You need a business plan to approach any investor or lender. This is where ‘know how’ comes in. You must know how you plan to run your business and be able to communicate this knowledge in an acceptable and convincing form to your potential investor or lender. There are business plan outlines to follow at every bookstore or library. Do not skip this crucial step.
‘Know where’ is the next key component. There are seven types of investors and/or lenders you should consider: 1) You, your family and close friends, 2) sellers, 3) banks, 4) various governmental or non-profit entities, 5) your suppliers, 6) your customers, and 7) other private individuals, including venture capitalists.