Capital sources: Family and friends

Almost all entrepreneurs eventually confront the predicament of whether to use other people's money or their own. Of course, the major perceived risk is losing control of the business.

You may be one of the lucky ones with family members or friends willing and able to invest in your business. Be careful though, it may be easier to strike a deal with dad than the bank president, but harder to keep dad out of your shop.

Be sure to consider what a business failure would do to the relationship. Write up a payback plan agreement that everyone understands.