In a recent issue of Entrepreneur Magazine, Kate Lister's "The $48,000 question" article provides some interesting statistics around the financing of business start-ups. The article points out that there is not a massive set of data points to collect the information on how businesses were initially funded. The closest report that sheds light on this topic is a study that is currently being analyzed by the University of Michigan which is following 1200 companies that have started up since 2005. That being said, I think a study of 1200 companies does provide a decent amount of data points to start coming to conclusions. Here are the shocking revelations: More than 80 percent of these companies were funded by owner savings, personal loans, and credit cards and less than 5 percent of companies were collectively funded by the SBA, venture capital, or angel investors.
As business brokers that assist people in buying a business, I can directly relate to this article. When I started my company in 2003, I did exactly what this article suggests, used my retirement funds to escape the bureaucracy of a large public company - without the use of a bank. As someone that works with individuals daily in regards to buying a business, entrepreneurs deserve credit for taking risks in the pursuit to build and grow a company that not only puts food on their table, but creates jobs for others. As the study shows, these business owners are not playing with monopoly money. These entrepreneurs are putting their hard earned money at risk to pursue their dream. I salute all of you business owners for believing in yourselves!
Written by: Kipp A. Krukowski, MBA, CBI, CMEA and Owner of Confidential Business Sale, Inc. (www.BrokersBusiness.com)
Article Source: http://EzineArticles.com/?expert=Kipp_Krukowski
