Providing enough funding for your business is not a simple task, yet, it’s something that every new entrepreneur has to deal with, sooner or later. This is not just about getting enough money to launch a business, it’s also about finding a way to keep the business running until it becomes profitable enough, which can be quite a while. Even though you’re not making enough money at the time, you still have some obligations towards your suppliers, employees and agencies that you’re collaborating with, so, here’s where you can get the money to deal with it.
- Angel investors
The concept of an angel investor is probably the first idea that a lot of people have in mind when it comes to the idea of finding an investor. Needless to say, this is something that rewards your company double-fold, seeing as how you get patronage not just in resources but also in advice and a network of contacts. The problem, however, lies in your ability to secure an investment. You see, these are experienced investors, which means that they’ll expect an efficient pitch and well-developed business plan. Your ability to do so will affect whether you manage to secure funds for your business.
2. Venture capital
There are some companies that specialize in investing in small businesses and it might be a good idea for you to try and attract their attention. Due to the fact that they are working mostly with high-risk-high-reward kind of businesses, they need to have equity in a large enough number of companies in order to ensure that they have a net gain. This means that you have a great shot at making it. Unlike angel investors, if they do decide to invest, they are more likely to take an active part in running your business, which is both a blessing and a curse.
3. Securing a loan
By far the most common way of funding your business is to get a business loan and there are two major types of loans that you need to consider. First, you have secured loans that work by having collateral, a decent credit score or a person with a decent credit score (and/or collateral) to vouch for you. As you can see, this can be both problematic or just outright impossible for you to provide. In that case, you have platforms that specialize in providing no security business loans. Some of these loans might have quite favorable terms, which could definitely make some difference.
Even though crowdfunding is a method that’s been around for a while now, online platforms have made this so much easier to pull off. For this to work, you also need to be good at creating a pitch, often in the form of a great presentation. Your ability to edit a video, keep your content entertaining and persuade people that what you’re offering is something that they need might be a determining factor in your ability to raise enough funds. Just set a realistic goal and make sure to start working towards it.
5. Finding a partner
Sometimes, the simplest solution is the most effective one and if you can’t finance your business on your own, perhaps you can find someone to help you share the burden. This, however, is not a decision that’s so easy to make. On the one hand, you get someone to share not just the expenses but the administrative tasks with. On the other hand, this also means giving up some of the control over your company which is definitely not something that a lot of people are ready and willing to do.
6.Keeping your day job
Launching your business is not all the trouble you’ll encounter. You see, for the majority of businesses, it takes between six months and one and a half year to become fully profitable. By the time this moment comes, you’ll need to have a steady income that you can use in order to improve your cash flow. Keeping your day job is one way to achieve this. The biggest problem with this method is the fact that it takes too much time, while you’re already stretched too thin running your enterprise.
Unlike some other tasks, knowing how to fund your business is something that you’ll have to deal with every step of the way. Regardless of the size of your business, your industry, your ownership structure or your business plan, you’ll still have to come up with a way to provide enough resources for operational expenses, growth and adaptation. We hope that you’ll find the above-listed six tips to be at least of some use on this quest.