in more detail.
The executive summary is a summary of the information in the rest of your business plan, but it’s also where you can create interest in your business.
You should include basic information about your business, including what you do, where you are based, your products, and how long you’ve been in business. You can also mention what inspired you to start your business, your key successes so far, and your growth plans.
In this section, focus on the core strengths of your business, the problem you want to solve, and how you plan to address it.
Here, you should also mention any key advantages that your business has over your competitors, whether this is operating in a new market or a unique approach to an existing one. You should also include key statistics in this section, such as your annual turnover and number of employees.
In this section, provide some details of what you sell. A lender doesn’t need to know all the technical details of your products but will want to see that they are desirable.
You can also include information on how you make your products, or how you provide your services. This information will be useful to a lender if you are looking for financing to grow your business.
A market analysis is a core section of your business plan. Here, you need to demonstrate that you understand the market you are operating in, and how you are different from your competitors. If you can find statistics on your market, and particularly on how it is projected to grow over the next few years, put them in this section.
Your marketing and sales plan gives details on what kind of new customers you are looking to attract, and how you are going to connect with them. This section should contain your sales goals and link these to marketing or advertising that you are planning.
If you are looking to expand into a new market, or to reach customers that you haven’t before, you should explain the risks and opportunities of doing so.
This section explains the basic requirements of running your business on a day-to-day basis. Your exact requirements will vary depending on the type of business you run, but be as specific as possible.
If you need to rent office space, for example, you should include the cost in your operational plan. You should also include the cost of staff, equipment, and any raw materials required to run your business.
The management team section is one of the most important sections in your business plan if you are applying for a loan. Your lender will want reassurance that you have a skilled, experienced, competent, and reliable senior management team in place.
Even if you have a small team, you should explain what makes each person qualified for their position. If you have a large team, you should include an organizational chart to explain how your team is structured.
If you are applying for a loan, you should add a funding request. This is where you explain how much money you are looking to borrow, and explain in detail how you are going to use it.
The most important part of the funding-request section is to explain how the loan you are asking for would improve the profitability of your business, and therefore allow you to repay your loan.
Most lenders will also ask you to provide evidence of your business finances as part of your application. Graphs and charts are often a useful addition to this section, because they allow your lender to understand your finances at a glance.
The overall goal of providing financial statements is to show that your business is profitable and stable. Include three to five years of income statements, cash flow statements, and balance sheets. It can also be useful to provide further analysis, as well as projections of how your business will grow in the coming years.
Lenders want to see that your business is stable, that you understand the market you are operating in, and that you have realistic plans for growth.
Your lender will base their decision on what are known as the “five Cs.” These are:
The length of time it takes to write a business plan depends on your business, but you should take your time to ensure it is thorough and correct. A business plan has advantages beyond applying for a loan, providing a strategic focus for your business.
The most common mistake that business owners make when writing a business plan is to be unrealistic about their growth potential. Your lender is likely to spot overly optimistic growth projections, so try to keep it reasonable.
You can hire someone to write a business plan for your business, but it can often be better to write it yourself. You are likely to understand your business better than an external consultant.
Writing a business plan can benefit your business, whether you are applying for a loan or not. A good business plan can help you develop strategic priorities and stick to them. It describes how you are going to grow your business, which can be valuable to lenders, who will want to see that you are able to repay a loan that you are applying for.
U.S. Small Business Administration. “ Write Your Business Plan .”
U.S. Small Business Administration. “ Market Research and Competitive Analysis .”
U.S. Small Business Administration. “ Fund Your Business .”
Navy Federal Credit Union. “ The 5 Cs of Credit .”
RoadtoFunding
Home » Grants » Business Grants
Do you want to apply for startup grants but don’t know how to write a proposal? If YES, here are 11 steps to writing a grant proposal for small business funding. Starting a business is not easy feat especially for people who are considered disadvantaged like Veterans, the disabled or people who are in minority.
For this reason, certain nonprofit organizations, agencies and foundations have been set up by government and even private individuals to provide these people grants to start their small businesses. If a new small business is struggling financially or if the business operates within a certain field, like agriculture or nonprofit charities, a grant may be the best way to obtain funding.
Grants are typically a donation of a set amount of money made by foundations, other businesses, government agencies or nonprofit organizations to companies or individuals that meet specific requirements and qualify for the grant.
Grants are given to businesses for free, so they are not to be paid back. This is one of the major or even the only lure of grants. A grant differs from small business loans in that loans must be paid back, typically with interest. Because they offer free money, grant giving organizations are usually quite strict in their requirements.
The truth is that there is a lot of free money out there begging to be spent on businesses that are ready to advantage of it. That’s grant money. Several organizations, foundations, and government bodies provide grants for small businesses and nonprofit organizations. If you are looking for grant money for an existing or new business, you are more than likely to encounter difficulties finding grant funding, but it’s not impossible.
If anything makes grant funding similar to bank loans and equity funding ( by investors and venture capitalists ), that would be the fact that you need to write a proposal to get it. And as with proposals meant for lenders and equity funders, your proposal for a grant funding must be downright compelling. Even though the grant issuer isn’t taking any gains from your profits, they don’t want their funds to go down the drain.
So, you need to send a proposal to convince them that your idea or business is viable. This explains why such a proposal needs to include many of the elements in your business plan—the same elements that make your business plan compelling. While business plans and grant proposals serve nearly the same purpose, the two are different from each other.
Organizations that provide grants have a vision they want to use that grant to accomplish, so you need to find this vision, read through it, and tailor your grant application to align with it. Typically, you get one shot at a grant proposal, so you need to make the best out of it. You should know that businesses of different sizes and types have different kinds of grants and they are different organizations that offer these grants.
Projects relating to medicine, agriculture or research, will all qualify for separate grants. So the first step in applying for a grant is to determine which one is best for your business. In the united states, the new business will need to register with a federal grant program before they can apply for a grant.
You would need to obtain things like a DUNS number, and an employer identification number (EIN) should be included in your form before you can complete your grant registration. Once the business has been registered, the next step is to write a proposal for the grant and fill out the application form.
Herein then lies the problem, writing the grant proposal. It should be noted that many people have been deprived of grants because their proposal was never at par with what the organization’s needs. Even if you are the best person for the grant but you have a poorly written proposal, the only thing your proposal would see is the trash. This is why you need to take time when writing your proposal.
You will greatly increase your chances of getting grant funding for your business if you really know how to write a compelling business proposal for grant funding. Writing such a proposal isn’t as difficult as you think. Here are the steps involved in writing a winning proposal.
Writing a grant proposal can be quite challenging for the small business owner as it is an art that takes time and practice to master. This is because grant writing is quite technical in its requirements, but that does not mean that it is the most difficult task in the world. Each grant is different in its requirements, but most of them ask for the same basic things. You only need to follow this general guideline and you are on your way to getting the perfect grant proposal.
Grant proposals are different from business plans, but include many of the same elements and serve nearly the same purpose. The grant proposal is usually divided into various parts; you need to be careful and as detailed as possible when writing each so your proposal does not appear shallow. Here is an outline you can use to write your small business grant proposal;
Before writing your business proposal for grant funding, you must bear in mind that your proposal must be tailored to each individual grant issuer that you seek grant funds from. So, you need to really understand the requirements of each grant issuer if you want your proposal approved for funding.
Find out the requirements of the grant issuer you are sending your proposal to. This will help you know what to include in your proposal and what not to include.
To start, you need to create a cover page for your proposal to make it look professional. Your cover page should include your company or Business Name, the date of submission, and the name and contact information of the company representative assigned to work with the grantor. This of course comes first but it is usually written or created at the end of the proposal.
The cover letter introduces the business to the grant organization. It is the first part the grantor goes through so you need to describe your business clearly, but keep it short and preppy because your cover letter is not supposed to be lengthy. Here, you should let the organization know why your business is perfect for this grant and what you aim to accomplish with it.
Make sure to cater to the specific grant and not speak in generalities as if you are applying to every financing source in the United States. Use the cover letter to state the needs your organization serves, how you address these needs, and how your mission fits with the goals of the grantor. Include your contact information in the cover letter too.
Here are a few tips for writing a good cover letter;
This is where you outline the sub-heads of the various chapters and where they can be found. It makes it easy for the reviewer to jump to whatever section they wish with ease. It also displays some professionalism on your part. Again, funding organizations usually receive high volumes of grant proposals; the more reader-friendly your proposal is, the easier it is to fully understand your organization, its mission, and its needs. Place the table of contents immediately after your executive summary.
Remember that each grant issuer is very specific in what they are looking for and will rarely deviate from their requirements. (The fact that there is a lot of money available doesn’t mean they will fund just anything).
So, you have to ensure that your proposal’s outline and summary really matches what they expect from you. Even if your business idea is brilliant and promising, the funder will never bend their rules to fund your business if your proposal doesn’t play by their rules.
After having ensured that the content of your proposal matches the requirements of the grant issuer, start writing your first draft by expanding each point in your outline. This first draft doesn’t have to look good or perfect—it’s a draft and you can polish it later. You must emphasize the aspects of your business that the funder will like best (their requirements/guidelines will give you clues).
The executive summary of a document summarizes the rest of it. In this document you should pinpoint the main reasons the grant is needed and how it will solve the problems of the granting organization. While you explain this, the amount of funding as well as information about the venture should also be listed.
Use this part of the document to convince the grantor that funding your business is the greatest idea ever. Describe how your organization and its mission match the philosophy and specialization of the grantor in the executive summary.
An executive summary is similar to a cover letter in many respects, but it is usually longer. Make certain that your summary clearly describes the contents of your grant proposal. If you manage to get their attention, they will continue reading the rest of the proposal. Here are Tips for writing an executive summary:
In this section of the document, you have to provide in great detail the needs and problems that the business, project or venture is fulfilling and solving. Conduct research and show that you have done your homework. Answer key questions like, what is the scope of the problem? What will your business do that someone hasn’t or can’t easily do in the future? Show that you fill a void in the market and that you need the grant to do so.
Fully conveying the nature of the unmet or underserved needs that your organization can fulfill is vital to gaining funding. Also, adding hard statistics and quotes from people impacted by your organization add weight and credibility to the proposal. Be concise and to the point. Here are some tips for writing statement of needs;
The project description section is the main section of your grant proposal. This section is written best by separating different issues and ideas in separate sections. This will make it easier for you to write the section by focusing on one idea at a time, and make it easier on the reader as well since the section won’t be all scattered.
This section would contain the goals you aim to achieve with your business. You may not have to list anything in intense detail; just give the reviewer a highlight of the objectives of your business. The objectives section includes measurable aspirations of the venture such as achieving a hold of a certain percentage of the estimated market. Break down your objectives in a bulleted list so it is easier to read.
Tips for writing your proposal’s objectives:
This section will show the reader how you intend to achieve your objectives. The methods, plans, and timeline of implementation for those methods and plans will also be shown. Visual timelines are best to show the reader exactly where everything fits into the scheme of things as well as when. This section shows the reader you not only have goals and objectives but that you also know how to achieve them using a detailed well thought out plan.
Many government grants will have stringent personnel requirements because they want you to create employment with the money that they are giving you in order to alleviate poverty and want. If the grant requires a certain number of personnel, make sure your personnel planning matches those requirements.
Also make sure that your objectives match personnel planning. Provide an overview of your organization’s top leadership, including its founder and board of directors. Include short professional biographies, focusing on the experience and resources each leader brings to the organization. Then you can write briefly on all the roles required to be filled in your business.
This is where you tell how you’ll use the money you receive. It should be within the amount you are asking for, be realistic and include only eligible expenses. Grant amounts are generally determined by the funding organization. Use the dollar amount anticipated and set up a budget for your project.
Make it detailed enough to satisfy anyone’s curiosity on the question of how the money will be spent, and make sure everything adds up. The financial section is your opportunity to convince the grant organization that you have a firm understanding of managing finances and budgeting your anticipated grant money.
Use realistic numbers in your budget, remembering to include all the costs that might be associated with your project. For example, if your project includes the need for printed marketing materials, you might need the services of a graphic artist and a professional printing company, as well as postage for mailing the materials.
Here are some tips for writing this section;
After completing your draft, go through it carefully and polish it up. Edit sentences where necessary to make your ideas clear and concise. Read it aloud to yourself to hear how it flows. You will probably do a lot of rewriting here—and that’s okay.
Look for strong words to replace any weak ones. Eliminate fancy or difficult words for simpler ones. Correct all typographical, spelling, grammar, and style errors. And ensure that your completed proposal goes well in line with your original summary and outline.
Write the conclusion section, which should be about one paragraph to reiterate your request and need in just one sentence and explain how your non-profit will sustain the project when funding ends. Thank the foundation for the opportunity and include a final appeal for assistance.
In conclusion, grant awarding organizations usually prepare an application package that lists what they’re looking for in a grant proposal and you should do well to follow their guidelines. Typically a grant package will require specific information that must appear in the grant.
To effectively respond and create a grant proposal, it helps to follow the grant application requirements in order. Answer each question that is asked using the same “voice” as that found in the documents. Mirroring the verbiage in the document helps to let the organization providing the grant know that you understand the organization’s purpose.
A. flowery language.
If your grant proposal is too confusing or too difficult to understand, it may have less of a chance of being accepted. Focus on conveying information in a clear, concise way and avoid giving it a lot of embellishments. The proposal should first address what impact the business will have on the surrounding community. Identify what the business aims to do, and make an outline of projected goals the business intends to accomplish.
A simple error can wreak havoc on your proposal and may even cost you the grant because there are lots of other people applying for the same grant as you are. Special attention should be paid when reviewing the content of the proposal. A misplaced period or misspelled word can mean the end of a proposal’s consideration.
When writing your proposal, make sure you tailor our content correctly to what was demanded for by the grant organization. Asides that, your business’ outline needs to be specific and provide information on every step of the plan for growth and development. For instance, if the proposal focuses more on the existing problem than the solution the business will provide, it may not pass muster.
Budget and accounting are other things that may prevent your grant from sailing through. Make sure all the accounting work is presented accurately and in a way that makes logical sense. Review your budget to make sure it tallies with the kind of business you are proposing. Make sure that you do not overask or underask because doing each would not make you successful. Just stick with the reality.
Every industry has its own jargon and businesses are no different. However, use of these jargons will not convince your reviewer that you are smart or you are the most qualified candidate to receive the grant. As such, it is best to eliminate all internally used acronyms and jargon. Tell your story simply, from your heart.
Some foundations can be very choosy. They may demand that your grant proposal must have a certain page length, page margins, typeface, et al., be sure to follow these specifications. Even if these minor details do not seem important to you as an individual, you should know that the grant makers have their reason for making such specifications and as such, you should respect them else you run the risk of having your application tossed into the trash. Don’t go to all that work just to have your proposal rejected because of logistics.
A common mistake new entrepreneur’s make is waiting until the last minute to write and submit the proposal. Aim to finish the first draft three or four days before the deadline. This will allow plenty of time for proofreading. When submitting, make sure the proposal and application adhere to all guidelines set by the grant provider.
Most grant makers will tell you exactly what to send. Sending a lot more attachments that was demanded of you will not increase our chances of winning the grant. Again, it’s important to follow the rules. Grant makers are reading a lot of proposals, and they may view extraneous materials as an annoyance.
+44 (0)1458 253536, a beginner’s guide to funding a small business.
So, you have a business idea you want to get off the ground, but how do you secure capital to start it? To create and start a business, you must consider a physical location (if applicable), marketing, employees, products, and more. All of these costs can add up to hundreds of thousands of dollars. There are many ways to secure financing for a business of any size, including a small business. Let’s dive into what your options are.
As the name implies, zero-debt financing does not involve a business or individual going into debt to receive money. While no-debt funds are rarer, they aren’t entirely uncommon.
Many entrepreneurs pull money from their savings to utilize business capital. If you can save up a large amount of cash, this is an ideal way to fund anything, as you do not go into debt and do not owe anyone equity. However, it takes a while for most people to secure a large amount of cash for savings, so it may not be the most feasible if you want to act fast.
Early investors fund your business before it becomes a reality, and they typically come in the form of friends or family. They give up some of their savings to help your business get off the ground and usually don’t expect anything in return. Depending on how much money friends and family give you, it can secure your entire business’s startup costs without any debt!
Another way to secure financing without traditional debt is to give up equity shares. In exchange for a percentage or partnership in your business, you receive financial aid to help fund your business’s startup. However, giving up equity is a significant business decision and shouldn’t be taken lightly. Investors looking for business equity are pretty standard. Angel investors typically have a high net worth and provide large amounts of cash in exchange for a percentage of the business. Venture capitalists pay their way to become partners in promising businesses and usually help actively manage the company.
While startup grants aren’t as common, they aren’t entirely rare. A grant is essentially free money given to someone with no strings attached. Grants are commonly given to college students, first-time homebuyers, and even small business startups. Grant availability varies depending on location and business type.
Crowdfunding involves pitching a business to a group of people (typically online audiences) in exchange for help funding it. Some crowdfunding campaigns offer investors first dibs on a business’s product or service. Some funders receive a small equity percentage. Others do it for free. In many cases, it can be challenging to secure crowdfunding for startups, as it requires marketing skills and gathering outside interest.
Debt financing involves receiving money that requires repayment in the future. Debt financing comes in many forms, such as credit cards or loans.
Business loans are lump sums of money given to an entrepreneur or business startup upfront. In return, businesses must repay this loan slowly over a fixed period with interest. Banks or lending companies typically issue loans, but they can even be given by friends or family who eventually want their money back. Loans require credit checks and proof of income; securing one may be challenging for those with financial issues.
Lines of credit are similar to business loans, but instead of receiving a large sum of cash, you have access to a fixed amount of money that you can use as little or as much as you’d like. However, you must still pay it back, and interest fees will apply. Credit cards are the most common example of a line of credit. Some credit cards offer introductory interest-free periods; if a business can pay off its debt within this period, they are not charged interest.
When your business has gotten off the ground, many companies will issue client invoices, which can take months to receive funds for. Small business factoring involves getting an immediate cash flow from invoices in exchange for selling them to a finance company, typically a business working capital company. Factoring is technically short-term debt, as your business owes the factoring company until the invoices are paid. Your business will usually be charged a small percentage of the invoice cost as a fee. Factoring is a decent option for businesses that need cash flow much quicker than their clients pay invoices, as long as they don’t mind paying fees.
Small businesses are typically funded through credit lines, loans, and other debt. However, some companies can receive funds from family, early investors, startup grants, and more that do not cause a business to have debt. Exploring your options before deciding on a funding method to determine what will work best for you and your small business is essential.
You must be logged in to post a comment.
Sign up to our newsletter
9 Tips On How To Get Funding To Start Your Small Business
One of the most significant barriers to entry for many aspiring entrepreneurs is securing the necessary funding to get started. Without adequate capital, even the most innovative and promising business ideas can remain unrealized.
This financial hurdle often deters potential business owners from pursuing their dreams, as they face the challenge of covering initial costs such as inventory, equipment, marketing, and operational expenses. The lack of funds can also impact the ability to attract and retain talent, secure a suitable location, and invest in essential technology.
Overcoming this barrier requires creativity, persistence, and a willingness to explore diverse funding options, from personal savings and loans to grants and investments.
1. personal savings.
Using personal savings is the most straightforward way to fund your business. It allows you to maintain full control without taking on debt. However, it's crucial to avoid depleting your savings entirely. Ensure you still have an emergency fund to cover personal expenses for a few months.
Borrowing from friends and family can be a quick way to obtain funding. When going this route, treat it like a formal business transaction. Provide them with a solid business plan and agree on repayment terms to maintain clear expectations and avoid potential conflicts.
Trump vs. harris 2024 polls: harris leads trump in 3 surveys this week, record-breaking $75 million ransom paid to dark angels gang, 3. business loans.
Traditional business loans from banks or credit unions are a common funding source. These loans are typically more challenging to secure and often ask for a detailed business plan and good credit history. It's essential to shop around and compare terms to find the best loan for your needs.
Types of Business Loans:
Grants are an excellent source of funding because they don't need to be repaid. They are often offered by government agencies, private corporations, and nonprofit organizations. However, grants can be highly competitive and may require a detailed application process.
Where to Find Grants:
Crowdfunding platforms are gaining popularity and allow you to raise small amounts of money from a large number of people. Successful crowdfunding campaigns often provide backers with rewards or early access to products. A compelling story and robust marketing strategy are crucial for success.
Angel investors are wealthy individuals who want to give back to the entrepreneurial community and often bring valuable industry experience and connections. To attract angel investors, you need a scalable business model and a strong pitch that highlights your business's potential for high returns.
Venture capital is another form of equity financing but typically involves larger amounts of money from firms that manage pooled funds from many investors. Venture capitalists look for high-growth potential and are often involved in the management and strategic direction of the business. This option is more suitable for businesses that require significant capital to scale quickly.
Business incubators and accelerators provide not only funding but also mentorship, office space, and resources. These programs can be highly competitive but offer invaluable support and networking opportunities.
Bootstrapping involves using your own resources and revenues generated by the business to fund growth. While it may require more time and patience, bootstrapping allows you to retain complete control over your business.
The bottom line is that securing funding to start a small business requires diligence, research, and a willingness to explore various options. By leveraging a combination of the strategies mentioned above, you can overcome financial barriers and take the first steps toward launching your business. Remember, the right funding source for you depends on your business model, the amount of capital you need, and how much control you're willing to share. With a solid plan and determination, you can turn your entrepreneurial dreams into reality.
Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur’s Guide to Creating a Profitable Business and the founder of She Means Profit . As a Business Strategist for small business owners, Melissa helps women making mid-career shifts, to launch their dream businesses, and I also guide established business owners to grow their businesses to more profitably.
The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.
One Community. Many Voices. Create a free account to share your thoughts.
Our community is about connecting people through open and thoughtful conversations. We want our readers to share their views and exchange ideas and facts in a safe space.
In order to do so, please follow the posting rules in our site's Terms of Service. We've summarized some of those key rules below. Simply put, keep it civil.
Your post will be rejected if we notice that it seems to contain:
User accounts will be blocked if we notice or believe that users are engaged in:
So, how can you be a power user?
Thanks for reading our community guidelines. Please read the full list of posting rules found in our site's Terms of Service.
Negotiating your salary can be a key step in advancing your career and boosting your financial stability—but it can also be pretty intimidating. The good news is that with the right approach, it doesn’t have to be so scary. That's where a salary increase letter comes in.
Whether you're asking for a raise due to your great performance, increased responsibilities, or changes in the market, a well-crafted letter asking for salary increment can be a powerful (and smooth) way to make your case.
In this article, we'll walk you through everything you need to know about writing a salary increase letter, from understanding its purpose to tips on crafting an effective one. We'll also include sample letters and templates to help you get started. Plus, we’ve interviewed Muse Career Coach Jenn Smith , who shares her top advice on navigating this critical career move.
Need a better salary? Check out open jobs on The Muse for your next big move »
A salary increase letter is a formal document that employees use to request a raise from their employer. Unlike a salary review letter—which is typically initiated by the employer to communicate pay adjustments—a salary increase letter is written by the employee seeking a boost in compensation.
Writing a salary increase letter can be necessary for several reasons:
When writing a letter to request a salary increase, it's generally more effective to address it to your direct manager or your department’s director rather than HR. Your manager is more familiar with your work, contributions, and the value you bring to the team. They are also likely involved in budget decisions and have the authority to advocate for your raise.
Yes, writing a salary increase letter can be a formal and respectful way to request a raise. It allows you to clearly articulate your reasons, provide evidence of your achievements , and give your employer time to consider your request. Plus, a letter is a documented record of your request and can be reviewed by decision-makers at different levels of the organization.
On the other hand, having an in-person conversation can be generally more effective. “This allows you to present your case dynamically, outlining your accomplishments, contributions, and the value you bring, and respond to questions or concerns in real-time,” Smith says, adding that a direct conversation also allows for immediate feedback. “Your manager can provide insights into decision-making, share any constraints or considerations, and offer guidance.”
She also believes it’s a good idea to supplement your conversation with a follow-up email to ensure clarity and provide a reference for future discussions.
These tips will prepare you for writing an effective pay raise letter:
Conducting extensive research will strengthen your case and help you present a compelling argument.
“Research industry salary benchmarks for your role, experience level, and geographic location,” Smiths says. “Use reliable sources like industry salary surveys, compensation reports, and online salary databases.”
Additionally, be sure to understand your company's salary ranges, performance evaluation criteria, and typical raise percentages.
Timing is crucial when it comes to writing a letter requesting pay increase. Making your request at the wrong time can significantly reduce your chances of success.
“Typically, organizations have annual or semiannual performance review cycles,” Smiths says. “Discuss this with your manager before the performance review process starts so they can consider it as they begin budget conversations.”
She adds that “asking for a raise at an inappropriate time, such as during a company's financial downturn or immediately after a major organizational change or layoffs,” is a common mistake that should be avoided.
Begin your letter by setting the context for your request and remind your employer of your role within the company. Clearly state your position, tenure with the company, and the purpose of the letter.
In the main section of your letter, outline your accomplishments and contributions to the company. Highlight specific achievements, projects, or responsibilities that demonstrate your value.
Provide evidence of your impact, such as performance metrics, positive feedback from clients or colleagues, and examples of how your work has benefited the company, explaining how your contributions justify the proposed raise.
Summarize your key points and reiterate your appreciation for the opportunity to discuss your compensation. Express gratitude for the support and experiences you have gained and reiterate your commitment to the company. This positive tone reinforces your professionalism and leaves a lasting impression.
Here’s a sample letter for salary increase request to show you how these tips can be put into practice:
Alex Johnson 123 Elm Street Springfield, IL 62704 [email protected] July 25, 2024
Emma Thompson Director of Sales Innovative Tech Solutions 456 Maple Avenue Springfield, IL 62704
Dear Ms. Thompson,
I hope you are well. I am writing to formally request a review of my current salary. I have thoroughly enjoyed working at Innovative Tech Solutions over the past three years and appreciate the opportunities for growth and development that have been provided to me.
During my time here, I have consistently exceeded expectations and made significant contributions to the Sales team. For example, I spearheaded a new email marketing campaign that increased sales by 15% and successfully launched our new TechY product line, resulting in a 20% revenue boost.
In addition to my core responsibilities, I have taken on new challenges, such as leading the training program for new sales representatives and managing key client accounts, which have significantly contributed to our team's success.
Furthermore, I have undertaken several professional development activities, including completing a certification in Advanced Sales Strategies and attending workshops on market trends, which have further enhanced my skills and ability to contribute to our team.
Based on my research of industry standards and salary benchmarks for my role and experience level, I believe that an adjustment in my compensation is warranted. Therefore, I respectfully request a salary increase to $85,000. This adjustment would better reflect the value I bring to the team and align my compensation with industry standards.
I am confident this increase will further motivate me to continue delivering high-quality work and contributing to the success of Innovative Tech Solutions. I am more than willing to discuss this request in person and provide any additional information that may be required.
Thank you for considering my request and for your ongoing support.
Sincerely, Alex Johnson
Now, here's a template for a raise request letter to help guide you in drafting your own:
[Your Name] [Your Address] [Email Address] [Date]
[Recipient’s Name] [Recipient’s Title] [Company’s Name] [Company’s Address]
Dear [recipient’s name],
I hope you are well. I am writing to formally request a review of my current salary. I have thoroughly enjoyed working at [Company’s Name] over the past [number] years and appreciate the opportunities for growth and development that have been provided to me.
During my time here, I have consistently exceeded expectations and made significant contributions to the [Department] team. For example, I [List your accomplishments, using quantifiable results whenever possible, such as increased sales by 15% through a new email marketing campaign; successfully launched a new product line, resulting in a 20% revenue increase; etc.].
In addition to my core responsibilities, I have taken on new challenges, such as [List additional responsibilities].
In addition to these accomplishments, I have undertaken several professional development activities, including [certifications, courses, and training programs], which have further enhanced my skills and ability to contribute to our team.
Based on my research of industry standards and salary benchmarks for my role and experience level, I believe that an adjustment in my compensation is warranted. Therefore, I respectfully request a salary increase to [desired salary or salary range]. This adjustment would better reflect the value I bring to the team and align my compensation with industry standards.
I am confident this increase will further motivate me to continue delivering high-quality work and contributing to the success of [Company Name]. I am more than willing to discuss this request in person and provide any additional information that may be required.
Sincerely, [Your name]
Typically, you should ask for a raise once a year, ideally around your annual performance review. If you have taken on significant additional responsibilities or have had exceptional achievements, it might be appropriate to request a salary review sooner. However, be mindful of your company's financial health and the timing of your request.
Waiting for a performance review is often a good strategy, as this is a natural time for salary discussions. However, if you feel that your contributions have significantly outpaced your current compensation, you might consider requesting a meeting outside of the review cycle. Just ensure your request is well-timed and substantiated.
If a salary review is denied, consider asking for specific feedback. “Work with your manager to set clear goals—create a development plan that outlines the steps you need to receive a raise,” Smith says. “Consider discussing alternative forms of compensation, which could include bonuses, additional vacation days, flexible working arrangements, and professional development opportunities.”
Whether you opt for a formal letter via email , a direct conversation, or a combination of both, the key is to present a well-reasoned case for your increase salary request. When crafting your letter, keep these takeaways in mind:
IMAGES
VIDEO
COMMENTS
A good business plan guides you through each stage of starting and managing your business. You'll use your business plan as a roadmap for how to structure, run, and grow your new business. It's a way to think through the key elements of your business. Business plans can help you get funding or bring on new business partners.
Learn why a business plan is important, what to include, and how to write it for investors or lenders. Find out how to research your market, project your sales and expenses, and show your credibility and reputation.
Learn why you need a business plan for funding your company and what to include in it. Find out how to persuade investors or lenders with your vision, goals, financials, and market insights.
How To Write the Funding Request for Your Business Plan. What Goes Into the Funding Request? The Balance is part of the Dotdash Meredith publishing family. If you plan to seek funding, you'll want to write a funding request section in your business plan. Include an outline of your business, your financial situation, and more.
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
Step 2: Do your market research homework. The next step in writing a business plan is to conduct market research. This involves gathering information about your target market (or customer persona), your competition, and the industry as a whole. You can use a variety of research methods such as surveys, focus groups, and online research to ...
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
1. Investors Are Short On Time. If your chief goal is using your business plan to secure funding, then it means you intend on getting it in front of an investor. And if there's one thing investors are, it's busy. So keep this in mind throughout writing a business plan.
This section is the most important for most businesses, as it can make or break a lender's confidence and willingness to extend credit. Always include the following documents in the financial ...
4 tips for writing a good business plan. A few best practices apply no matter how long your business plan is or who it's for. A great business plan is clear, realistic, and based on research. Use clear and straightforward language. Avoid jargon and overly technical terms, use short sentences and paragraphs, and be specific and direct.
1. Executive Summary. While your executive summary is the first page of your business plan, it's the section you'll write last. That's because it summarizes your entire business plan into a succinct one-pager. Begin with an executive summary that introduces the reader to your business and gives them an overview of what's inside the ...
Add in the company logo and a table of contents that follows the executive summary. 2. Executive summary. Think of the executive summary as the SparkNotes version of your business plan. It should ...
There are a few key sections to include in your requests for funding. First, clearly state how much total funding you need, as well as the timeframe over which the funds will be used. Instead of grabbing a random number, give a detailed explanation of why and how the funds will be used. Also, outline any specific terms and conditions you need.
Otherwise known as bootstrapping, self-funding lets you leverage your own financial resources to support your business. Self-funding can come in the form of turning to family and friends for capital, using your savings accounts, or even tapping into your 401 (k). With self-funding, you retain complete control over the business, but you also ...
Create a financial plan. Now that you've laid out the research, goals and planning, you can use that information to forecast revenue and build a financial plan. Use any past revenue or sales ...
For many new business owners, the top motivation for writing a business plan is to secure funding. M&T has the experience and expertise to help you assemble the information that's going to be key to a successful proposal. Having a viable plan for business success can help you get the financing you need.
As they wrote, "Get your business idea off the ground by winning investors for your business through this Startup Investment Proposal. Fascinate investors with how you are going to get your business into the spotlight and explain in vivid detail your goals or target for the business." Check out the template here. 7. Simple Proposal Template
1. Venture capital: The big-league booster. Venture capital (VC) isn't just for tech giants and Silicon Valley startups. It's a viable option for various businesses with high growth potential.
1. Cover Page and Table of Contents. Your business plan for a loan application is a professional document, so be sure it looks professional. The cover page should contain the name of your business and your contact information. If you have a logo, it should go on the cover.
Fund your business. It costs money to start a business. Funding your business is one of the first — and most important — financial choices most business owners make. How you choose to fund your business could affect how you structure and run your business. Choose a funding source.
1. Bootstrapping. Type of funding: Self. Bootstrapping is one of the funding sources that many business owners choose when starting their venture. In fact, 73% of business owners plan to self-fund their business this year. When you bootstrap, you use personal funds, such as savings or credit cards, to jump-start your business.
Common sections are: executive summary, company overview, products and services, market analysis, marketing and sales plan, operational plan, and management team. If you are applying for a loan ...
To create an effective business proposal that persuades the recipient to take action, include these key components: Title page and table of contents: Begin with a professional title page that ...
6. Be logical. Think like a banker and write what they would want to see. 7. Have a strong management team. Make sure it has good credentials and expertise.
6. Write the first draft. After having ensured that the content of your proposal matches the requirements of the grant issuer, start writing your first draft by expanding each point in your outline. This first draft doesn't have to look good or perfect—it's a draft and you can polish it later.
While startup grants aren't as common, they aren't entirely rare. A grant is essentially free money given to someone with no strings attached. Grants are commonly given to college students, first-time homebuyers, and even small business startups. Grant availability varies depending on location and business type. Crowdfunding
Types of Business Loans: SBA Loans: Backed by the Small Business Administration, these loans offer favorable terms and lower interest rates. Term Loans: These are lump-sum loans repaid over a ...
How to write a salary increase letter. These tips will prepare you for writing an effective pay raise letter: 1. Research salary benchmarks. Conducting extensive research will strengthen your case and help you present a compelling argument. "Research industry salary benchmarks for your role, experience level, and geographic location ...
A business plan can help you get funding, bring in new business partners, or serve as a roadmap for each stage of starting and managing your business. During this two-part online class, we will guide you in creating your own business plan. We will cover all the elements of writing a plan including the executive summary, company description, market analysis, competitive analysis, S.W.O.T ...