WAYS TO FIND ACCESS TO CAPITAL TO START A BUSINESS IN MEXICO
If You Need Money To Start Your Own Company You Must Not Miss This Post
You have a great idea, the truth: it is a revolutionary idea to start a business, but unfortunately you do not have the money to carry it out. Personal business is a big risk and it is almost impossible if you have no capital, but you should not give up your dreams for lack of money. In today’s post we will talk about all those ways to find access to capital to start a business in Mexico.
If you think that your idea is good or that the market where you develop can give you many dividends, do not give up; Gets capital and begin to realize the dream of own business. Not every beginning is easy, the great ones like Bill Gates or Steve Jobs started from very low, they only had a great idea and much ambition and with that they were enough to convince too many that to invest in them would bear good fruit and yes that they gave them…
First of all you cannot go looking for capital without a pre-established and developed idea. Many think that if they had money they would have their own business, but when capital comes they run out of ideas. To begin, you must be clear of what your business is about and some key details of which we will speak next:
Before asking for some type of financing to start any type of business you have to have some clear things. For the above we will talk about the first steps you must take to set up your own business.
FIRST: Have a great idea
You cannot say I want my own business, I’m going to look for capital and do it, without even knowing what kind of business you want to do. Creating a business is born from a great idea. If you already have yours, jump to the second step, but you can use the following tips to have that great idea:
Look for an unmet need; something that consumers want but cannot get. Part of the above and think with what service or product you can meet the needs of consumers.
Do not copy ideas, try to think of your business as something original, a company that offers solutions that others do not. Be novel.
If this fails and you want to dedicate yourself to a type of company already exploited, try to add something different.
Look for ideas online, there are many people who want to inspire you and tell you their success stories. All information is good and can give you accurate clues for setting up a business.
And finally think of something that you are passionate about, if what you are going to dedicate your life, time and effort is something you love is probably closer to success than you imagine.
SECOND: You already have your idea, analyze it!
You cannot get into an idea and think that’s the million dollar idea, first of all you should analyze all the variables. Who will be your competition, if it is a productive market, if there are many similar products, if you really have demand for your product or service, but absolutely everything at this point is transcendental.
Thoroughly analyze the virtues and flaws of your idea. Visit to what can be your future competition and investigate if it really is worth venturing into that area of development.
Basically it is about evaluating the chances of success of your business and your great idea.
THIRD: think of a name
The name of your business is very important, think big and study the implications that this has for marketing.
When you name your business, you are closer to materializing it. It is a way to approach your dream in a positive way.
FOURTH: Think about your location
Think about where the best place to start your business is, and not only talk about the area or region of your country, but also how to position them in a more global environment: the internet. Think big: social networks, web pages, mobile applications do not need a place to have a business just a computer, internet access and imagination and talent.
FIFTH: establish your audience and consumers
It is fundamental to know what kind of people you think your products and services will serve, once you know how your consumer is, it is much easier to be empathetic and to attract them.
Your future clients are the most important at the moment, study them properly they will determine the success of your company.
SIXTH: analyze competition and the market
You have to analyze everything: your competitors, your market and even your potential consumers. Watch how all these elements move near the area where you want to develop yourself. As you study the competition, the market, your customers and everything related to the field where you want to venture new ideas may be emerging and you can also find new ways to run your own business.
This leads us to the next step, drawing up a business plan.
SEVENTH: preparation of a business plan
This is the moment of truth, to sit down and establish your own business plan. A business plan allows you to clarify your ideas. Along with the above helps you to organize all your ideas and information in a way that is attractive for potential investors.
A good business plan should have a definition of where your business is going to, as well as specify your products and services. You must also have a marketing, operations and human resources plan. The previous plans specify what strategies to implement to introduce you, what you will require to carry out your operations and what type of work equipment and human resources you need to carry out your business.
And finally a financial plan, this is fundamental; At this point you must calculate how much investment you need, the projection of income and egress, is practically all the financial evaluation of the project.
EIGHTH: the great step to materialize your dream business; The search for financing
Here is the key point: financing. Many do not have the capital to start their business, and looking for money to get their business moving does not seem easy. Despite that, the above is not impossible. You can get investors or credits that allow you to take the first step towards establishing your own business.
There are various forms of financing, including:
Friends and family, this is the first financing that usually comes to the entrepreneur. Usually, a friend or relative can help the first step. The good thing about this type of financing is that there is usually no interest or if there are very low interest rates. However, turning to friends or family is not an option that all entrepreneurs have and end up going to banks and other types of financial institutions.
You can also find investors who are interested in your products or services.
Having a debt involves a great deal of responsibility, before you resort to a loan, you should study and analyze if your business is really viable; And determine how long you can repay that loan or credit. Many companies close as a result of not being able to face debts incurred and without much analysis of the situation.
Having a business of your own is worth it, but to have it you have to be brave and risk losing and sometimes getting into debt. However, I will tell you why having your own business is a good choice.
Many are afraid when it comes to leaving the known; Our job for an unknown risk and start our own business. Is not easy; Represents many risks, but being your own boss gives you really great advantages.
You have control of your total income, nothing to sell thousands of pesos in products for a company and receive a meager salary. You have control of your dividends and you can keep investing to keep growing fast.
You choose the direction of your company, you have the right and freedom to choose the path you want your company to take. Basically you are the creator of your brand and you present it as you see fit. Having creative control is something that is valued, because when you work for someone normally your opinions are not more relevant, now it is simple you carry the helm.
You are 100% responsible for your success, you do not need a boss to realize the great work you do to ascend. You work hard and you see the fruits. You are the one who will work with your circumstances to find success in the most effective way.
You are the owner of your time, and you decide how to invest it.
You will learn much more than you believe and every day there will be a new challenge, that is; That every day you will have a reason to excel.
And finally: you just cannot get fired.
It is important before you resort to applying for a loan, credit or any type of debt to think very well and plan a good proposal. You have to prove that your business is serious, professional and viable. In addition to the above you must make clear all aspects of legality, i.e.; that you offer to pay for the loan granted.
Another fundamental aspect is your bank record, it has to be favorable. Keep up to date all your credit card payments and any other loan you request. Not only your banking information is fundamental, but your good work history; That your investor trusted in your work allows you to invest larger sums of money.
If you already meet the above requirements I will tell you how you can get the capital you need to open your own business.
You can use your personal savings
This is the healthiest source of funding that can be, if you have to start without debt you will be great, but not all have savings. If the above is simply not an option for you then we can resort to the second way to raise capital for your own business: friends, family or acquaintances.
FFF, acronyms of the English words: Family, Friends and Fools
It is the commonly known loan to friends, family or acquaintances. Basically it is one of the most recommended funding sources. This is due to the fact that interest is sometimes non-existent or very low, payment facilities are greater and flexibility is also.
Only one detail can make this funding source not work: your reputation. If people perceive you as: hardworking, responsible and fulfilling person, they will not hesitate to invest your money in your business, but if the case is contrary it is very difficult to obtain this type of capital.
If you do not have friends, family or any fool that wants to invest in your business, there is a third option: bank loans.
It is a highly recommended source of funding, but will only work if you have a good credit record and of course a good project. Banks will be more than happy to invest their money if they are going to make a good return.
Therefore it is important if you opt for this option that you read the small print well and make everything clear, look for a lawyer or an expert who advises you and reads your contract well.
You can find a good credit with a low interest, visits several banks do not decide for the first.
Another favorable point of bank loans is that they give you ample time to pay, this can be a year or up to five years or more. If you can get this type of financing do not go wrong with the bank, this can close the doors for future loans so do not take very high debts that you cannot afford.
I do not recommend using this type of financing, the interest is very high. However, if you think that you can quickly recover the money you are borrowing and you can handle the total debt quickly, you can do so. You have to analyze very well all the items before asking for a credit no matter because means of financing, the debts can lead to bankruptcy but you know how to administer.
There are other, more specific, methods for obtaining capital such as:
Entity that provides financial support on a temporary basis, are simple credits to start with the initial stage of your business. They are basically as their name says: capital semilla, the little help you need to get started.
If you want to opt for seed capital you must first of all incubate in the National Business Incubation System of the Ministry of Economy, you can access more information at: www.capitalsemilla.org.mx.
The amount you can afford is around $ 50,000 to $ 500,000, if your business includes high technologies you can get up to $ 1,500,000 however you have to have your 30% of the capital needed since this service only supports you with 70% of the necessary capital.
The loan is canceled in a period of 36 to 48 months, and can extend the payment for a period of up to nine months.
Risk Capital or also known as Venture Capital, are funds that grant capital to companies that are starting. The contributions do not exceed $ 5,000,000 and require businesses that receive it to have annual returns of between 60% and 80%
You can access www.investomex.com and receive more information.
Private Equity or Private Equity are these mega contributions that can exceed $ 5,000,000. However, the company can enjoy this type of investments if it already has approximately three or four years of operation, they have to be consolidated companies.
It basically seeks to make a large capital injection and achieve growth above 100% per year. You can find information on this at www.amexcap.com.
This is a more subjective and collective means of financing. Basically many small investors are looking for the network to help you start your business. It works as a system of donations, however, the entrepreneur offers a reward for the investment as being able to acquire the first prototype of your product or until receiving a specific service.
It is a matter of receiving little, but of many parts. Typically this type of funding appeals to the emotional, to empathize with others and to look for someone who can help you start.
You can find information about it at http://fondeadora.mx.
Banks have all kinds of loans and credit services that can provide you. It will depend a lot on the type of business you want to start and your credit record on the amount of capital that you can approve.
You can get simple credits, these are small loans in the medium and long term. These are for contracts and give you time to pay for up to 15 years.
There are also credits in current account, the credits of Habilitation or defect, refractory credits and other many credit products that your bank can offer you. Advise on the financial institution of your preference.
SOFOMES or Multi-purpose Financial Companies
Basically they are financial intermediaries, who provide a leasing service with option to purchase the property that is rented. This type of entity not only finances small businesses but also people.
This type of entity can finance: vehicles, machinery, technology, office equipment, computers, telecommunications and many others. They are managed with guarantees of the financial, real estate or even compound type.
In itself it is not a form of financing of capital but of equipment and resources. It is a contract that determines that you can temporarily enjoy an object or, but you cannot buy it as in the previous type of financing. It would be practically like renting something you need, but you do not have the chances of acquiring it later.
This is more or less similar to the previous idea. A contract is made where it is determined that the person can use a good for a certain period of time, after finishing the time the person has the right to buy.
Normally this type of financing is used to obtain resources and machinery, a negative point of this type of lease is that it is obliged to pay all equipment maintenance expenses.
Factoring is a source of financing, but not capital but to settle accounts payable. That is to say; you have an invoice to pay, however, you do not have the capital to face the debt you give your invoice to the factoring company and they cancel it for you. The debt is with the factoring company that you can pay in a certain period.
This is a form of financing that can be applied when you need certain raw materials that you do not have to carry out a job, purchases, you pay with factoring and then when this finishes the job you cancel the debt.
This is an initiative of the government that seeks the promotion of new business. Very similar to seed capital; Are temporary credits that are granted to those small and medium enterprises that need promotion in some way.
These resources or funds are managed by intermediary organizations. It is worth to find out about it on the page: www.fondopyme.gob.mx.
This is one of the most complicated funding sources out there. You have an idea, a talent, but you do not have the money to develop it then you do: you are looking for a partner who invests capital in you and shares the profits.
It’s a simple business model, but you have to make sure you get it and give it what’s right. Many are desperate for capital and accept little beneficial deals.
If your dream is to have your own business do not give up, the most difficult thing to start a business is to have the idea of a million dollars if you have it sooner than later you will find an angel investor.