The most challenging part of starting a business is figuring out how to find the funding required to get started. Yet, despite the challenges thousands of people jump into their own enterprise ventures every year.
Many small business owners choose to start small, paying only for what they can afford in an effort to get started. Any profits the business makes are reinvested to fund future expansion and growth plans.
Other entrepreneurs seek out ways to raise start-up capital to give them enough cash to launch the business on a strong note. Fortunately, there are plenty of ways to raise the start-up capital you need to get your business going.
Bank Financing
Many financial institutions will lend money to help fund a business start-up. You will need to present a solid business plan that shows you’ve done your research and have a clear strategy in place to repay the money you borrow. Some banks will require you to put up your home as collateral for your business loan. Other lenders may be willing to lend on the strength of your business, so it pays to do your homework before applying.
Business Grants
Many government departments offer business grants to assist entrepreneurs with the cost of starting a business. The competition for free government money is fierce, but it is still possible to obtain grants if you know where to look
Venture Capital Investors
There are companies out there willing to extend venture capital to entrepreneurs to help them start a business. Venture capitalists may expect you to repay their investment after an agreed period of time. Some may ask for a percentage of ownership of your business in return for their investment.
Angel Investors
Angel investors have the financial backing to help new entrepreneurs start a business. Your angel might be a family member or friend who has faith in your ability to build a strong business. You may also receive offers from angel investors wishing to partner in your business.
Crowd Funding
Crowd funding can be a great way to raise the capital you need. The idea behind crowd funding is that many small investors may be willing to offer cash to help you achieve your goals. Many successful crowd funding campaigns offer investors an incentive or initiative to invest in your dreams, such as a free product or a mention in a book or even one share in your future company. There are plenty of crowd funding websites around, giving you the ideal portal to announce your plans.
Launch Online
While you may have a vision of a huge store filled with customers, if your budget doesn’t cover the start-up costs, you’ll have to come up with another way to get started. Consider whether it’s possible to launch your business online first as an e-commerce option until you have sufficient funds to afford a brick-and-mortar office or store. Once your online enterprise is churning profits you have the opportunity to expand your venture.
Bootstrap It
While it would be great to have a few million dollars at your disposal to get your business up and running, the reality might be vastly different. If you really can’t find any ways to raise enough start-up capital to set up your business right away, you might be able to afford to launch on a shoe-string budget instead. Instead of hiring staff right away, do as many tasks within your business on your own until you can afford to hire help. Buy only the stock you realistically need right now and order as required. You’ll save money on buying big and holding stock that may not sell.
If you’re serious about becoming an entrepreneur and launching a successful business of your own, think about all the options open to you. Work out exactly how much you need to start your business. Make plenty of inquiries about potential sources of capital funding and really spend time developing your business plan. If you use all the resources available to you, it should become easier to find the capital you need to make your business dream a reality.
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