Being an entrepreneur nowadays is very popular. There are a lot of advantages you can benefit from it. People are now seeking more opportunities to earn additional income. If you have extra money to fund a small business, why not try starting your own financing company? It doesn’t necessarily have to be big. You can start a micro financing company. A micro financing company provides loans to small businesses such as equity loans, vehicle loans or installment loans. You will not only help those businesses to prosper but you will also earn from it.
What are the Steps in Starting a Micro-Financing Company?
Study the market you want to serve. It can be limited to your location or its neighboring cities. This will help you to know who your potential customers are. Conduct a loan demand study if necessary and include also the demographics of your target market.
Identify your state’s regulator for small financing businesses. This is where you will get the necessary documents you need to process your business and the information to qualify as a finance company.
Form your business. Fill up the necessary forms for proper documentation. It is important to establish here the kind of business you will have. It can be a sole proprietorship wherein you are the sole owner of the company bearing all the profits and loss. It can also be a limited liability partnership wherein you can have someone to be your partner in running the company. Lastly, it can be a corporation where in you will have a set of board directors.
Establish the mission, vision and objectives of your company. Any business needs to have these. Think about the niche that your finance company will provide. Try to focus on what sets you apart from banks and other financing companies. Write a brief statement focusing on these guidelines.
Have your business plan ready. This will come in handy in case you need more funds to operate your business. This will help outside investors to put their trust in your company. Your business plan should contain detailed financial projections over the next three to five years.
Apply to the regulator of small financing companies in your area. Make sure that all your submitted forms are correct and pay the applicable fees for your permit. This will give your business the license it needs to operate as a financing company.
Locate and lease a good office for conducting your business. Hire people and train them to be competent. Advertise your business and continue your marketing strategies. Use the social media platform in promoting your business. When you receive your final permit from your regulating body, you may commence business.
Conduct your business with proper diligence and etiquette. Treat customers properly and listen to their needs. Talk to them about the different loans you offer and suggest which one is the most suitable for their needs. Customers can help in promoting your business by giving referrals.