Have you been dreaming of starting your own small business? If so, you are not alone. Many people want to go into business for themselves. Unfortunately, the thing that usually holds them back is not having enough money to get the business off the ground. This lack of financing has killed many small businesses before they even get started. Fortunately, today’s world offers many ways for entrepreneurs to get financing for small business ventures.
Here are some ways for you to finance a small business:
1. Friends and family.
If you have some close friends and family who are willing to loan you some money to get your business started, this is always a good way to go. Because they love you, these people will not be constantly calling you and demanding an installment payment for the money they lent to you. They will more than likely give you all the time you need to pay them back. Also, they will probably not charge you any interest on the money they lend you. This fact alone will save you an enormous amount of money.
2. Small business loan.
If you can’t get the necessary financing from friends and family, you might want to try getting a small business loan from a bank or other financial institution. You should shop around and talk to many lenders in order to find the lowest interest rate for your loan. If your small business involves adult entertainment, online gambling or some other industry that is considered to be high risk, you should also look into setting up a high risk merchant account to handle your customer transactions.
3. Pre-sell your products.
This method of obtaining financing is gaining in popularity. Put together a prototype of your product and post photos and a description of it on your website. With any luck, many people will pre-order your product, giving you the capital you need to begin the manufacturing process.
When it comes to getting money for just about any idea, crowdfunding seems to be the wave of the future. There are many websites specializing in crowdfunding. Basically, you post your business model or its general concept on a website in the hopes that people will donate to your cause. Since this money is being donated, you will never need to pay any of these people back. There is also no interest. However, a portion of the donations go to the website.