So, you have an awesome new business idea. Great! But succeeding as an entrepreneur takes a lot more than just a good idea.
Just ask the 82% of small businesses that fail due to cash flow problems. Don’t set your business up for failure before it even gets off the ground.
By securing the right financing from the start, you can prevent a slew of problems down the road. Ready to get a crash course in starting a new business?
Use one of these five ways to get funded and set yourself on the path to success!
Bootstrapping
This is one of the most basic ways to get funded for a start-up. It basically means scrounging for and collecting all possible resources — from your piggy bank and college fund to savings accounts.
It’s a risky venture, but it’s a good place to start. You may also look into taking out credit cards or a home equity loan.
Bootstrapping is all about looking inward. After all, it’s your business, so who better to fund it than you? Plus, it means less money owed to outside parties once your business gets off the ground.
Borrowing
Some people believe you should never borrow money from friends or family. But if you’re looking to get funded, it can’t hurt to ask. The worst thing they can do is say no.
But don’t think just because these potential lenders know you that you don’t need to ‘wow’ them with your business plan. Explain your idea from start to finish. Show proof of the research you’ve done and what your first year in business will look like.
You might be surprised at how eager your friends and family are to get behind your cause.
Take Out a Loan
When you have no other prospects, taking out a small business loan is a viable option. The good news is, there are several loan options available based on your need.
If you’re looking to borrow less than $5,000 a micro-loan organization might help. Another great option is one of the countless fundraising sites available online including GoFundMe, Kickstarter, and IndieGoGo.
For these sites, you need to set up a campaign and choose a goal amount you want to raise. While some people reserve these sites for tragedies and family emergencies, many business owners got their start using fundraising pages.
Get Funded Using Local Resources
Most business owners (or soon to be business owners) are familiar with the small business administration (SBA). There are 63 SBA locations across the country, not to mention countless other small development centers.
This resource is more informational than financial. These centers will help you connect with other start-ups. They’ll also teach you how to network and pitch to potential lenders and investors.
New to the world of business? Let an SBA center explain the different types of loans available based on your needs and qualifications.
Looking for more information about the area? Check your local chamber of commerce for more information on obtaining local funding.
Venture Capitalists
Are you of the mind, “Go big or go home?” If you’re looking for $1 million or more in business funding, you should consider venture capitalists (VCs).
Venture capital is a type of private funding where larger firms fund small start-ups as an investment venture. Sounds like a win-win, right?
It can be — when done right. Be prepared to offer a concrete business plan that shows potential for growth, projected margins, and a unique angle. VCs are investing money for their clients, which means they’re pretty selective.
Most VCs invest for 5-7 years, so you’ll also need a reasonable exit plan if you choose to go this route.
Get Funded and Get Started Building Your Business Today
You’re finally ready to bite the bullet and get your new business off the ground. But the truth is, you can’t do it until you get funded.
Whether you gather your own personal resources or look to others for financing, you’ll need a substantial monetary foundation to get started.
So, what are you waiting for? Apply now and let us help you make your business dreams a reality.