Advice You - Business

The number one question I get asked as a small business start-up coach is: Where do I get start-up cash?

I'm always glad when my clients ask me this question. If they are asking this question, it is a sure sign that they are serious about taking financial responsibility for start it.

Not All

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

Money Is the Same

There are two types of start-up financing: debt and equity. Consider what type is right for you.

Debt Financing is the use of borrowed money to finance a business. Any money you borrow is considered debt financing.

Sources of debt financing loans are many and varied: ba

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

nks, savings and loans, credit unions, commercial finance companies, and the U.S. Small Business Administration (SBA) are the most common. Loans from family and friends are also considered debt financing, even when there is no interest attached.

Debt financing loans are relatively small and s

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

hort in term and are awarded based on your guarantee of repayment from your personal assets and equity. Debt financing is often the financial strategy of choice for the start-up stage of businesses.

Equity financing is any form of financing that is based on the equity of your business. In th

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

is type of financing, the financial institution provides money in return for a share of your business's profits. This essentially means that you will be selling a portion of your company in order to receive funds.

Venture capitalist firms, business angels, and other professional equity fundin

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

firms are the standard sources for equity financing. Handled correctly, loans from friends and family could be considered a source of non-professional equity funding.

Equity financing involves stock options, and is usually a larger, longer-term investment than debt financing. Because of thi

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

s, equity financing is more often considered in the growth stage of businesses.

7 Main Sources of Funding for Small Business Start-ups

1. You

Investors are more willing to invest in your start-up when they see that you have put your own money on the line. So the first place to look for mon

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

ey when starting up a business is your own pocket.

Personal Assets

According to the SBA, 57% of entrepreneurs dip into personal or family savings to pay for their company's launch. If you decide to use your own money, don't use it all. This will protect you from eating Ramen noodles for the

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

rest of your life, give you great experience in borrowing money, and build your business credit.

A Job

There's no reason why you can't get an outside job to fund your start-up. In fact, most people do. This will ensure that there will never be a time when you are without money coming in an

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

d will help take most of the stress and risk out of starting up.

Credit Cards

If you are going to use plastic, shop around for the lowest interest rate available.

2. Friends and Family

Money from friends and family is the most common source of non-professional funding for small business st

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

rt-ups. Here, the biggest advantage is the same as the biggest disadvantage: You know these people. Unspoken needs and attachments to outcome may cause stress that would warrant steering away from this type of funding.

3. Angel Investors

An angel investor is someone who invests in a busine

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

ss venture, providing capital for start-up or expansion. Angels are affluent individuals, often entrepreneurs themselves, who make high-risk investments with new companies for the hope of high rates of return on their money. They are often the first investors in a company, adding value throug

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

h their contacts and expertise. Unlike venture capitalists, angels typically do not pool money in a professionally-managed fund. Rather, angel investors often organize themselves in angel networks or angel groups to share research and pool investment capital.

4. Business Partners

There are

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

two kinds of partners to consider for your business: silent and working. A silent partner is someone who contributes capital for a portion of the business, yet is generally not involved in the operation of the business. A working partner is someone who contributes not only capital for a por

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

tion of the business but also skills and labor in day-to-day operations.

5. Commercial Loans

If you are launching a new business, chances are good that there will be a commercial bank loan somewhere in your future. However, most commercial loans go to small businesses that are already showi

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

g a profitable track record. Banks finance 12% of all small business start-ups, according to a recent SBA study. Banks consider financing individuals with a solid credit history, related entrepreneurial experience, and collateral (real estate and equipment). Banks require a formal business p

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

lan. They also take into consideration whether you are investing your own money in your start-up before giving you a loan.

6. Seed Funding Firms

Seed funding firms, also called incubators, are designed to encourage entrepreneurship and nurture business ideas or new technologies to help them

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

become attractive to venture capitalists. An incubator typically provides physical space and some or all of these services: meeting areas, office space, equipment, secretarial services, accounting services, research libraries, legal services, and technical services. Incubators involve a mix

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

of advice, service and support to help new businesses develop and grow.

7. Venture Capital Funds

Venture capital is a type of private equity funding typically provided to new growth businesses by professional, institutionally backed outside investors. Venture capitalist firms are actual com

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

panies. However, they invest other people's money and much larger amounts of it (several million dollars) than seed funding firms. This type of equity investment usually is best suited for rapidly growing companies that require a lot of capital or start-up companies with a strong business plan

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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When it comes to budget planning you need a solid plan that will map out what it is you need to be doing with your money. If you don't have a budget then you are out spending money and really aren't making sure you have enough to pay your bills or even that you have enough set aside for emergencies or retirement.

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