How to Finance Your Business for Nurse Entrepreneurs
“A resourceful person will always make opportunity fit his or her needs.” – Napoleon Hill, author of Think and Grow Rich
How to Finance Your Business for Nurse Entrepreneurs
A primary concern of nurse entrepreneurs is how much is it going to cost to start my business, and how am I going to come up with the money? Many of us believe if we had enough money, our great idea would be very successful. Entrepreneurship requires work and most importantly, entrepreneurship requires resourcefulness. There is always opportunity, and here are a variety of resourceful ways to finance your business.
Develop Your Capitalization Strategy
Capitalization strategies help you determine the best funding resources at each stage of your business. Idea/Concept, Start-up, Growth, Maturity, Expansion or Decline. This looks much like Erikson’s Eight Stages of Man, doesn’t it? And it’s actually good to think of your business in this way because many of the characteristics within each stage of life correlates well to the business life cycle.
- Capitalize your new business by getting extra cash from your current job and/or having a second job. Many entrepreneurs do just that. I have maintained a steady stream of income by taking work, that I once did in a full time position, and offering to do consulting on a part-time basis from my home. For the past 9 years, this income has supported, and supplemented income, while working on two business start-ups.
- Equity financing is where money is received in exchange for part ownership of the business. Before agreeing to equity financing, think about how much control and how much ownership you are willing to give. This is especially popular in the technology sector.
- Debt financing refers to making a loan and paying it back with interest. It doesn’t involve company ownership. Sources of loans include banks, commercial lenders, friends, family and your personal credit card.
- Crowdfunding is an alternative form of financing that involves a large group of people, typically over the internet, that funds the project or venture. There are hundreds of crowdfunding companies with varying ways to award the cash donors. Crowdfunding has been used to fund a wide range of for-profit entrepreneurial ventures such as artistic and creative projects, medical expenses, travel, or community-oriented social entrepreneurship projects.
- Angel Investors are a private financing sources that are informal investors. Along with family and friends, they are the largest providers of early stage financing. They may be next door neighbors or affiliated in some way with your business, (or not). There is no typical angel. Angels don’t advertise, and are most likely found by networking. Find good networkers and you are likely to hear about angels.
- Business Plan Contests / Accelerators / Incubators involve private organizations and many educational institutions as part of their management programs. They are a forum that provides visibility, and opportunity to entrepreneurs that are “investor ready” and can deliver their pitch to start, accelerate and grow their business.
- Grants have strict stipulations and criteria. Numerous grants are available from the federal government, state governments, foundations, and private sources. A directory listing for most of the grants available in the United States is published by the federal Office of Management and Budget.
Keep in mind that initial financing is the most difficult to secure and over 90% of start-up money comes from private resources. As an example, Comfort Keepers began in 1998 when Kris Clum, a registered nurse working in home health care, discovered firsthand the need for someone to assist her patients with their non-medical needs. Kris and her entrepreneurial husband Jerry maxed out multiple credit cards to start and keep their senior care business open. They sold their first franchise in 1999 and today, the company they established, has over 700 franchises worldwide. I know this because my husband Lou and I owned one of those franchises for several years.
For every success in entrepreneurship, there are multiple failures. Understanding the varieties of ways to finance your business will give you a framework in which to determine the size of your launch, and perhaps staging your launch. I began Unconventional Nurse® as a blogger, before I wrote my book, established workshops, and coaching. Starting business as a consultant is less costly that starting business in a clinical practice setting. Give thought to your capitalization strategy.
The National Nurses in Business Association, provides multiple resources that helps nurses plan, start, grow, and manage their own business. The NNBA recently added a business planning tool that greatly assists nurses in calculating their start-up costs. The Start-up Cost Calculator for Nurse’s Business allows you to find out how much cash you’ll need to launch your nurse business and keep it running until it becomes profitable. Additionally, nurses have the option to receive a customized print out of their results, by having it directly sent to their email! I highly recommend attending NNBA’s annual educational conference on Nurse Entrepreneurship & Career Alternatives. This year’s theme is “Empowering Nurses Through Entrepreneurship” and you’ll learn best practices in nurse entrepreneurship in a room filled with like-minded nurses. The mixed agenda format, networking, and the accessibility to nationally acclaimed nurse speakers and business owners makes this an amazing and transformative weekend.
© Michelle Podlesni, 2017, Unconventional Nurse®. All rights reserved.
