Finding the money to fund your own startup business can be extremely challenging, especially in the current economic climate the world’s financial market is currently in. With fiscal restraint being put into action in countries all over the globe, finding spare money to risk on a new business idea is rare.
However, more people than ever before are leaving their traditional 9 to 5 forms of employment and are instead going it alone working for themselves and starting up their own business. Yet securing funding is one of the biggest challenges that a new startup business faces, especially as the first few years of a business tend to be the most expensive. So, here are six suggested options that you may want to consider when trying to find funding for your business.
Seek a Bank Loan
Getting a bank loan is much more difficult than it ever used to be as banks can no longer afford to take the risk when it comes to new businesses. Therefore, lending requirements and standards have gotten much stricter in recent years and you will be required to provide evidence of how you plan to make the business a success if you were to secure the loan.
Banks like to know that their money is in good hands and will be put to good use so may ask for a detailed business plan from you to show that you have thought carefully about your startup idea. However, while getting a bank loan is more difficult than it used to be, it isn’t impossible. Banks such as Bank of America and J.P. Morgan Chase do have additional funding set aside to lend to small businesses that show potential. Therefore, you should spend some time working on your business proposal before applying for a loan at a bank.
Crowdfunding is a new and innovative way to raise money for a project or business. While you are unlikely to raise thousands of dollars using this method, it is a fun way to get money together for a low-cost business idea. There are many crowdfunding websites online that you simply make an account on, set up your page with the details of your project, and then ask people to donate to your business idea.
Before going down this route, you should be aware that crowdfunding is a one-off cash injection and not a long-term investment. Incentives are often offered by project creators to encourage people to pledge to the project. For example, if your business idea involves the selling of a product then you may give those who give money to your idea a free sample upon launch.
Look for a Business Partner
While you may initially want to go it alone with your startup business, you may have to consider looking for a business partner who can help you share the cost of funding. You may initially be against the idea of working alongside a business partner, but it can be a great way to share the pressures and financial concerns that come with your own startup business.
However, in order to successfully convince a business partner to get on board with your business idea you would have to prove that the business would work and that they would get the money they put in returned to them, as well as a profit. You would likely need to create a good business plan for this and show a potential business partner that you have the skills required to be self employed and make a profit running your own business.
Raise Money Yourself
While it isn’t the quickest or easiest way to find funding for your business, finding the funds yourself is another way that you can pay for a startup without having to look elsewhere for help. This is often referred to as bootstrapping, but it basically means you have access to some saved up funds that you can easily obtain to keep the business going. It will require you to have saved up for some time in order to have your own money to rely upon, but if you are passionate about your idea and are sure that it is going to work, then you should be happy to invest your own savings into the project.
You may also find by investing your own money into the business that your family and friends would be more inclined to contribute as well. Asking your family and friends to help is a good way to kick start your business as they are less likely to be strict with interest rates and payback periods.
Apply for a Pay Day Loan
If you aren’t in the position to be able to save up big sums of money and your family and friends can’t afford to support your business idea then you may consider applying for the easiest payday loans offered by Bonsai Finance. Using their online personal loan calculator, you can be connected with hundreds of lenders that suit your needs. This is ideal if you only need a small amount of cash to start your business, and you know that you’re going to make a profit during the first month.
Research Government Grants
You may find that some governments have business grants available to small start up businesses. Some government programs offer startup funding to businesses who would otherwise struggle financially. Government funding is often quite generous, so you may get a substantial amount of money. However, there will likely be a lot of competition when it comes to these government grants so you may find yourself having to compete with other start up ideas.
This may include a presentation or a detailed business plan, and you may face significant scrutiny in order to gain approval and be granted the funding. There may also be requirements and regulations when it comes to the category of startups governments are prepared to contribute towards.
Funding your own startup is one of the most difficult aspects of going it alone in the world of business, but if you are dedicated and believe in your business idea then you shouldn’t have any trouble convincing yourself and others that it is a worthwhile investment.