Kody Wirth is a content writer and SEO specialist for Palo Alto Software—the creator's of Bplans and LivePlan. He has 3+ years experience covering small business topics and runs a part-time content writing service in his spare time.
Most healthy businesses will need funding or financing at some point. Whether it’s to cover startup costs, help with major equipment purchases, or fuel growth with additional capital—it’s a common and often necessary step.
The reality is that, like so many things in business, your path to funding fully depends on the state of your business. Age, position, performance, market opportunities, your team, etc., will inform your funding search and how you’ll prepare to get it.
While your funding journey will be unique to you, there are some key steps that you should take to prepare for whatever funding option you choose.
1. Determine if you really need funding
You need to ask yourself one simple question. “Am I ready to take on funding?” To answer that question you need to consider why you need funding, how you’ll manage it, and what you’ll do without it.
Dig Deeper: Do you really need funding and are you ready for it?
2. Find out how much funding you should raise
Lenders and investors will want to know how much funding you’re asking for. You need to be sure that the number you land on is not too little, not too much, and that it aligns with your current strategy.
Dig Deeper: How much funding do you need?
3. Consider your funding options
There are numerous funding and financing options available to small businesses and entrepreneurs. You need to carefully consider what funding method serves your business best and what it will take to get it.
Dig Deeper: Common funding and financing options explained
4. Write your business plan
You need a business plan to get funding. Most lenders will require it and investors will want to see your plan in order to quickly assess the state of your business.
Dig Deeper: Step-by-step guide for writing a business plan
5. Create your pitch
There will come a time when you need to convince someone to fund your business. To do so, you need to have a tight elevator pitch and a captivating pitch deck to back it up.
Luckily, we have plenty of resources to help you create everything you need.
Dig Deeper: Business pitching guide
What if you’re a nonprofit?
While the steps outlined above are applicable to nonprofit organizations, there are unique considerations you’ll need to account for to successfully raise funds.
Dig Deeper: How to get funding for your nonprofit
How to improve your chances of getting funding
Following the five steps we laid out, unfortunately, doesn’t guarantee that you’ll get funding. There are just too many variables that can swing your chances in a positive or negative direction.
However, we do have some additional tips and resources that may help improve your chances.
Small business funding and pitching templates
Free resources to help you complete the steps required to prepare your business for funding.
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