Financial Options for First Time Business Owners in San Diego

The fun part of starting your own business in San Diego is being able to do something you are passionate about while supporting yourself and your family at the same time, though being close to the beach is fun too.

san diego beach ca
photo credit: Sunburned Surveyor

From the perspective of a first time business owner, the “not fun” part of opening a business is just about everything else – seriously.

Specific issues first time business owners run into include:
  • Advertising and Marketing
  • Buying inventory
  • Furnishing the office
  • Making payroll
  • Paying the utility bills
  • Paying the home and possibly the business mortgage
  • Paying credit and charge card bills

There is, however, an issue that is more important than the above – money.

From designing your dream office and sourcing both the inventory and employees to finding the perfect location downtown and potential customers, the most crucial aspect to opening and running a business is finding the money to pay for everything.

Because money is what makes a business go ’round, the added costs that startups incur make the money issue even more important. Often, this fact leaves business owners – especially new business owners – searching for new property in San Diego in addition to inexpensive solutions to help them cover costs, and both issues lead to a stressful situation.

Finding the Money

financial options
photo credit: 401(K) 2013

A solution is available for everything, as is a financial option for such things as paying your employees, to advertising and marketing, or renting office space by the marina. Some financial options include:

Business Grants: Business owners do not have to pay the grants back, and they can use the money for anything business related. Non-profit organizations, federal, state, and local governments, the Small Business Administration, and many for-profit private corporations offer grant programs.

Business Loans: Good credit is needed for an unsecured loan, and collateral for a secured loan, while both allow the business owner to use the money for anything business related. The SBA, banks, and private, for profit corporations offer loan programs, especially those who are first time business owners, but you’ll have to pay the money back.

Angel Investors: ‘Angel Investors’ often invest in exchange for a share of the company, and the business owner might not have to pay back the money. Usually, the share is from 15 to 30 percent, depending on how risky the investment is. Angel investors specialize in funding startups, and first time business owners who don’t qualify for other programs may want to pursue this option.

Credit Cards: Because paying for business related expenses on a credit card gets expensive with the high interest rates for purchases, and even higher cash advance rates, the credit card option is usually one of last resort. If the business owner misses payments, the card company can increase the APR, or even sue.

While a number of options are available to find money for your business, you could always do what the Murrieta City Council Chambers did in Riverside – crowd funding.

Economic development director of the Murrieta City Council, Bruce Coleman, decided to go the crowd funding route to fund the Chamber’s office furniture needs. This way, every local citizen could pitch in without any one of him or her having to dig too deep. The project began on August 7, 2013, and runs until October. The City Council Chambers hopes to purchase at least 40 chairs and 10 tables from a local office furniture dealer.

Getting Ready for Grand Opening

grand opening
photo credit: altopower

Now that you’ve considered your financial options and got your funding source figured out, it’s time to build your office, which means spending the money. If you applied for and received a loan or grant from the San Diego SBA, or decided to start a crowd funding project of your own, you will have to spend wisely because stretching the funds you have is key to getting a good start to your business.

Location: Find and pay for a location suitable to clientele and your budget. If you business handles a lot of walk in clients, you might want to consider an office on a busy intersection, or by Interstate 5. On the other hand, office space available closer to the marina is nice and draws a walk in crowd as well, but is more expensive.

Utilities and Certifications: Contact the San Diego Gas and Electric Company, and the City of San Diego Public Utilities to ensure the gas, electric, and water are all turned on and running before opening day. The City of San Diego website can also tell you which licenses and certifications you need and how to secure them.

Furnish your office: Visit your local office furniture company to get a good deal on modern furniture for a minimal look that looks good and helps stretch the money. Local stores are great for saving money because they offer used furniture and special discounts that larger retail furniture chains, big name bands, and department stores cannot.

Marketing: Tackle advertising and marketing by doing it yourself, hiring a marketing company or a professional who understands the industry in which you work, and who knows how to geo-target the right people to visit your business.

After getting the basics set up, you should be able to run your business like a pro. The best thing about business financing for an office in San Diego is the specific advantages that each option offers. Grants offer a lifeline to those with great ideas, while loans in good standing offer business owners a way to build their credit, helping them to qualify for more credit when it is needed. Once you get the ball rolling, there is no turning back – and that’s another thing that makes business fun.

About the Author: This article is written by Tara Miller