Here's a subject I have steered clear of in this blog - mainly because it is my own line of business and I could probably ramble on for ever about it.
You can't fail to have noticed that business finance is pretty hard to get hold of at the moment; in fact the press are having a field day writing about it. I don't want to go into that argument except to point out that I have actually written to several Government officers -not to make borrowing easier but to stop them from banging on with their stupid 'force banks to lend' message.
Anyway, with the banks being an unlikely source of funding, new business owners are having to look closer to home for their finance - often this will involve the proverbial 3 Fs - friends, family and fools.
As a matter of course I suggest this to business owners seeking finance - it is very telling to judge their knee-jerk response.
Of course it is sensible to keep business and family separate, but if you would not approach them for money because it is too risky, it does beg some very obvious questions about your expectations.
I would honestly suggest - even if you don't actually want any money - that you prepare your business plan on the pretext that you need funding from family and friends - and present it to them on that basis - it will raise a lot of interesting and relevant questions that the banks might be too discreet to ask! Just try it and see..
If you want to seriously consider 3-F funding, rather than depriving your parents of their hard-earned pension you might want to set up a micro-financing package, where you get a small investment from a number of individuals - well within the bounds of what they can afford to lose; that way you might still be friends if it all goes horribly wrong.
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