Venture Capital

Most people who start their own business rely on friends and family for capital. The good new is if you are starting your own freelance writing business you don’t need much in the way of capital. Here are some basic start up expenses to consider:

Your computer
A printer/fax/copy machine
Paper supplies
Advertising dollars

Of these, the latter will cost the most… unless you take advantage of the multiple sources of free advertising currently available on the Web today.

Too many small business owners get caught up in the trap of believing they have to have an SBA loan or other source of formal venture capital to get their business off the ground. The reality is most entrepreneurs start new companies with funds from personal accounts, including checking accounts, credit cards and money from friends and family.
Most lenders are hesitant to give a new business money until it has proven its worthiness (meaning its ability to make money). You are much more likely to get money once you have set up a business that is producing some income, and you want to expand it, than you are to get money when first starting out.

In the early stages of your business, funds from friends and family may be vital to your success. Family and friends can help pool their resources and help you get your business off the ground.

What you’ll want to do though, is treat your friends and family like formal investors. Let them know exactly what they’ll get from the deal and when. You should consider paying any funds you receive from friends or family back with interest.

But, you should also be realistic about your goals and expectations. Give yourself enough time to get your business off the ground. Most businesses don’t make money in the first few months of operations.

Freelance writing is the perfect home business for someone with little venture capital to start a home business. At most you may pay:

- $500-1200 for a new computer
- $100 for a printer/copier
- $200-600 for memberships to writers groups or paid work sites
- $400 for paper supplies

You can easily start a writing business for less than $3k. To advertise cheaply and inexpensively, invest in some cheap business cards (or make your own) and have your friends and family pass them around. You are likely to land your first clients through networking and relationship building. Do a good job, and they’ll refer you to more friends.

After you establish your business, you can commit more funds to advertising and promotions. (Though you may find you don’t have to!)