Do you have a business idea? Are you looking for funds to turn your brilliant ideas into reality? Are you looking for ways to start your small business? We have found several sources of funds you can use to start your business.
As you know, getting business ideas are easy compared to starting a business. Many people do not have the slightest ideas where they can source for capital. It is quite discouraging especially for “fresh” graduates who want to start their companies straight away without working for someone or a company.
Getting money is one the apparent challenges most entrepreneurs go through when starting a business. It is a problem, but many people use it as an excuse for not starting their company; they blame it on “no capital” nobody wants to help me.”
The goal of this article is to provide you with various options to explore; however, you may have come across some of the ideas or others may seem strange, but the result is worth it if you act of these options instead of leaving your business idea on the drawing table.
Bring out your Piggybank
Before you roll your eyes and leave this page, no, this is not a child’s play, and I wasn’t joking. Every entrepreneur should have a piggy bank or personal savings. If you want people to believe and trust your business ideas, then you must be ready to invest your savings too. Furthermore, starting your business with your savings is a way of convincing people to buy into your business ideas and trusting you with their money. When you put your all, you have no choice but to see it grow and yield profits.
Furthermore, having a piggy bank or savings is a wise decision for any entrepreneur; if you want to own a big company someday, you have to start making some sacrifices. No matter your earnings, always reserve for your piggy bank. One of the winning characters of every successful entrepreneur is discipline. Discipline in finance management is an excellent trait you need to cultivate if you must succeed. If you want to persuade our friends, family, banks, partners or investors, you have to save more from your pocket money or paycheck.
Family and friends
The next most comfortable persons to get funds for your startup are your family and friends. They care and love to see you grow with or without having demanding extra interest rate from you. It is less risky to borrow from your friends and family than any other means.
Apply for grants and loans
Grants and loans are yet another way you can raise capital for your business. Although the process varies from country to country, what is common to them all is government, and international agencies take an interest in helping small and medium businesses to stand. The reason being those small or medium businesses also play a vital role in the growth of the economy. As a business owner with creative ideas that is looking for capital, you have to use this opportunity the government and the international agencies to raise money for your company.
Get a partner
This may not sit well with you if you are a “lone ranger” kinda guy. Nonetheless, you cannot just build companies on ideas without finances. Collaborate with someone who has the cash, who also believe in your business idea.
Angel investors are people who are ready to invest and help entrepreneurs or small business owners start and grow their businesses so long they are a slice of the profits. Please note that when choosing an angel investor as a source of capital, you need to understand what is at stakes; get a professional to help you with the practical details of the agreement before welcoming an angel investor or any other person on board.
Upfront payments from customers
You can persuade your customers to pay ahead; most clients do not mind paying upfront for goods or service. This may sound weird to you, but many entrepreneurs have built their businesses through this method. However, you need to gain your clients’ trust before they can pay ahead of the goods or services. You can also use goodwill to attract customers, which is why reputation can either enhance the growth of your company or ruin it. Always strive to protect your name and the name of your business.
Financial institutions tend to decline loan requests from startup entrepreneurs and small businesses than they tend to do with other established companies. Smaller businesses or startup entrepreneurs have a higher risk of folding up than big companies, so when applying for loans try as much as possible to reduce the risk associated with your type of business; it will increase the chances of securing a loan from the bank.
Crowdfunding is one of the favorite concepts in raising funds today. Mostly, it is a means you can raise capital from individual investors; nevertheless, it is not as simple as it sounds; crowdfunding is a broad term that covers different types of funding from various sources.
Furthermore, Kickstarter and Indiegogo are sites, which focus on raising funds from regular citizens to help startup projects or new products. It is a great option, especially when you need expansion cash. Irrespective of the kind of products you want to sell or services, you want to render, these types of crowdfunding work for all industries or niches. The investors may be the first to receive the products or services in exchange for their investments.
Rollover as Business Startups Programs (ROBS)
Rollovers as Business Startups program unlike crowdfunding is a legal type of program where business owners take their tax-deferred retirement funds and use them to buy or start a franchise or business, without getting withdrawal penalties. Nonetheless, you need to tread carefully when opting for ROBs programs. The rules are complex, and the Internal Revenue Service has warned people about these programs. Any wrong move you might end up owing back taxes, and expensive penalties.
In conclusion, getting capital for your business may discourage you especially when the people you hoped to get the money from, disappoint you. Nevertheless, if you really want to turn a business idea into a reality, then it knocking on several doors is worth the try. The truth is, most successful entrepreneurs have used some of these options listed above to start their company, and you too can do it. Best of luck!