Do you have a fantastic business idea, but lack the means to make it a reality? Here are 7 ways of securing the financing you need to make your business dreams come true.
This is the most obvious source of funding for a new business venture. If you are considering financing options, it is likely because you do not have the savings yourself. However, if you are considering ways of funding your business, despite having the means to do so yourself, it is possible that you are making a huge misstep. Ask yourself whether you are reluctant to finance the business with your savings because you think there’s a chance you will lose them. If you don’t have confidence in your own business, it will be hard to inspire confidence in others.
Friends and Family
If your own bank account is empty, friends and family may well be willing to help you to achieve your business dreams. Borrowing from friends and family can be fraught with difficulty, only you know the relationship you have with these people. What you don’t want is to create a situation whereby your friends or family feel resentful of how you have invested their money. Make sure they understand exactly what you are hoping to do before they commit. For example, instead of telling them you are going to start a web-based business that provides and promotes buying guides, show them an existing example like Consumer Charts.
Crowdfunding is an increasingly popular option for people seeking an investment in their startup. First popularized by Kickstarter, crowdfunding makes use of a large number of small investors, individuals who each pledge a small amount of money upfront in exchange for products or services when the business is up and running. Unlike other types of investors, crowdfunders do not take any equity in the business they invest in.
A tried and tested way of funding a business is to approach the bank and ask them for a loan. If you want to take this route, you will need to have a business plan and financial forecasts ready to go. You should be aware that securing a small business loan from the bank isn't easy. That’s not to say you shouldn't try, but it is unwise to put all of your eggs in this particular basket.
There is a plethora of business grants available out there from a variety of different institutions and for a range of business types. The hardest part about taking this route is finding the grants to begin with. It can take time to sniff out these opportunities, but they do exist and are worth finding.
If your credit card allows it, you may be able to simply put all of your business-related charges on there until you are up and running properly.
Seeking private investment in exchange for a stake in your business is very hard to do if you are still in the pre-revenue stage. However, if you can secure enough funding to begin operations, and demonstrate the viability of your business, you can then use this to bargain for a private investment.
So, what are you waiting for? If you have a killer business idea, get out there and start hustling! It might seem hard at first, but it will all be worth it when your business is up and running.