So, you have a promising business idea? That’s great! A lot of people spend years to come up with the perfect business idea that can catapult them to financial freedom. More than that, almost all successful companies that have become household names today in each of their respective industries have started with that single spark. That same spark that you now need to turn into a reality. The problem is, where are you going to find funds for it?
Don’t worry, we’ve got your back. In this article, we are going to share with you our tried-and-tested ways of funding a new startup. Here they are:
1. File for a loan.
We understand why some people can be hesitant to start their business with credit, but it’s important to take note that there are bad debt and good debt as well, and taking a loan from a financial institution like OpenCashAdvance in order to invest in a venture is counted as good debt. Plus, it gives you the money required to start working on your business right away.
2. Apply for a grant.
Aside from applying for a loan, you can also consider applying for a small business grant. There are different government programs, both local and federal, that seeks to help individuals with promising business ideas, especially those that can help the community benefit as a whole.
Government offices are also not the only institutions that offer financial assistance to small business owners. There are non-profit organizations that provide the same privileges as well, especially to those who belong to a lower-income bracket, or those who are considered part of the minority.
Finally, there are also micro lending options that you can consider as a hybrid between a credit institution and an NGO that offer a line of credit with impressively flexible payment terms, again, as long as you’re proven eligible.
3. Find an investor.
While applying for a grant can be very promising, we understand that it can be quite challenging to get approved for them given the number of applications that you’re also competing with. Hence, why don’t you consider seeking the help of an investor instead? You have the following options:
- Personal Network. You don’t have to search far for a potential investor. You can pitch your business idea to your friends and family. Just put an effort into showing them how serious you are. Create a solid business plan, send them a copy a week before your scheduled meeting, and make a pitch as you would any other investor.
- Angel Investor. Speaking of other investors, there are also people of high net-worth that consider themselves as angel investors. These people seek to invest in small businesses with the intention of helping them out and also earning a decent profit. They are definitely more difficult to convince, though, so make sure that you bring your a-game during the pitch.
- Venture Capital. Finally, there are companies that grant early-stage funding for new and upcoming startups. This is your best bet if your idea needs a large capital that most business grants and other investors wouldn’t be able to provide otherwise. Their terms can be quite strict, though, and know that you are giving them a significant share of your company.
4. Consider crowdfunding.
If one investor can’t handle providing the capital that you need for your company, then how about thousands of smaller investors? That’s the idea behind crowdfunding. With the help of a crowdfunding platform like Kickstarter or GoFundMe, you can launch a campaign to raise the money that you require to start your venture with the help of donations.
Just keep in mind, though, that there are crowdfunding platforms that require you to reach your established financial goal before you can withdraw your money, and that crowdfunding campaigns take a lot of effort to promote and see-through. With enough effort, though, we’re sure that you will be able to raise enough capital, just as thousands of startups that were launched through crowdfunding before you.
5. Make use of existing resources.
Depending on your business, especially if it’s service-providing, have you ever considered the possibility that it might not need as much capital as you expect? For instance, if you’re trying to launch a digital marketing business, all you really need are three things: the skill, a computer, and a reliable internet connection.
You can start offering your services through online job marketplaces and start building your online reputation right now. You can always improve your tools and equipment later on.
6. Fund your business yourself.
This leads us to our last tip. You can always fund your business yourself. This is especially feasible if you are still currently employed. You can set aside a percentage of your salary to save up for your business.
Another way is to get a side gig or set up a passive income stream with the intention of putting the money you get towards establishing your business.
Finally, you can always sell an existing asset (such as a secondary home or car) in order to get the money you need for your venture.
Sure, depending on the option you have chosen above, raising the capital you require on your own can take some time, but it does spare you from debt and seeking investors. We have found setting up a business this way the most satisfying as well. Remember, nothing worth having usually comes easy.
Conclusion
To end, here’s a quick summary of the tips we have shared with you:
- Seek financial help. You can obtain financial assistance by filing for a loan or a small business grant. You can also explore investor opportunities from your personal network, for an angel investor, or from a venture capital.
- Get crowdfunded. Launching a campaign through one of the many crowdfunding platforms out there can help you raise the money you need through bite-sized donations put together.
- Fund your own business. Finally, you can simply start offering your services and gradually building your business until it reaches your ideal state or raises the money yourself by getting a side gig or setting aside a percentage of your current income.
By keeping the tips we have shared with you in mind, we’re sure that it only takes a matter of time before your spark turns into a business reality. Good luck!
Author’s Bio:
Jim Hughes is a content marketer who has significant experience covering technology, finance, economics, and business topics for about 3 years. At the moment he works as content manager in OpenCashAdvance.com.
Email: j.hughes@appfin.org
