You have to speculate to accumulate, and starting a company definitely proves that rule. Often, people looking to open a business need to invest in some start-up equipment or consumables and those items can be costly. The long term shows promise, but having a solid foundation to open your business is important. So just what are the options for finding enough funds to get your company off the ground?

The most logical people to turn to when you're in need of money are family and friends, as these are individuals who know you and how you feel about where you're going with your business ideas. Also, they're going to take a personal interest in your success. The problem with accepting funding from family and friends is that they're often to close to you - which are why they lend or give you money in the first place. Misfortune with your new business can leave you with bad relationships. Another reason why friends and family aren't the best option for funding is that they may not know much about business in the first place, and won't be able to provide you with outside advice that you might receive from other investors.

Before accepting money, be sure to have a frank discussion on what will happen if the business fails. Be sure that you have a backup plan for repaying loans. Friends often say, "Don't worry about it; pay me back when you can." In reality, if your company fails, your friendships could be damaged by your inability to pay. Finally, if you do accept loans or donations from friends and relatives, be sure to document them as if they were from strangers. Should you later decide to seek venture capital or bank loans, those officials will want to see a paper trail.

Private investors are another option. Venture capital operations tend to deal with more established companies, but "angels" are often willing to take a chance on a brand new startup. However, an angel is not a smiling benefactor waiting to rain down money as a gift. Angels are shrewd investors who expect a solid return on their investment. A well-crafted business plan and excellent negotiating skills are absolutely required to secure funding from an angel.

Bank loans are another possibility. However, banks absolutely demand a solid paperwork trail. They are generally reluctant to invest in brand new businesses unless they are backed by impeccable personal credit. Even then, you must be prepared to demonstrate hard numbers as opposed to projections. Signed contracts from customers, a lot of collateral, and a willingness to forgo your own salary can all help to convince a bank.

Do not overlook creative means of financing your new venture. In many cases, you can start operations on a shoestring, and gradually build your company by re-investing your profits. This works best for companies that require little or no inventory and are, at least initially, run from a home office rather than a shop-front. You may be able to tap into your retirement fund or equity in your home for startup capital. Credit cards are an option, but should be used sparingly. Talk with the Small Business Service about their financing programs. There are numerous books written about starting a business, you might even find one about your particular niche, Amazon and Waterstones both have very comprehensive business sections.

Raising start up capital can be difficult. However, by looking creatively at the problem, writing a sound business plan, and considering every available source of funding, it is possible to find the money for almost any new business venture. Patience and a sense of humor are invaluable.