Having a big business idea is great – but how do you bring it to life? You’ll require an office space, a website and tech team, and enough money to pay each month’s rent. In short, you’ll need funding to get started.
Sadly, not everyone has enough cash stashed somewhere to fund their business start-up. Some of us need some help to get our feet off the ground. On the flip side, there are many other ways you can fund your business and some of them are listed in this article.
Funding for your Business Idea
Bootstrapping is the term used to refer to the act of scraping together any personal funds you find. This may include credit cards, home equity and personal savings. Bootstrapping is a great idea, mainly because when you raise money like that, you are not left with the responsibility of paying extensive loans and monthly payments.
Friends and Family
Before trying eternal sources of funding, you could always try the people closest to you. Even when they are unable to fund the entire business idea, asking those close to you will help raise most of the money, especially when you try multiple people for assistance. If you’ll be getting fundings from relatives and friends, make sure you have your business plan ready at all times. This will make it easy for you to pitch ideas to anyone you approach.
Banks are known to fund all kinds of business start-ups. All you need to do is visit your loans officer and discuss how much you will need and what it will all be used for. Note that local banks and other types of lenders will consider your credit score to determine whether you qualify for a loan, the amount you can get and the amount you should pay in interest. A good credit score means less hustle when it comes to borrowing from a bank.
Venture Capitalist (VC)
VCs usually join your company at its earliest stages and will fund your idea in exchange for a portion of your business. While not everyone welcomes the idea of giving away equity shares of their business, VCs can provide you with access to other resources that will largely contribute to the success of the company. However, it’s important to note that VCs are mostly interested in technology and software sectors. If you are looking to start a pizza delivery company, you might not have much luck with venture capitalists.
Crowd funding is another great source of funding for start-up businesses. With crowdfunding, you get to pitch your ideas to investors or raise funds from anyone. Some major companies such as Oculus Rift were funded this way and grew up to become a multimillion dollar company.
There are many other ways to get funding for your business. Some of them are official and others require some creativity to get right.