| Among these various funding options, which are the best for you and your company? If you have relatively modest goals and funding needs, you're probably not large enough to show up on the radar of the big venture capital firms. This is probably for the best, as it's unlikely you'd want the hassle (and control issues) associated with venture capital funding. Equity placement with small investors is also out of the question for most eBay businesses. Again, this is probably for the best, as you have all sorts of legal issues, not the least of which is developing a payout for your partners . A more popular source of funding for eBay sellers is the bank. It's much easier to get a loan than to solicit investments. Borrow enough money to get up and running, make sure you pay it back in time, and then you're free of all obligations. Even more popular is the self-funding option. If you start modestly (and you should), you probably have enough cash in the bank (or a high enough credit card limit) to handle your minimal start-up costs. Just make sure that the costs of launching your business don't keep you from paying your rent or mortgage! The Absolute Minimum Figuring out how much money you need is essential for anyone setting up a high-volume eBay business. Keep these points in mind: -
Your eBay business will have a variety of expenses ”capital expenses, ongoing rent and utilities, office and packing supplies , and cost of inventory. -
You calculate your monthly cash position by taking your starting cash on hand, adding your projected revenues , and then subtracting your estimated expenses for the month. -
The amount of funds you need to obtain is equal to your cumulative cash position for all the months before your business breaks even. -
Viable sources of funding include yourself, friends and family, your local bank or lending company, and large or small investors. | |