Capital
How to get money to start a business?
Start with the minimum, using your own or customers' money (pre-sales). Credit only with a plan, from official sources, with payments that fit.
bairogonzalez.com team, drawing on Bairo's story · Published
Most small businesses in Brazil start with money from the owner, the family or the first customers, not with a loan or an investor. And that's good: debt at the start weighs just when the business doesn't yet know how much it sells. Before asking where to get money, ask how much you really need for the first test.
The practical path
- Calculate the minimum to start. Separate the initial investment (equipment, inventory, formalization) from working capital (the money to pay the bills until sales come in). Sebrae points out that many entrepreneurs open without knowing how much working capital they need, and that is among the causes of closure.
- Use the customer as your financier. Pre-sales, orders with a deposit, subscriptions paid in advance, made-to-order sales. It's money without interest, and it also proves there's a market.
- Start with what you already have. Used equipment, space at home, free tools, partnering with someone who already has the structure. Rent before you buy.
- Get to know official credit, without rushing. For companies already open, there are programs such as Pronampe, with rules that change from year to year (check gov.br and your bank). State development banks, development agencies and credit cooperatives also have lines for small businesses. Compare the total effective cost (CET), not just the rate.
- Guided productive microcredit. For those starting small, microcredit programs with follow-up support can be a door. See the options in your city and at public banks.
- Family and friends, with a contract. If someone close lends or invests, write it down: amount, term, whether it's a loan or a stake. Money without an agreement has broken up many families.
- Run from expensive money and promises. Revolving credit card balances, overdrafts and loan sharks don't finance a business: they sink it. Be wary of anyone who asks for an upfront payment to release credit; it's a common scam.
A useful rule: ask only for the money that takes the business to the next proof that it works (the first ten customers, the first month without a loss), not the money for the whole plan. Smaller amounts, in stages, cost less and let you correct course along the way.
This page is general guidance, not financial advice. To decide about credit, talk to an accountant.
How Bairo went through it
Bairo Leandro Gonzalez Martinez started the most common way: small, with what he had. His first business in Brazil was a salon opened with his partner when their daughter was born. Later, he built up capital working in events and digital printing.
He says he put that capital into other people's company as an investing partner. The business was not what it seemed and didn't hold, and he went broke. The lesson that remained wasn't "don't take risks." It was "look at the numbers before putting in the money, and know how long it needs to last."
The Method step
This is a question for step 5 of the Seventh Attempt Method: count in lifetime. Before looking for money, find out how many weeks it needs to buy. Build a simple 13-week cash flow and ask only for the amount that takes the business to the next proof that it works.
Discover the Seventh Attempt Method