The District Chronicles

Issue date: 10/18/09 Section: Business

There are several ways to get the start up capital you need to start your business.

Research has shown that it was in times of a downtrodden economy when many of our country's largest and most prosperous corporations were formed.  Recognizing this, the Congressional Black Caucus Foundation (CBCF) has developed the CBCF Entrepreneurship Series, a three-part educational series to encourage entrepreneurship and educate future business leaders on best practices for developing and growing a successful business venture.

I was an opening speaker with Congresswoman Barbara Lee at the inaugural workshop series at the 2009 CBCF Annual Legislative Conference held last month in Washington, DC. 

As the economy continues to struggle and many people look to get rich working from home, two questions usually come up: how can I do it and how much business startup capital is required? The typical entrepreneur can get started on anything from no money down, knocking on doors for work, to less than $1,000. Today, many Fortune 1,000 CEOs launched businesses with $10,000 or less. And more than a third of those CEO boot-strappers started with less than $1,000. 

Realistically, success requires written business plans calculating the amount of capital needed to launch and sustain your business initially for six months or more.  It is advisable to include a financial cushion into estimates such as payroll, supplier obligations, loan payments, advertising, rent, furniture, utilities, insurance, licenses fees, sales taxes, community memberships, and salary allowances for living expenses.

If your small business consists of retail operations, determining the amount of initial investment is contingent upon the estimated projected annual sales volume. The startup projects should be based on up-to-date market research within retail targeted sectors, i.e. organic dog foods or home-made holiday decorations.  A major difference between manufacturing and retail ventures focuses on the initial scale of investments going toward machinery, equipment, or raw materials that may be used for several years such as powder coating or precision machine tools.

Alternatively, service firms generally require, neither merchandise inventory nor large equipment investments. The service venture offers the lowest investment to market entry. This fact accounts for the U.S. Labor Department occupational statics reporting the service industry will continue to expand for the next 10 years.

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