Before you ever sell your first product or service, you need money to create and manufacture the product, and money to market your service or product to potential customers.  That is where start-up or seed money comes into play.

First, there are many ways to secure start up money.  Your business could obtain start up money from:

• Your own pocket – If you have capital available to put into your business idea, always start with your own funds.  While you should not take out 2^nd and 3^rd mortgages on your home, other investments that have grown and paid good dividends can be used to help your business take off.  Remember, investing yourself gives all of the returns to you as well. 

• Loans and Grants – The Small Business Association (SBA) has a guaranteed loan program for small businesses where you could borrow tens of thousands, and in rare cases, even hundreds of thousands of dollars.  The U.S. government also has thousands of grant monies available for small businesses.

• Investors – Borrow money from friends and family.  Borrow from other investors who have faith in your business idea.  Venture capitalists are also known to provide seed money to good business ideas.

Once you have the appropriate seed money in hand, what is the best way to use the money?  

Your Beginning Operations

Your new seed money should be used wisely to tweak your product(s) and know your customers.  Perform as much market research as you can afford to do.  Do it yourself or use market research firms who specialize in obtaining good data and helping to formulate proper questionnaires.  The better you know your customers and their buying habits, the better you will be able to develop a product that sells and market it to the right demographic.

Use seed money to conduct your product research and begin manufacturing operations.  Your business won’t sell anything if it has nothing to sell.

Your seed money should also be used to market, market, market.  Get your business name branded and known by your target audience.  Develop your marketing plan and start advertising your products and services.  You need customers, so let them know how they need you.

Getting a new business off the ground and running at full speed is not an easy task.  But money from the right sources makes it easier.  The more you can know about your customers and products, the better situated your business will be to hit the ground running.