Putting all your eggs in one basket will never be viewed as an ace business strategy. Especially don’t rely on it, when it comes to funding and supporting your new business. Expanding your sources of financing will allow your start-up to withstand potential downturns better. It also enhances your possibilities of getting the right funding tailored to your specific needs.
Always remember that bankers do not inevitably see themselves as the single source of your funding. In fact, lenders will see you as a proactive entrepreneur if you have explored or used various financing options.
The capital that investors lend to help start a new business is often referred to as seed funds. If you are an upbeat business owner, you can start looking for potential investors by talking to your loved ones (friends and family), making connections with other relevant parties, and taking part in start-up events. In order to gain the trust of investors, you will need to prove to them that you have a plan of action in place to turn your ideas into a profitable business.
If you’re looking at how to get money to start a business, consider the following list of suggestions to make an accurate decision.
Funding your business yourself
Nowadays, 90% of start-up businesses are self-funded. There are myriads benefits to this strategy, including controlling the business and avoiding giving up business equity. However, it can put your assets at risk. It may also take longer to raise enough savings to make such funding possible. Think about its pros and cons carefully before making the decision. Remember that your future investors will gain confidence if you invest your own money in your business.
But do not invest all your available assets in your business takeover project.
Talk to your friends and family.
The people who’re closest to you will often be pleased to see you make your dream come true. That’s why they should be the first people you go to when you start raising capital. Take the time to discuss it with them to describe your business vision. Besides, explain to them how you would use the money.
Your loved ones may not be able to match donations from professional investors. However, every dollar you receive will take you one step closer to your goal.
Evaluate the advantages and disadvantages before you ask for money from your loved ones. If your effort fails, the money you borrow will lose. Or maybe your friends refuse your request. Think about it from all angles before you make a request or take a significant loan.
With the increasing integration of the Internet in businesses, more business leaders are turning to crowdfund platforms. It involves a large group of people for funds on the dedicated crowdfunding website. Indiegogo, Kickstarter, Babeldoor, Accion, or Biznessful are familiar to obtain seed capital. With this financing solution, investors can decide to donate as much as they want. In this way, the overall risks are minimized, which is more likely to attract donors.
Include a detailed presentation of your business plan or product. This will mainly be a presentation written at the beginning and designed to sell the potential of your idea to collaborators.
Attend a start-up conference.
These events allow business leaders to meet potential investors and talk about their projects directly. Search for start-up conferences in your area to purchase tickets or reserve a spot as a presenter. You will need a detailed presentation or a working prototype of your product if you want to reserve your place as a presenter.
The biggest advantage of exhibiting your concept at this kind of event is, it allows you to contact potential investors directly.
Get a bank loan.
Go to your bank and talk to a loan officer about applying for a small business loan. You should have an overview of the amount you will need to start trading. Besides, you should agree to repay the amount according to the bank’s terms. Treat your loan application the same as any other presentation. In other words, try to be professional and enthusiastic. Moreover, prepare yourself to sell the potential of your nascent business idea to the lender.
Apply for a government grant.
If you’re looking to raise seed capital for a growing business, apply for a grant under the Small and Medium Business Funding Program. To get a government grant, you need to do some research to find out which one suits best to you. SBA sites, Veteran’s Outreach Business Centers, and Women’s Business Centers are providing grants to entrepreneurs of small businesses. SBA has offices all over the United States. It guides you in not only available business grants but also business training and consulting.
Whether you want to utilize your personal credit card or business credit card, it’s your own choice. But don’t take this option too lightly. Most often, credit cards have high-interest rates. So it can enhance your monthly balance. You could end up with a balance of debt far beyond what you planned, which could wipe out your novel business.
Are you still confident that it will be a beneficial route for you? Then Go head! However, ensure that you’re using the card on the lowest interest rate and superb refund terms.
We hope this guide helps you to get money to start a business. Feel free to share it on social media and let us know your reactions in the comments.