So, you're a newbie. Odds are you've got loads of enthusiasm, talent and dreams of grandeur, but not a bubbling bank account. You want to carve out your own space in the wacky world of design, photography, illustration or maybe writing. The hard truth is that you can do it with a wing, a prayer and 50 bucks (like I did), but it's going to be tough road to travel.

Here's some typical thinking. "Hot diggity! I got the project! Let's see ... I think I can finish it up in a couple of weeks. They said they're going to send me 50% upfront and I can bill the other half for payment in 30 days. Oh geez. The rent's due right in between. Ah ... no sweat. I can ride it. This is gonna be great!" So you wait for the deposit check. And you wait. And you wait some more. All of a sudden that rent payments coming close and it would be nice to buy some groceries, too.

The thing is, what's really important to you, isn't always as important to your client. Things happen. Priorities change. Sure, they still want you to do the project, there are just going to be a few delays. Counting too much on one client, or worse, one project, to pay your bills is a recipe for disaster. A better method is to have this nifty stuff called startup capital. That's the dough that helps you buy the stuff you need and ride out the ups and downs of starting a practice. And trust me, there will be plenty of ups and downs, unexpected costs, projects that go south and the likes. But hey, that's what makes this biz so much fun.

It's always good to start with a dream and a vision. But, some hard-nosed planning has got to come next in line. As they say, "Plan your work and work your plan." A well thought-out and crafted business plan is crucial to success. I've touched on business planning in other articles. In this one I'll focus on one part of that plan - The Financial Plan.

Your Financial Plan contains your goals, objectives and action plans for your accounting, billing, financing and money management methods. It also contains your investment goals and strategies as well was tax planning and strategies. Beyond this, a Financial Plan should also include Pro Forma projections for 1, 3 and 5 years. Think of a Pro Forma as your best guess as to how the dough's going to flow. You can also think of these as projected budgets for the next few years. My belief is that it's best to be conservative in your estimates.

You'll want to project revenue from any existing clients and future ones. This can be based on your monthly sales goals for billable hours. You'll need to account for salaries and overhead. This includes rent/mortgage payments, supplies, utilities, postage/shipping, loan payments, etc. All the moolah you shell out every month that isn't billed directly to a client.

So, how much money do you need? Every practice is different, but it's a safe bet that you'll need a year's worth. You can get by with six months of startup capital and maybe three if you have some solid clients. But, the less capital you have, the riskier things get. It's tough to do your best work when you're worried about how you're going to eat or pay the rent. In the words of Tom Robbins, "There's a certain Buddhistic calm that comes from having ... money in the bank."

Remember that your startup capital will need to cover all the one-time expenses like furniture, equipment, software, leasehold improvements, telephones, legal and accounting set up fees, etc. Plus, you'll have monthly recurring expenses like rent, loan payments, office supplies, utilities, auto expenses, etc., along with salaries and related expenses.

Setting up your budget correctly is critical. List all your expenses and add at least a 10% contingency. That contingency will help to cover all those unexpected costs like frying your monitor, blowing out the water pump in your car or the furnace that gave up the ghost.

In a nutshell, there are two types of startup financing - debt and equity. If you're borrowing money and repaying it over time, welcome to the club. You've got debt. Equity investments are when you give up a portion of ownership in your business. This can be in the form of shareholders or partners, for instance.

Once you have your plan in hand you're ready to go hunting for startup capital. So ... who you gonna call? There are several options available for capital sources. Here are a few.

Your Personal Savings
This is the route many folks go and it's probably the safest. If you've got a day job, commit to putting away a certain percentage each month for business capital. If you're also freelancing on the side, maybe put all, or some, of those fees aside as well.

In addition to savings accounts, if you own your home, you may be able to arrange for either a home equity loan or, better, a home equity line of credit. Another option is borrowing against a whole life insurance policy, if you have some cash value in it.

Friends and Family
Next to self-funding, your friends and family are your next best bet. Hey, they know you're talented and they believe in you. Well, hopefully, anyway. The trick with borrowing money from friends and family is keeping it professional. Review your business plan with them. Show them your goals and how you're going to achieve them. Even though they're people that you're close to, you'll still need to sell them on the idea of reaching deep into their pockets. Finally, have your attorney (you do have one, right?) draw up an agreement that specifies the loan term, interest, percentage stake in the business, payments and due dates, disbursement of profits, if applicable, etc. In other words, do it up right. Then be sure to make your payments on time.

The Bank
You can try this. Most of us have. Good luck. Bankers aren't known for their warm fuzzies toward creative folks.

Partners
Partners can be a good source of start up money. You provide the creative. They provide the bucks for a cut of the profits. Be forewarned, though, partnerships can be a can of worms. Get with the 'ole lawyer again and draw up a rock solid and crystal clear agreement.

Investors
If you've opted to create a corporation, you can play Wall Street Mogul and sell stock. In addition to friends and family members, seek out other acquaintances, business people and your suppliers for possible investment sources. This is another place where your diligent planning will help make a persuading presentation.

You could also consider searching the web for investment groups and angel investors, Similarly, you might consider placing a classified ad in your local newspaper.

Be sure to check out potential investors as much as they're going to check you out. Run a credit check, check their reputations and any other investments they've made. It's always better to be safe than sorry later.

A good place to start hunting is vfinance.com. They provide information about hundreds of venture capital firms, along with news, business plan templates, advice and other relevant information. They'll even review your business plan for free.

Angel investors might just be a perfect solutions for your business. These are folks (or groups) with a boat load of dough to invest in solid startups like yours. Typically, they invest smaller amounts of money than larger venture capital firms. They also tend to be business people who can act as your advisor(s). Since they have a stake in your success, they generally will do all they can to insure it.

Inc. Magazine's web site has a Directory of Angel Investors. It can be found at: www.inc.com/articles/2001/09/23461.html.

One often overlooked source for capital are your suppliers. Since they want your business, they also have a stake in your success. Seek out some of your larger privately owned printers, office/art supply stores, lawyers, accountants and such to pitch. Once again, you'll want a solid and clear agreement.

Economic Development Groups
These are state and local agencies that are in business to help people like you. And, they can be a huge help. You can likely find them in your phone book or by calling your City/Town Hall or Chamber of Commerce.

Economic development groups can aid you in finding and preparing for a loan, finding government programs that can help you out, federal and/or state aid among other things. If you are a woman or minority, they can point you to programs specifically tailored to you.

Small Business Administration (SBA)
The SBA exists to help small business. Well, by their moniker, that's no big surprise. They can provide you with consultants to help you craft your business plan, set up your enterprise and generally get you off the ground. Best of all, they're free. Free is good.

Most notable are the SBA loan guarantees. They can provide you with specific guidelines to help you get a bank loan, or put you in touch (for a fee) with a professional loan packager who will do it for you. The SBA guarantees that all approved loans will be repaid up to a certain percentage. So, if you have a good credit rating and the bank still turns you down, give the SBA a whirl. Also, the SBA ties in with SCORE - The Service Corp. of Retired Executives. These are folks who will act as your business mentor/advisors to help you navigate the business jungle.

A visit to the SBA site is a must for anyone contemplating hanging out their shingle. You can find it at www.sba.gov. Even if you don't plan to tap into their loan programs, you'll glean some valuable information about starting things up right.

Putting the team together
Odds are, you'll create a team of investors from several sources - family, friends, area business owners, suppliers and perhaps a sprinkling of angel or private investors. It's important that these folks bring more to the table than just dollars. They should also be able to mentor and advise you as you grow your practice.

Start by doing your homework. Research your options. Read up on financing methods and strategies. Then put your business plan together, review it, edit it and make it rock solid. With your plan in hand, you're ready to make your financing pitch from a position of confidence. That confidence will show in your presentation and will help light a fire of enthusiasm within your potential investors.

In the end, it's better to take the time needed to plan properly and secure adequate start up capital. You'll save yourself a ton on money on antacids down the road.