Starting your own business is a big undertaking, and you’ll probably have to take out loans or use your own personal finances to start it. However, you don’t have to spend a fortune on startup costs to get your small business off the ground—even if you have no money saved up, there are still options available to you when it comes to financing your new venture. Take some time to explore the following methods and determine which one will work best for you.
Finding the Right Investor
Finding an investor can be difficult if you don’t have a big pile of money in your mattress or well-off family members who can help fund your startup. It’s typically a good idea to talk with other entrepreneurs and small business owners in your area. They may know of someone who is looking for new investments. If not, invest some time into researching venture capitalists. These investors will typically invest large sums of money into startups in exchange for equity in that company.
How Do You Get a Loan?
If you’re unable to fund your new business on your own, there are still several methods by which you can obtain funding from an outside source. A number of small businesses receive startup capital from banks through their normal loan processes. However, if you don’t have a track record or collateral for a standard bank loan, you might need an alternative approach. In these instances, asking for friends and family financing may be your best bet.
Friends and family members who believe in your idea will likely help you out with money in exchange for a stake in your company. In addition, many organizations offer grants specifically designed to assist entrepreneurs in starting up their companies. While it is generally easier to qualify for loans than grants, most grant programs require that applicants complete an extensive application process before receiving any money. Be sure to investigate all available options when looking into how to fund your new small business!
How Can Crowd-Funding Help You
Crowd-funding sites allow you to raise money for your small business innovatively. With more and more people turning to crowd-funding to raise capital, new ways are being introduced every day. The most popular form of crowd-funding has been through sites like Kickstarter or Indiegogo. These websites work by giving anyone with an idea or project access to investors willing to support them with their time, money, or skillset.
In addition, they typically offer incentives to contributors based on how much they donate. For example, if you donate $100 towards someone’s campaign, they might give you a t-shirt or other branded items. There are plenty of ways to crowd-fund for your business. You have to use trial-and-error until one lands. Luckily, there isn’t a ton of downside aside from the time it takes to set everything up.
