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Finding finance for your startup may be easiest within your own community. Your ‘community’ could be in terms of relationships, geography, field of interest or affiliation.Community Financed Business is not a generally accepted term. However, there are an increasing number of ways that businesses are financially supported within a community. Some are very traditional, such as coops that started in the nineteenth century and new ones are emerging all the time. An example is crowdfunding, that springs very recently from the social networking phenomenon.The impetus is coming from two directions. The first is the disaffection for Wall Street and all that ‘big banking’ represents. The other is the burgeoning ‘local’ movement, the natural offspring of environmentalism.Keeping funding in your own community has advantages and disadvantages. Some of the plusses are that you know the people providing money and your business is ‘visible’ to them. Banks have a very bureaucratic approach and lending decisions have to be ‘passed up the line’ to a corporate office somewhere else. With community finance, your access to the lenders is easy and in most cases will be face-to-face. Minuses include the reverse of that coin: you will have nowhere to ‘hide’. I always tell business borrowers to ‘over-communicate’ with their bankers. If you borrow from those you know, the time spent on communicating with them is likely to take a lot of your energy (and emotion).Family and Friends (some say also, Fools)For many generations, startups have looked to their family and friends for finance, whether equity or loan money. This is often extended to customers and suppliers, too. According to the Angel Capital Education Foundation, startups annually raise $60 billion through friends and family. Thus it’s probably the biggest single source of ‘series A’ funding that there is.There are some strong caveats to this route, since emotion and relationships are to the fore. You will be focused on getting the money, but you need to know their point of view, too. Treat them as if they were a business and give them good reason to help. Be clear about how you will repay them and use a promissory note to make it legal.Have a backup plan. If the loan from a family member needs to be called in for reasons like the lender lost a job, you need to be able to repay quickly or risk a family feud. Ask yourself if it’s the right course in the first place, and beware that it’s tough to price and structure the right deal for both parties. Think about how things will be if your startup goes belly-up. Checking downside risks is often the key to a successful startup.Community Financed BusinessCommunity Supported Agriculture (CSA) is now a widespread means of providing small-scale financial support to farmers. Typically, members in a community buy shares in the produce of farms pre-season and receive delivery as and when the particular crops or meat becomes available. The process has now spread to other sectors of the economy, mainly in ag and food. There are examples in seafood (Port Clyde, ME) and restaurants where patrons invest and get repaid in meals and other perks over time.This tends to be a very effective, but somewhat risky way of raising funds-for the investor. I lost several hundred dollars, supporting a small bookshop in my village, where my up-front money was to have been repaid in books on a monthly basis with a small amount of interest. The business model was not carefully enough prepared and the startup was poorly managed, and resulted in failure.Interestingly, about two years later in the space next door, another community supported business has opened – a restaurant. Not only did these founders sell shares to local supporters, but they, themselves, are buying produce from local CSA farms. There are many other ways in addition to the CSA model of pre-funding product sales by subscription or ‘shares’.CooperativesThey are much more widespread than you might imagine, both locally and nationally. There are nearly 30,000 of them in the US. I used to serve on the board of the Brattleboro Food Coop, a two-store retailer in my local Vermont town. We had reached capacity in our main store with a $16 million turnover, and decided to build an entirely new store at a cost of several millions. Coop members in the locality advanced well over $1 million in 3 and 5 year loans as part of the shareholder equity to back the bank and other financing. In addition another local coop partnered in the building – Coop Power – by providing the solar roof.A significant proportion of coops are small and locally oriented. Many are among farmers and banking. Savings and Loan Associations are, in effect, coops. Some started small and local but have grown into large entities, with the strength of local support. An example is Land o’ Lakes, now pretty much a national brand of dairy products.Direct Public OfferingsA direct public offering is a way for a company to “go public” without the intermediaries that orchestrate an IPO. A company completes required offering documents and securities filings, which enables them to sell shares directly to the public – the company’s customers and community.A recent example of a DPO is Quimper Mercantile in Port Townsend, WA, that has raised over $500,000 in a DPO to open a general store. They were assisted by Cutting Edge Capital. Another of CEC’s clients is People’s Community Market, whose model of grassroots investing allows Californians of all economic backgrounds to become Founders and Shareholders in creating a food store in West Oakland.CrowdfundingYou will surely have heard of Kickstarter. An MBA student of mine raised over $15,000 (on a $10,000 target) seed money locally for Raleigh City Farm in North Carolina, via a Kickstarter campaign. Well, the movement is much more widespread and often locally oriented. You can take a look at my crowdfunding page for more info.The JOBS Act which is due to come into force this year, allows anyone to invest up to $10,000 a year, or up to 10 percent of their net income if they earn less than $100,000 a year, in private companies. This contrasts with the present, given that crowdfunders are largely rewarded non-financially. One of the first platforms off the block will be Earlyshares, an equity based crowdfunding platform.Revenue-based Funding & Customer FinancingAnother new approach to funding business is Revenue-Based Funding. The idea is that instead of the risk being associated with the capital growth of the investment, the lender takes a risk on the revenue, by charging a percentage of the top line. A US company called RevenueLoan now offers a Revenue-Based Funding product, but on relatively large amounts for startups. As they say, “Revenue Based Financing (RBF) is a hybrid financing method that fills a need in the growth capital market for companies with approximately $1 to $10 million in revenue and a proven plan for growth.Maker CommunityTypical interests enjoyed by the maker subculture include engineering-oriented pursuits such as electronics, robotics, 3-D printing, 2-D plotter cutting, water-jet cutting, and the use of CNC tools (even applied to embroidery), as well as more traditional activities such as metalworking, woodworking, and traditional arts and crafts.The whole print-on-demand industry is another example, where authors can produce books even one at a time. While these are not funders, they reduce the costs that would otherwise be associated with small-scale manufacturing. However there are hybrids that combine maker facilities with startup seed funding, as well as incubation space in factory-like settings.Business Accelerators and IncubatorsUnlike many business assistance programs, business incubators do not serve any and all companies. Entrepreneurs who wish to enter a business incubation program must apply for admission. They also tend to be physical places where you can start your business under a collective roof. Many incubators/accelerators are competitive to join, but once in seed capital is provided.While it is possible to generalize about accelerators, there are almost as many variations as there are similarities. Business Accelerators may focus on very specific geographies (such as cities or States), industrial sectors (such as information technology or clean energy), industrial processes (such as manufacturing or industrial kitchens). Accelerators can offer physical space on short or medium terms, networking, mentoring, funding or introduction to funding, training, peer group support. These may vary in time, for instance: pre-launch, startup, early stage.Other Community Finance OpportunitiesMany other community or ‘local’ finance opportunities exist. There may be financial incentives such as grants available from local government agencies, or business plan competitions run by local development bodies and academic institutions, for instance.Depending upon the governance structure of your startup, there may be program funds that are accessible. For instance, in those States where the L3C form (limited liability company that limits the level of profit) exists, you could get foundation funding.There are also combinations of some of the different community funding avenues to be explored. For instance, you could use crowdfunding to extend the family and friends route. You could add other people in your network and, by having a larger lender base, each contributor’s risk could be reduced, because they’d be providing smaller sums. The downside of the hybrid would be the time you would need to commit to keeping lenders informed of progress.How You Can Do It?Brainstorm with friends and associates, but do it in an organized way. You probably have fixed ideas about how you are going to raise money for your startup and it will be important to spawn new ideas. On a solo basis, one of the methods I use is mind-mapping (several free programs and apps are on the Web); it lets me get all my scattered ideas briefly noted in one visual space. It helps me see the wood for the trees.Affinity diagrams might be something you can use in a group. It sounds daunting, but all you need is some wall space and sticky-notes. Participants work on their own ideas and post them. When you have them all on the wall you can begin to see which ideas are related, or which may generate new ideas.Be as wild as you can about where you can capital or loans from. You’d be surprised about how many sources there are, and just how many people would love to help.

It is a common situation for a homeowner to find that something needs to be repaired around the house. It can seem like things are always breaking down and needing to be fixed. Some of these repairs will be things that you will be able to fix yourself, but other things will require the help of a professional from a home repair business. There are some things that should always be checked into before you hire a home repairman.When choosing a home repair business to fix things around the home, it is important to look into their past performance. Check the references for the home repair handyman to make sure that he has satisfied customers in the past. If he won’t give you references, that is a bad sign, so it would be best to look for someone else to do the needed repairs.Make sure that everything is clearly stated in the contract. This includes who will clean up afterwards, and what things will be thrown away by the home repairman. The contract should include everything the handyman will do and what will be charged for these services. If something is not clear, it is important to make it clear before signing the contract.In order to get the best work, it is a good idea to avoid extreme low ball offers, as well as any home repair business that requires payment up front for the whole job. A deposit is all that is normally required, with the rest of the money paid at the end of a job once the client is satisfied that it is properly completed. If the price seems to good to be true, it probably is, which means the home repair handyman will try to find other things to do in order to increase the overall cost of the job and make up any lost money due to the extremely low bid he used to get the job.Hiring the right home repair business will make it more likely that any repairs will be done properly and at a reasonable price, so it is worth the time and effort it takes to research the various options using the internet, and by calling their references. For more useful ideas on this topic, see the author’s website about home maintenance / repair, mentioned in the paragraph below.

To train – or not to train – is not the question according to automotive advertising agencies who understand the importance of investing in the people part of the sales and service process by providing training before, during and after the sale.  Training has often been considered as an afterthought by auto dealers who have enjoyed the luxury of having more customers than cars with a never ending supply of salespeople and service writers who earned a higher than average income for their efforts.  Today’s consolidating auto industry has changed the math for auto dealers who now have to deal with shrinking sales volumes, reduced profit margins and the resulting loss of a ready willing and able sales and service staff whose incomes have been reduced along with dealer profits. Automotive advertising agencies have always been tied to their auto dealer clients bottom line – whether they knew it or not – and today’s automotive advertising agencies are realizing that their areas of responsibility do not stop at the front door of the auto dealership.  Automotive advertising plans geared for the Internet using digital marketing platforms coupled with internal sales and service processes powered by integrated technologies provide efficiencies that allow auto dealerships to operate with reduced budgets and support staff in sales and service. Unfortunately, many auto dealers and automotive advertising agencies have been operating with the false sense of security that the people aren’t as important as the technology and/or the processes that they have applied to replace them.   That is as untrue today as it was yesterday. People still like to do business with people that they like and human nature has survived on the world wide web.  The real solution for auto dealers forced to operate with fewer sales people and service writers is to train them in the use of the new technology, however, not at the expense of training them in understanding human nature and proven old school best practices to sell a car.New technologies and automotive advertising applications include training solutions that offer efficiencies similar to other sales and service processes that have been applied to reduce expenses for auto dealers.   However, even the best training system can’t teach someone to be a nice person and/or to place their customer’s interests ahead of their own.  These applications must be coupled with people skills that are best hired vs. taught and they start before the sale or even the hiring of the sales person or service writer ever begins. Internet based applications like Hire The Winners help human resource departments sort through applicants in the hiring process.  Their focus is on personality traits and people skills surfaced in a series of videos posted on a site that is linked to help wanted ads.  This screening process allows the auto dealer to determine how the applicant will react to various real world scenarios in the sales and service process.  Applying this filter before investing in training and lost sales opportunities caused by a bad hire provide an R.O.I. that can be easily verified with improved employee retention, C.S.I. / S.S.I. scores for the dealership and incremental increases in sales and service productivity by a well screened employee.Similar advantages in training during the sales and service process can be applied by applications like DealerMouth that allow sales and service staff to promote themselves through their own websites hosted – and monitored – by the auto dealer to promote best practices.  This ongoing training by senior management compliments the desire by the automotive advertising agencies to extend the reach and frequency of their online automotive advertising messaging beyond the auto dealerships websites and or third party automotive advertising platforms.  Training by example is a proven practice that can be applied on the internet super highway in the virtual showroom much like it used to be applied in brick and mortar facilities.Newly developing applications focused on enhancing the sales process with integrated training components are also in development.  Applications designed for kiosk, desk top and even mobile platforms promise to support sales and service staff before, during and after the buying and shopping experience for customers.  Providing sales people and service writers with best practices and word tracks to enhance the customer experience during their sales and/or service presentation will empower the staff by offering them relevant information to help the customer make a buying decision.  In addition to increasing their individual productivity on a real time basis, there is a residual benefit of training the sales and service writer who will be better able to apply and retain the information built into their more consistent presentations to their customers.  Automotive advertising agencies are tasked with evaluating new technologies and automotive advertising applications to provide more for less for their auto dealer clients.  The presumption that these technologies can – or should – replace people in the process is misguided if it doesn’t increase the productivity of the people that remain.  Training will increase the R.O.I. that auto dealers receive from their staff.  More importantly for automotive advertising agencies is that training will directly impact the auto dealers bottom line which is certainly part of the job description for automotive advertising agencies in today’s challenging auto industry.