Your idea is amazing but you need money to start your business. That may not be so easy in today's competitive environment if you are looking to get financing but there are ways to getting money to start a business. Make sure you think of all of them.
Consider the following sources of money to start a business:
Your Own Money
This may seem obvious but using your own money to start a business is the first place you should be looking. Instead of getting a loan or borrowing from others, you should see if you can afford to make it happen on your own.
Do you have savings to utilize?
Can you raise additional funds over the next several months by doing additional work?
Asking Friends and Family For Money to Start Your Business
This may sound scary but your family and friends may turn out to be very supportive of your idea. Before asking, consider the following:
- Do you have any prior business experience?
- Have they heard about your idea and seem excited?
- Have you proven to be a trustworthy person that is good at handling personal finances?
If the answer to any of the above is no, be prepared to respond to these questions before considering approaching them. Being prepared and honest with your friends and family before asking for money to start your business will help to show them that you are serious about your new venture.
Consider whether the money you are asking for to start your business will be a loan, equity in the business, an investment, or simply a gift. Many people may want to have a say in the money to start the business is spent. Are you comfortable with this idea? Are you looking for partners? Give all of this some thought up front and negotiate a deal you are comfortable with before moving forward.
Using Crowdfunding for Getting Money to Start a Business
There are multiple online platforms for using crowdfunding to raise money to start a business. Some examples are Kickstarter, Indiegogo, and RocketHub. These websites let you share your startup idea with the public. Then, the public can donate money in return for items, services, or a share in the company.
The key to success with crowdfunding for getting money to start a business is to have a unique story that is well crafted and presented. You can raise money for your startup and introduce your product or service at the same time. Keep in mind, these platforms are very competitive for getting money to start a business and it will require a fair amount of social media skill and exposure.
Seek Angel Investors for Getting Money to Start a Business
Angel investors want to help new companies and make a big profit in the long term. They have large sources of money and therefore may solve getting money to start your business all in one shot. Be aware, angel investors tend to ask for a portion of your company or shares. They may ask to be partners or have control over startup decisions. Because of their financial commitment, they have a vested interest in your success and want to ensure that your new business brings in high returns. This can result in very high level consulting to further your business model.
Consider Financial Institutions for Getting Money to Start a Business
To many, this may seem like an obvious choice but, unfortunately, it is easier said than done unless you have collateral and a strong personal financial statement. If you have tried all of the other ideas for getting money to start your business but haven't succeeded, this may still be a viable option.
Check out local resources and lenders. There is the SBA, Small Business Association, that will often times guarantee loan programs with local lenders. Before getting any type of loan, be sure you understand the fees and interest involved and most of all, have a plan to pay back the loan. Borrowing money from a financial institution to start a business is usually not a good plan if you have limited experience or lack the financial strength to pay back the loan outside of profits from the new venture.
Regardless of how you attempt to seek getting money to start a business, the important thing to do is, not give up! If you are determined to get it done, you will find a way to make it work. Many of the guests that are interviewed on the Wealth Junkies show started with little to no money and have gone on to build successful businesses. In many cases, more than one.