Have any factors increased your desire to borrow money from friends and family?

Have any factors increased your desire to borrow money from friends and family?

Small businesses may be able to take advantage of this opportunity to immediately invest more money in the company while simultaneously repaying the loan and not having to worry about financial constraints.

Lower legal fees The loan’s structure may be simpler and necessitate less documentation if funds come from family and friends. It’s critical to have an attorney look over this, but if it’s set up in a simpler way, it might be easier and cheaper to make changes in the future. Even if a small business borrows money from family and friends, it’s still important for them to act professionally and have a business plan and the right paperwork.

Have any of these factors increased your desire to borrow money from friends and family? An inspiring success story can be found here. Philip H. Knight, co-founder and current Chairman of the Board of Nike, Inc., got the idea for his business when he wrote a business plan for a Stanford MBA class assignment in the 1960s.

Nike was started by friends and family. “Can Japanese Sports Shoes Do to German Sports Shoes What Japanese Cameras Did to German Cameras?” was his idea for a business that would sell shoes to athletes through the newspaper.

The purpose of this assignment was to determine whether or not a shoe could be designed and manufactured at a lower cost while still providing superior quality to Adidas, the current market leader in athletic shoes. Knight went to Japan to meet executives of the fake Adidas shoe manufacturer Onitsuka Tiger Co because he was so inspired by the assignment.

He claimed that he wanted to sell Tiger shoes in the United States as the CEO of a fictitious business called Blue Ribbon Sports. After Knight said he would give them a big order once after showing them to his business partners (but no, he did not have any), Tiger officials accepted his pitch and sent him samples.

Knight borrowed $500 from his father when he got back to his house to start his business and pay for shoe samples. Keep in mind that this was in the 1960s, and this is about $3,700 in current dollars and cents. Knight sent some of the shoes to his former running coach, Bill Bowerman, in the hope that he would buy them and show his runners. Even better was the end result: In 1964, Bowerman gave Knight $500, and the two of them became partners. You could say that the rest is history.