Business & Life Skills

How To Get Funding For Your Small Business

By cjliu | March 11, 2020

CJ Liu interviews Kedma Ough, MBA on her book “Target Funding: A Proven System to Get the Money & Resources You Need to Start or Grow a Business.” Kedma shares her story of being a serial entrepreneur and how a personal break up left her in bankruptcy. She shares how she got back on her feet again through using creativity, intuition, and tenacity. Now, she is a nationally renowned business coach and winner of SBA’s Small Business Champion of the Year Award. While Kedma supports a variety of businesses, many of her clients fall into three categories, each with different funding challenges.

Three Categories of Funding Challenges

1) Inventors that solve everyday problems (e.g.- great pot scrubber). Inventors run into a variety of financial barriers. First, they need a patent test, which can run upwards of $2,000. Second, they need to create a prototype, and to assess market viability. Kedma has helped inventors find money to move through these two costly stages through working with university students on capstone projects, and through licensing deals. Kedma also offers a patent resource for $250.

2) Tech driven web application businesses. In addition to inventor ideas, tech startups can work with groups that help with $100k in feasibility testing, and $1 million in testing ideas without taking a position (SBIR.gov). Kedma shares how she was able to cover one of the biggest expenses, renting office space, from a local tax credit. Last, Kedma shares getting new hires by going to job training sites. These sites often fund placing a recently trained employee into your organization when you are seeking to hire new employees.

3) Home service businesses that are scaling up (e.g.- pest control business that wants to expand). Many companies hit an inflection point. Business is growing and they need to expand through new hires, new equipment, additional office space, etc. Many coaches suggest a “go big or go home” idea. Kedma believes in a slower approach and one that maps to business metrics. With her clients, Kedma asks them to come up with a prioritized list of expansion needs with timing and for them to invest incrementally over time.

Practical Examples CJ and Kedma Discuss

Buying equipment/new hires: Kedma talks about a company wanting to buy a $10,000 piece of equipment. She would approach it by looking at how they could break even for buying this machine. If the cost of the machine us $10,000, and they charge $100 charged per client, they would need 100 clients to break even. So to justify the cost of this machine, the business would need to figure out how to get 100 additional clients. She suggests lease options as a way to test the waters.
Building out a website: Kedma shares inexpensive resources such as upwork.com for website design and outsourcing work.
When to get a loan: Kedma thinks lines of credits make sense to cover accounts receivable issues and loans on items that have collateral.