Funding a new business can be difficult, but unlike before, you’ve now got so many more opportunities out there to earn money. Starting your own business, whether that’s online or not, is something that a successful few only do because it requires a lot from you to begin with. Before you start making money and getting additional help, you will have to do a lot of the legwork to begin with.
So here are some ways to help fund a new business.
Create Campaigns For Family And Friends.
You’ll be surprised how giving friends and family can be when it comes to supporting you and your dreams. When you start a business, a lot of business ideas end up being given the backing of online campaigns and fundraisers. You can raise tens of thousands as an investment if you’ve got your pitch right, and it’s something that friends, colleagues, and families will all believe in. Thinking about your fundraising, you want to be able to provide a backstory of how this all came about and why anyone should invest money into it. Obviously, you need to rely on whatever funds you can provide, and then this is worth mentioning in your brief. Make it engaging and don’t try to ask for money within the first few seconds because they know what they’re looking at is a fundraising page. If it’s not obvious, then you need to make it so.
Set a goal that you’d like to achieve over the course of the fundraiser and ensure you’ve put in some incentives for the level of funds that people put in. It could be an exclusive to try out the product or service when it’s complete, or you may be throwing a launch party, which they’re invited too. The more attractive these fundraising rewards are, the more they’ll want to give more to receive better rewards.
Look At Your Existing Contacts.
It’s worth remembering that you probably have a lot of friends and family out there who will help, but the contacts you have may also open doors to other ways of getting money. Those who work in banks, for example, investors or those within the business world, may be able to shed some light on what’s out there. It might not be something you’re aware of being available for new start-ups or businesses, but there is plenty out there to take advantage of. Spend the time on these contacts, whether that’s taking them out for a drink perhaps, or going for a meal. Their advice and awareness of what’s out there might be just what you need in order to access the available funds.
Consider Angel Investors.
Angel investors are something that exists in many industries, and it’s a list of individuals or companies that are willing to back the company, and it’s usually in exchange for a slice of ownership. Facebook is one example of how this scheme has worked effectively in the past. Anyone who becomes an investor will have plenty of money to give, and even though it’s an investment they want to profit from, not all investments are going to be successful. So even though you want your own ideas for the business to succeed, there’s no that pressure of having to pay it all back if it goes up in smoke.
However, the advantage of angel investors is that they do more than just idly sit back and wait for the money to come in. They are usually able to offer their own business advice to help get your company off the ground and to give you a better chance of being successful.
Take Out A Loan.
One of the most traditional formats for getting money is a loan, and although many loans might come with a few hidden charges, there are plenty out there that are much more affordable and worth taking out. Choosing the right loan is important, and you want to make sure that whether it’s a New Horizons Loans or one from the bank, that it suits your needs, and you’re able to pay it back on time.
Be sure to look at the various interest rates involved and that you’ve thought about how quickly you’re able to pay the loan back. When borrowing money, the quicker you pay it back, the better. Otherwise, those interest rates are going to be taking more money away from you. Think about how much exactly is it that you’ll need in order to get your business where it needs to be. This initial sum of money is merely getting your business off the ground, so you don’t want to be taking more than you need at this point in time. You can always revisit getting out more loans once your initial launch has been successful. Try to stick to just the one loan too because having more than one will make it a more uncomfortable experience of paying it back in time, not to mention the added interest.
Use Your Savings.
Savings are there to be used in times of need, and everyone should have some semblance of savings in life. We never know when a disaster could hit or when unexpected bills could floor a household. For your business, you will first look at what you have to offer to fund in terms of what’s needed. Saving money can be done in every household, as there’s always money that’s spent carelessly, and little luxuries in life can be cut out if needs be. Think about how much you could set aside to be able comfortably to live with whatever’s left. You don’t want to put yourself in any serious trouble, particularly if you have a home to pay for and have others you are responsible for.
Ask For Investors And Sell Shares.
As well as the angel scheme that is mentioned above, you could just approach known investors or people that you’ve connected with both online and in person. Although some investors may ask for partial ownership, you may also have investors who want to receive a sum of money from any profits you make. That could be something that if the investor feels is more applicable to your business, they might do. However, the more that invest in owning shares of the business is going to hopefully say a lot about your idea that you have for the product or service you’re trying to get out there. Having investors that believe in you and can also contribute to the business in order to grow it and be more successful, is essential. A lot of businesses will end up failing because of the lack of experience of running a business. And unless you’ve studied business studies or have experienced it first hand before, how would you know?
Be careful, though, when it comes to assigning shares because you don’t want to be giving so much of it away, that you are losing out on profit. Of course, you may need the money but in the long run, if successful, you need to ensure you have the majority of the shares in your business, otherwise you could risk being chucked out of your own business.
Funding a new business is possible, you just need to be willing to do the research and prove to those investing or paying towards an idea, that what you have is worth it. Be passionate about your business, and the success should follow off the back of it.