Problem is, you lack the resources to make the business work. So what do you do?

Lack of funds is the most common cause for the failure of a business. A business will most likely fail if the entrepreneur does not have the financial resources to translate his vision into reality.

But don’t fret. There is still hope for you. Here are four options you can take if you have little resources to start your business on the right foot:

However, starting your business on a part-time or “moonlighting” basis depends on the nature of the business. Moonlighting will work with some businesses, but before exploring it as an option you must figure out if your limited availability will affect your credibility.

If you are planning to capitalize your skills in photography, for example, you should have no trouble building up the business at night and on weekends. It is perfectly feasible to start small, taking pictures on your spare time and using your bathroom as your darkroom.

If you work full time during the day, ask your clients to leave you messages in your answering machine. When you come home, you can call back the client and discuss with him or her the specifications for the project. At this point, you will have to choose clients that fit well with your schedule.

Starting part-time, however, may be very difficult for some businesses. If you are starting a business as a virtual assistant, clients will expect your help at various times during the day. Some will even ask you to do rush assignments. If you are working at a day job, you may not be able to fulfill your commitments to your clients (and to your own boss!) as effectively as you want it to be. They can easily get frustrated if they could only get hold of you during the evenings when you come home from work.

Be prepared to make a lot of sacrifices. Starting a business on the side while employed full time will not be easy. You need to consider whether you really have the time and energy to work at an 8-to-5 job, then come home to work on building your business (not to mention your family responsibilities). Remember, you are now basically working at two jobs, and in one of which you are the boss where you have much bigger responsibilities than being an ordinary employee. You will have to give-up a lot of your personal time. Forget about chilling out with your friends every night, or even taking long vacations.

Partnerships, however, can be very tricky, especially if you did not clarify the responsibilities, obligations and authority of each. Have your attorney draw up a precise partnership agreement that covers every eventuality.

Answer questions like: 

• What will be the contribution of each partner? 
• What are the responsibilities of each one? 
• How are you going to divide the profits? 
• Who will run the business? What kind of decisions can each partner make? 
• What if the partner wants to withdraw? What will happen to the business? 
• How do you resolve conflicts?

There are a number of questions you need to answer before taking on a partner. How well you know the person and your relationship with him or her prior to this business will come into play. The important thing is to cover your ground even before starting the venture together and agreeing on all possible areas of the business. You should never, ever take on a partner and simply say, “Well, he’s my friend so we don’t need to hire a lawyer to draw up an agreement between the two of us.” Because you do, especially if you want to avoid any headaches later on.

Any investor, even families and friends, are looking for tremendous opportunity for sustainable sales growth and profitability over time. They want returns to their money. And they are looking to you to deliver tangible results through what they perceive as your “business savvy and acumen.” Because they trust your capabilities, most likely you can negotiate for very easy repayment terms and low interest on the loan.

The difficult part with dealing with family is their concept of risk. They may not fully understand that giving you capital for a business is not always a sure thing (because they think you’re great!). How can you explain to them that the $20,000 they invested in your business ­ which represents the last of their life savings ­ went down the drain? From being the envied entrepreneur in your family, you become the pariah to be avoided at all costs. Think about how a possible failure of the business can affect your relationship with your family and friends.

Family members are also more likely to meddle in the way you are running your business. After all, Aunt Meredith was the one who financed your business, so why is she not allowed to make some decisions? Before accepting their financial contribution, talk to them about what they can (and can’t do).

The important thing to keep in mind when seeking financing from a commercial lender is to be prepared. Unlike your parents or relatives, commercial lenders look for proof that you and your business can return the money that they lent you. You have to demonstrate to the bankers and investors that an investment in your business is worthwhile. They have to share your enthusiasm for the venture. The best way to do that is to present a detailed and comprehensive business plan.

Lenders often ask for your background history and statement of personal finances. You must have an impeccable credit history, showing proof that you are good in honoring your financial commitments. They will also ask for your resume showing your capability to operate the business, management team (if any), description of the business including market research results, structure of the business, profit and loss projections, and an outline of how much money you need.

You will also be required to provide a personal balance sheet that lists your assets (real estate, car, valuable personal property) and liabilities (mortgage payments, credit card debts) along with a credit application that outlines your personal financial history.

203 Home-Based Businesses That Will Make You Rich : The Complete Guide to Financing and Running a Fabulously Successful Home-Based Business by Tyler Gregory Hicks (Introduction)

Running a One-Person Business by Claude Whitmyer, Salli Rasberry

101 Best Home-Business Success Secrets for Women by Priscilla Y. Huff (Introduction)

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