Many people think that all you need to succeed in the business world is a good business idea. However, once you find that idea, turning it into a business that will bring your millions and billions requires equipment, staff, tech experts, office space, website, marketing and enough money to pay for everything each month. To put it simply—you need a lot of money to start a business. No matter if your business is offering a service or making a product, funding is necessary to get you off the ground. Luckily, there are several ways you can get funding for your business and bring your idea to life:
In the early days of their businesses, many successful people started practicing something called “bootstrapping”. This weirdly-named practice involves putting all your personal funds in one spot (your savings accounts, credit cards, home equity…) to pay for your business. This might be a perfect approach for some people and many business people continue to practice bootstrapping long after they start their business. With bootstrapping instead of borrowing or raising money, you will avoid any debt and all those expensive monthly payments that can prevent your business from blowing up. However, if you’re an ambitious entrepreneur looking to grow and expand your business quickly, it might be necessary to seek outside help.
Family and friends loans
Some people find it embarrassing to ask their friends and family for money, but it’s not at all a bad idea to go to your loved ones for help when you need it. Sure, your Aunt Linda might not be able to finance your entire business, but she might be able to contribute a few thousands of dollars towards your launch. And expect your closest friends and family to be great spokespeople and faithful customers.
If you want to be independent of your family and friends or you need a significant amount of money, you can consider visiting loan organizations to provide you with your financing. There are even organizations that specialize in certain types of loans, meaning you can get a loan firm that understands your needs to the T. For instance, agriculture entrepreneurs can get amazing farm loans from agricultural farm and land loan companies. No matter if you’re buying land or farm property, refinancing an existing farm or seeking funds for your agricultural operation—you can get financial support for whatever you need.
Entrepreneurs that require a smaller loan (up to $5,000) might want to contact a micro-loan organization. There are other options as well, like Kickstarter and IndieGoGo. These websites provide crowd-funding services and allow you to raise money from small investors, fans and various other supporters across the internet.
Find your angel
If you get lucky, you might get funds from a private investor looking to invest in an idea with a promising future. These “angel investors” are usually rich, experienced and established in their fields, but want to expand their reach. Usually, angels are willing to invest a lot of money, reaching into millions of dollars. Finding your angel investor is not easy, but you can consult with other experts in your field or look them up on association websites (these connect entrepreneurs and investors).
People who need at least one million dollars for their start-up might want to consider big capital funding like venture capital. Venture capitalists usually require a clear, detailed and foolproof business plan and strategy, but in return, they are willing to provide you with a lot of money. The difference between an angel investor and a VC is that the first one invests their own money while the latter invests other people’s money.
The good thing about VCs is that they invest in all sorts of companies, so you might have a shot in getting an audience or being considered. Also, they are willing to make big investments. The issue with venture capitalists is that they see all sorts of clients so you’ll need to stand out. Also, they are looking for a significant ROI quickly—usually 3-10 times higher than the investment in the next 5 years.
If you want to get your business up and running, it’s crucial to find funding. Once you have enough money in your savings, loans and investments, it’s time to give your heart and soul to your business and make your dreams come true. The world of business is unforgiving but also very rewarding once you start seeing the first results.
Eve Anderson is a marketing specialist turned blogger. Interested in sports and exciting travel destinations. Love to share content that can inform people.