Starting a new business is an adventure for most people. For others, it’s a challenge to overcome. It’s all well and good to have a great idea, but if you cannot get that idea off the table and into a physical income, then there’s no point in it. You could have the best idea in the world, and for that to become something real, you need to be able to write a killer business plan that you can take to the bank with you. It’s important that you have a bank that agrees that your idea is a good one, because if they agree, they will fund your new idea and your business.
The problem here, is that the world is in a financial mess right now. The downturns, recessions, cutbacks and economic shutdowns have all meant that banks are tightening their belts when it comes to new businesses. They are stricter with their rules, their lending and their support, which means a lot of small business owners are looking elsewhere for their funding first. Money is everything in the world of the business start-up, whether we like it or not. You need cash to make your dream a reality, and getting hold of it is not the easiest thing to do. For one thing, most people don’t know that they can look beyond their bank as an option for financing. If your bank turns you down, that doesn’t mean the game is over. It just means you need to get creative in looking elsewhere for support. There are a lot of ways to fund a startup business, and we’ve put together six of the best for you.
Look Closer To Home
Friends, family, inheritance – it’s all relevant. Most business start-ups get their first bit of interest from their immediate family and friends. Building a network with the existing people in your life is a smart business strategy, and if you know people that are looking to collaborate and partner up, it’s a good way to get your business off the ground and into the sky. You would be surprised the number of people who are willing to help you with selling your house so that you have the right capital for your business – those friends, who may not have been able to donate to your cause – can still donate you a room to live in once your house has sold. Always ask first; you never know who may be able to help you in your inner circle.
The bank may have closed their door to you, but that doesn’t mean your borrowing potential is any less. Researching the right private investors can make a big difference to the way that you fund your business, especially as this will mean that you don’t have to ask government schemes for any help. You also won’t have to feel guilty by asking family and friends for help, which many do. There are a lot of choices when it comes to private lenders, so don’t just find one and settle there. Do your research properly!
You’ve seen the sites; GoFundMe, Business Angels and Kickstarter are all just the tip of the iceberg for crowdfunding. People who want to see you do well in life would probably like to get you on your way and be able to say that they played a hand in seeing you to the top. You can reach out to your target audience and they can help fund you to the top, and it’s not just about money. Crowdfunding is a community. It’s about creating a network and a buzz and by using crowdfunding sites, that’s exactly what you can achieve.
Business angels can often be found in the very industry that you are working in. They want to see people do well and they are far more than just a tub of cash to pick from. An angel investor can give you sound business advice about matters that you may not even have considered. You still need to have a business plan that is solid, as they want to know that they can get a good return on their investment in you.
It may not have entered your mind, but credit cards can really be a great short-term option for you. It’s important to remember that using a credit card to fund anything on your business side is going to be short term and not something you should be doing all the time. However, when you need a quick cash injection they’re a great option for your business. You should be careful, as your business credit score DOES matter and you don’t want that to be run into the dirt.
Sometimes, the best option for an ambitious entrepreneur is to wait and save up. The challenge of saving the money for each piece of your business can be a huge one, but you also won’t owe a penny to any banks, private lenders or friends. You won’t have any expectations on your shoulders other than the ones you lay down for yourself, and you can feel a sense of pride that comes with being a self-starter that is self-funded. You can learn so much about yourself and about your industry simply by biding your time and saving for the things that you need. The self-reliance is very ambitious, but it’s also a great way to get to know who you are as a business leader.
It doesn’t matter how you fund your new start-up in the end. You have to be able to be sure that your product or service is worth the effort in finding great investors. Once you get going, you will have a lot of responsibility on your shoulders – so making sure that your research is done properly and you are looking after your company at the same time is important. Always ensure your product or service is wanted before you make your start. How do you plan to fund yours?