You have researched what you need to do to start your CNA school based on your state’s requirements, maybe written a business plan, determined the start up-costs and now you find yourself asking “How am I going to pay to start my CNA school?” Well, you are not alone. This is a question we get here at The Secret Cocktail® many time a week. Fortunately, there are many answers to this question: bootstrapping, loans, crowdfunding, angel investors, and grants to name a few. You just need to determine the best one for you! Below I will go over your options starting with the quickest and simplest option and go from there.
Most Common Funding Sources for CNA School Start Ups
Bootstrapping
What is bootstrapping? Chances are if you have been researching how to start a CNA school or other small business you have seen the term “bootstrapping” before. In case you are unfamiliar with what it means, bootstrapping, much like the old familiar saying “pull yourself up by your bootstraps” means you are funding your venture with your own money. Once you determine your financial needs for your new school you can evaluate your personal finances to see if you can afford to pay part or all of the start up costs yourself. The nice thing about this option is you can often access the capital immediately, don’t have loans to repay, and would not have to share profits with others (like investors). It is important though not to over extend your own capital. Your personal needs have to be securely covered if you are going to have a successful CNA school. Because of that, it isn’t always feasible to rely solely on bootstrapping to start a CNA school.
Crowdfunding
One less formal way to get funds for your CNA school that has gained popularity is crowdfunding. Crowdfunding itself is not a new idea. Entrepreneurs have long benefited from family or friends who have donated to the establishment of their small business. Modern crowdfunding has taken that to the digital world where you can reach a much larger group of people. With platforms like GoFundMe, KickStarter, and even Facebook you can create a digital fundraising campaign, share it online, and receive donations to start your business. This type of funding can often be acquired quicker than more traditional funding and, if you go with a donation-based crowdfunding platform like the ones above, you do not have to repay the funds. This does require a time investment on your part to set up and promote the campaign, and there are small fees that the platforms collect from your donations for their services.
Loans
If the initial investment required to start your CNA school goes beyond what you have personally available from your own capital or crowdfunding you might consider a loan to cover the remaining amount. If you are seeking a loan to help start your new business, the best place to start is with the US Small Business Administration. The SBA has partnered with lenders nationwide to help make financing accessible to small businesses and startups. For starting a CNA school, a Microloan may be of particular interest. These loans provide up to $50,000 to help small businesses start up and grow. To find your local providers you should reach out to your SBA District Office. You can also use GovLoans.gov to see what kinds of loans you might be eligible for based on your special circumstances. Acquiring a loan can help you get access to more funds than would be otherwise available, but does require more paperwork and takes some time to acquire. The lender will also review your credit score. While acceptable credit scores will vary between institutions, generally they will want to see a credit score of 650 or higher. Lending institutions will also want to see detailed a detailed business plan before they will invest in your school. As with any other loan, the funds must be repaid with interest.
Less Common Funding Sources for CNA School Start Ups
The above options are among the more common ways to fund your CNA school. They are readily accessible, and allow you to retain all of the equity in your your business. The less common ways of funding a CNA school start up include utilizing investors or grant funds. These options are used less often because they can be a difficult to come by and can be a lot more complicated when it comes to actually implementing them.
Investors
When it comes to getting funding from investors there are different forms. The most likely investor that would work with a CNA school would be an angel investor, because other types (like venture capitalist firms for example) invest in start ups they expect to provide returns in the millions. CNA schools do not provide these kinds of returns. An Angel Investor is a wealthy person who would provide funds to your school and in return would receive equity in the company. This means that they would be entitled to future profits. If you are able to work with an angel investor, they will likely be someone from your community who cares about your mission. Talk to people in your community, church members, local professional groups, and chamber of commerce. There may be an individual that wants to be a part of your project. The set up of this kind of partnership might benefit from an attorney creating an operating agreement or bylaws depending on the business structure of your school. If you have not yet chosen a business structure you can check out the different options on SBA.gov. There is also a really handy chart offered by NOLO.com that goes over the advantages and draws backs of each one.
Grants
By far, grants are the funding sources that we get the most questions about here at The Secret Cocktail®, so it may be a surprise that they show up at the bottom of our lists of funding options. This notion of “free money” from the government gets thrown around a lot, but it is misleading. It is true that grant funds do not require repayment, but they can be very difficult to obtain and require detailed reporting about how the funds are used. The fact is, this option is not one we see clients have success with very often. More often than not, school owners fund the start up of their school with one of the previously discussed methods. However, it is most certainly possible to get grant funds as a CNA School, even during start up. We have seen it first hand. This is a complex topic though, that goes beyond the scope of this article. Check out our dedicated article, How to Get Grant Funding for a CNA School, to learn more about grant funding, and decide if it is right for you.
If you are interested in starting a healthcare training school in your state, we can help! From CNA Schools, Phlebotomy Schools and more we can help launch a training school. Please contact us at [email protected] to learn more about our services or click here.
