Going into business can be exciting, sometimes maybe a little too thrilling.

Financing is one of those things that can get a new business owner’s adrenaline pumping, and when that gets going, the two options are flight or fight. The thought of finding the money to get a business up and keep it running is intimidating. But you don’t have to run away from the prospect and abandon your entrepreneurial dream, and you don’t need a CPA or unicorn status.

Just a few financing basics will keep you in the fight.

Know Your Costs Going In

“He who fails to plan is planning to fail.” That wisdom, expressed variously and attributed to a number of historic personages, applies to today’s music industry.

You don’t need an artificial-intelligence driven analytics platform to plan your finances, though a spreadsheet helps. But a pen and notepad will do the trick.

Start jotting down your estimated outlays. If you’re opening a music store for example, you’ll have rent, insurance, utilities, inventory, fixtures, software, for instance, as well as everybody’s favorite profit-limiter, taxes—local, state, and federal taxes.

A good rule of thumb is to add 20% of your estimated expenses to the top to account for things such as changing market conditions. If there’s anything left of that 20% rainy day fund at the end of your first budget year, that’s money you keep.

Another thing to consider is that in addition to your new business expenses, you still have your personal expenses to manage. If you haven’t already, keep tabs on your monthly expenses. To factor annual mandatories into your monthly budget divided the estimated cost by 12 and tack it on.

When you get your business and personal expenses locked down, go on to Step 2.

Financing Options

There are options when it comes to finding launch money. You can invest your own savings. You can borrow from friends and family (as your “venture capitalists,” they should get a share of the enterprise.) Banks make business loans of various types, which might require you to put up your home or other assets as collateral.

A good place to start is with your bank. Often, banks have business divisions. As a personal banking customer, you may have access to better rates and other benefits if you use business banking. Regardless, it’s a great place to start your information gathering. Another great resource is U.S. Small Business Administration (SBA). Its website provides a wealth of information including types of loans and respective lenders. Additionally, a simple search online will yield articles and other reference materials in regard to starting a business and the respective costs you should consider.

Establish Good Credit 

If you’ve decided to take out a loan to start your business, good credit is essential to securing financing with favorable terms. Basics to improving or maintaining good credit include paying your bills on time, not exceeding your credit limit by 20%-30% of your total credit available to you, limiting the number of credit cards you have, using your credit card regularly yet responsibly, and limiting credit checks.

Put yourself in the shoes of a lender. Who would you rather loan money to? Sally, who pays her bills on time and uses her credit cards but pays off the balance every month? Or Stan, who pays his bills late and has sizable credit debt. Be a Sally, not a Stan.

The credit rating bureau Experian provides free reports that will tell you what shape your credit is in. Get one to see if yours needs work. The higher your rating when you apply for a loan, the better your chances you have of getting the financing you need to open your doors.

Government Grants

We’re used to giving our money to the government in the form of taxes. A lot of people aren’t aware that sometimes, the government gives money back. Don’t overlook this potential source of startup capital. Grants are given out based on a variety of qualifying factors. The beauty of a grant is that it’s just that—it’s a grant you don’t have to pay back. To access thousands of available grants and find out how to qualify, visit grants.gov.


This form of financing has become a popular way to raise money for non-profits and charities, and projects to support individuals in need. The same concept works for crowdfunding a start-up business. There are pros and cons to going the crowdfunding route but definitely one to consider. Investopedia provides a comprehensive crowdfunding breakdown that’s worth reviewing.

Get Help

Managing money is complicated and, frankly, most people don’t have the skills to do it well enough to maintain a business. Every entrepreneur has his or her strengths and weaknesses. Be brutally honest—your new business’ success depends on it!

If you’re on a tight budget and don’t have any wiggle room, it is imperative to get another set of eyes on your numbers. A trusted friend with business-finance expertise may be willing to serve as your de facto Chief Financial Officer. To put it plainly, if you can’t manage a business spreadsheet, find someone who can.

The time you spend doing something you’re not great at is time you’ll never get back. If it would be better spent doing the things you do well, stay in your lane. If you can’t manage your business finances and want to learn how, do it. But that’s a side hack until your enterprise is sustainable. Even superheroes have only one superpower. Find out what yours is, stick with it, and let a financial wizard help you with the money.