if you receive more than $10,000 as a gift in one year from any individual, since there may be tax implications. Finally, write down the terms of the loan or transaction and make sure everyone thoroughly understands them. After all, you want to feel like you can go to family reunions even if your business fails.     WarningThink twice before you accept. Think about what a business reversal could do to your personal relationship, even if your relative or friend says they dont need the money. I know families that have been torn apart because a borrower didnt meet the agreements she made with a lender. Besides, a loan from a relative or close friend that comes with emotional strings probably isnt worth the cost.           Your Money Machine     Here is a task you can start right now that will save you time and frustration. Begin writing a list of all your relatives, friends, business acquaintances, supporters, professional advisors and so on. This list will be one of the primary sources of money for your new or growing venture, since people who know you already are most likely to be interested in your business.           One advantage of dealing with your relatives and friends is that they already know your strengths and weaknesses. They are likely to be more understanding than a banker if you have start-up problems and make a few late loan payments. Nevertheless, youll be wise to treat people close to you in a businesslike manner.     Dont make the money a test of whether they love you or not. If your close relatives feel they can decline the investment opportunity without hurting your feelings, both of you will be happier in the long run. Pay attention to criticism and suggestions, especially if they come from people with business experience. If they dont wish to invest or lend you money, accept their reasons at face value-you might not like their hidden reasons.     Some people looking for business financing will write a business plan and loan package and then show it only to the bank, assuming relatives or friends dont need to see it. This is a mistake. Make sure those people close to you get the benefit of all your hard work. A good business plan may even help them see you in a new light and encourage them to make a financial commitment. 3. Creative Cost-Cutting     Although not really a funding source, one of the most effective ways to finance a small business is to make do with less. If your initial business proposal calls for $50,000, think about how you can reduce spending on non-essential items. Perhaps you can begin your consulting business in your home or share expensive equipment with an established business rather than buying it.     Of course, there will be many situations where you will need a fair amount of money to get started-its hard to cook without a stove, paint without a ladder or program without a computer. The important principle is not that you should avoid raising outside money, but that you should borrow or raise equity capital only if you absolutely cant do without it. For more on this concept, I recommend Honest Business, by Michael Phillips and Salli Rasberry (Random House).     4. Equity in Other Assets