It is sometimes harder to define the deliverable when you own a service-related company.
Selling tangible products is easier both to market and to finance with small business funding options. Here are some tips for small business funding for service-related companies.
Small Business Funding and Your Service Business
Small service-related businesses may be discriminated against when they seek small business funding. Often characterized as slow to grow, small service companies may struggle to get help in the form of capital over more product-centric companies.
To overcome any objections, service businesses must define a clear-cut customer value proposition to secure small business funding. Consultants are often selling their intellectual capital, so defining the value add can be harder to discern. That makes it more likely that investors may be concerned with the systematization of service deliverables and the scalability of the company long-term.
Some of the small business funding options for entrepreneurs ready to launch a service organization include:
Bootstrapping your 401(k) funding, using a Rollovers as Business Start-Ups (ROBS) strategy. This innovative funding solution, first introduced by Benetrends in 1983, allows entrepreneurs to use retirement monies to start or buy a business without being hit by early withdrawal or tax penalties. ROBS funding isn’t a loan, so there's no repayment, and your credit score isn't contingent upon getting the funds. Although not a complex process, a ROBS must meet stringent governmental guidelines, so it's best to work with a funding provider with industry expertise.
The Small Business Administration has loans and grants for which you may be eligible. You must meet a certain standard (ie credit score), have adequate cash reserves, and you need to find a lender who is looking to invest in your type of business.
It’s a good idea to talk with a funding advisor on the types of funding and small business loans for which you may qualify. Benetrends has abundant resources for service-related small business start-ups.
Download Innovative Funding Strategies For Entrepreneurs to learn about ways Bentrends can help you launch your venture.
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