Having a startup business is the trend nowadays. As more technology brings in new ways to do business and more innovative business models are being set up, it comes as no surprise that a lot of people are starting to consider building their own small to medium business on their own.
But there is one big problem getting in a lot of people’s way – a large amount of capital. In reality, not everyone who wants to become an entrepreneur has the resources to be one. In many cases, business owners need to raise that capital with the help of other people. If you find yourself as one of those people, then it’s time to learn other ways to raise capital. Here are five tips that can help you:
This first option might shock some people. In fact, other folks will tell you to never use your personal assets as funding for a business. However, there are still benefits when you self-fund. One major benefit is that you will be very invested in your business. Although the majority of business owners are passionate about their business, bootstrapping your own business will force you to take the business more seriously.
This funding option is a lot easier to do because asking funds from family and friends requires fewer formalities and paperwork. At the same time, their being investors or creditors will be more convenient because they are always within your reach. You can negotiate more about interests, roles in the business, or more funds if needed.
If you have the time and the skill, you can also look into joining competitions with prize money. Joining competitions is one way to expose yourself to other experts in the field and at the same time, it will help you earn thousands of dollars in just a short while.
Of course, the hard part here is winning. Nonetheless, if you do your proposals and execution well, you can have a shot with almost easy-money that can be fully donated to the business.
Although this tip is not a funding option per se, it would be helpful if you know your industry very well. This will make it a lot easier to win the approval of people to whom you want to pitch your business. At the same time, you get to be more knowledgeable about how your business can have a competitive advantage in the industry it is in.
Another tip that isn’t a funding option is that you should have financials ready. Anyone who will be investing or lending money to your business will want to know how your business will stand in the future and the returns they will get from investing. Make sure that if you haven’t started the business yet, that you have the right and realistic projections. If you have already begun running your startup, then clean and available financial statements should be shown.
In conclusion, there are many ways to fund your startup. What’s important is that you have a sound business model and a clear projection of its feasibility and profitability.