Funding your start-up is full of challenges. Even seasoned entrepreneurs have to be creative and seek out new sources of capital. Happily, there is a range of funding options to choose from when starting up a business. The most viable of which you can read about below.
Bank Loans
Bank loans are often the funding solution that entrepreneurs think of first when it comes to starting up their own business. In fact, most banks will offer business loans, making them a viable option for many.
However, bank loans for businesses do come with some strings attached including having to pitch a concept, projected figures, and risk assessments to their representatives before you are given the all clear.
In fact, if you don’t pass the somewhat rigorous process of application, interviews and credit checks associated with this method of funding, you can be denied the money that you so desperately need.
After all, banks are likely to be more conservative and won’t sink money into an operation that they believe to be too risky. Something that can leave smaller and higher risk startups out in the cold when it comes to securing the funding they need to launch.
Investors
The next option for entrepreneurs looking for funding for their startups is to find investors that are interested, and that can stump up the money they need.
In fact, there are a few different types of investors that may be of use in this situation including what is known as seed or angel investor, a person that has considerable capital available to plow into your business.
The major advantage of this type of investment is that the individual or organization involved may also provide mentorship as well (think Dragon’s Den) and this can help you negotiate the perils of the business world with fewer costly mistakes, and so can help your startup have a much higher chance of success.
The Dragons above are a great example of an angel investor.
Of course, you will need to hand over a percentage of the shares in your business to such an investor. Something that many startup owners can find difficult, especially if it has an effect on their ability to autonomously manage their company.
DIY – Bootstrapping
Now, you don’t actually have to find the funding for your startup anywhere, if you bootstrap your business and pay for the startup yourself. Of course, unless you have has a recent windfall, or are well off in the savings department you may not have the cash available to launch a business, no matter how small.
Although, there are ways to make the type of money needed for this sort of venture, including investing in the stock market. Of course, doing so is a significant risk, and there is always the chance that you will lose the money you invest rather than make a profit on it, and this risk is compounded if you are looking for a quick return.
However, some tactics can help you reduce, if not eliminate the risk involved. One is to educate yourself thoroughly on the market you will be trading in.
It is also wise to invest in the right type of software for observing and tracking the market, as well as indicators like macd which can show you when to sell and when to buy. Although, you will need to familiarize yourself with the macd settings for the particular market you are trading on to make this as effective as possible, something you can get some help with online. Then, with a little luck, you can put yourself in the best position to make enough of a gain from your investment to raise the money to start up your business.
Crowdfunding
Lastly, if the other funding options are not suitable, it’s worth considering using crowdfunding to startup your business instead. Now, crowdfunding isn’t quite as simple as creating a profile stating that you want to start up and company and then waiting for the money to come rolling in.
In fact, how it tends to work is that you need to display a prototype product, along with added bonuses for different levels of financial backing. This will then encourage private investors to pledge money to words your total goal.
Of course, you actually have to take that money and produce and deliver the product you have promised with it. However, if you do your calculations right, you will be able to get things off the ground, and so get your business through the tricky seed and startup phases. Something that will put you in a much better position to start manufacturing your product in bulk and allow you to begin trading for real.
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