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Accessing capital to start or grow a business can be challenging for all entrepreneurs, particularly those with service-based businesses, which includes the majority of women entrepreneurs. Your biggest asset is likely your intellectual capital, rather than bricks and mortar.

If you struggle to raise funds, you are not alone. Most women business owners tend to self-finance, which limits their growth potential. So, how can you find that elusive pot of money to fuel your business development? You can actually look both inside and outside to finance your service firm.

Internal Sources
By applying some creative financial management inside your business, you may be surprised how you can free up operating funds to redirect towards your growth plans.

Here are a few ideas to consider:

• Travel smartly. If your service involves travelling to visit clients, use that as an opportunity to research new markets and opportunities. This will minimize business development expenditures. Working through local partners in foreign markets can be a good strategy to reduce your travel costs after you have established relationships and agreements.
• Use a credit card wisely. Charge travel and day-to-day expenses, like office supplies, to credit cards to slow down your cash outlay.
• Consider leasing office equipment rather than purchasing — it’s always best to check with your accountant first for the pros and cons.
• Negotiate astutely. Build in start-up payments and progressive payments from clients, especially for long-term projects. In other words, don’t wait until the end of a multi-month contract to invoice a client for your services. You should also try negotiating longer payment terms with your suppliers or potential suppliers. Negotiating wisely both with clients and suppliers will improve cash flow.

Good fiscal management like this will help support at least some modest growth.

External Sources
If you are looking to raise a greater amount of capital, whether through banks or other avenues, the key ingredient is a solid business plan. You can find many excellent business plan templates online, including the Scotia Plan Writer for business.

Here are some financing options you can pursue:

• Your bank. Like most entrepreneurs, the first place you will turn if you want to access credit is to your bank. As a service firm, you need to be proactive in selling your business strengths, especially when you have no tangible assets. It’s important to be prepared, not only with your business plan, but with a good credit rating and demonstrations that you’ve done your homework to support your loan request. For example, have you verified that potential new customers will pay you by doing your credit checks first? All banks now offer online credit applications for relatively small amounts (typically $5,000 to $50,000) geared to small business borrowers. (You can check out Scotiabank’s offerings at www.scotiabank.com/cda/content/0,1608,CID336_LIDen,00.html.) Work with your account manager to ensure you select the right borrowing solution, whether that be an operating loan (line of credit), a term loan (to purchase equipment, for example) or other options. By developing a relationship with a banker who understands your business, you can get valuable advice on things like loan structuring and what to do after you have landed a big contract, which is just as important as the capital itself.
• Family and friends. Often referred to as ‘love money’, this option is an ideal starting place for small businesses, particularly start-ups. Perhaps there is someone in your immediate family or amongst your relatives or friends who would be willing to invest in your business venture. You could offer them a better return on their investment than they would get elsewhere. Be as professional in dealing with them as you would strangers, ensuring you provide your business plan first, put the final agreement in writing and repay the loan.
• Angels. These private investors with surplus funds to invest in new ventures typically come into play if you are seeking more than you can get through “love money” ( over $100,000) . Finding them requires some research. The best sources are professional advisors, including accountants, lawyers, insurance agents, investment advisors and industry associations. Angels should not be confused with venture capital, another financing source.
• Venture Capital. Unless you have a scalable, growing global business that is attractive to venture capitalists, such as high tech, and unless you are prepared to give up control or equity in your company, this is not a recommended route.
• Governments. Federal and provincial governments have loan, guarantee or grant programs to support various aspects of business growth. For example, Western Economic Diversification Canada (WD) has a Women's Enterprise Initiative Loan Program for women entrepreneurs seeking to start up or expand; Ontario offers a new cost-sharing grant through its Market Access Program, designed to help small to medium size firms take advantage of opportunities in foreign markets beyond the U.S. and which can be used for market research and promotional materials; and BDC’s Market Xpansion Loan for up to $50,000 can help you finance the expansion ofyour domestic or international markets and be used for activities like trade show participation overseas, which isan important marketing strategy for service businesses.

Remember to network, network, network as a service-based business. Other entrepreneurs will have ideas for financing that you can adapt. Consider joining one of the many women’s business networks or associations that exist across the country in order to meet and network with other women entrepreneurs. And regularly seek the advice of professional advisors, such as your accountant and banker.If traditional bank financing is not appropriate, they can help direct you to other options.

Susan Baka is President of Bay Communications & Marketing, Inc. (www.baycomm.ca) and has more than 20 years experience as an information specialist, seasoned writer and international speaker, specializing in the women’s market.