You have the idea; now you just need the capital. Finding ways to fund your business can seem like a full-time job most days, but it’s a necessary task if you want to start a business and make money on your own. Unfortunately, most people don’t have enough capital to start a business with their personal savings, and they’ll require funding. Getting the necessary funding to get your business off the ground can seem daunting and scary. However, there are many ways you can start fundraising for your small business; all it takes is proper planning. Here are fundraising ideas for your startup.
Crowdsourcing can help you easily get funding for your business, but you’ll need to be able to offer something to people in return. With crowdfunding sites, including Kickstarter, you can start making money online without putting in too much money or work on advertising your project. Ultimately, crowdfunding websites allow you to post campaigns and goals on their websites while rewarding donors who are willing to help you fund your business.
Posting on these websites doesn’t cost you anything, but if your campaign doesn’t reach its goals, donors don’t have to pay you anything. For this reason, it’s important to understand how much you believe you’ll be able to raise on a crowdfunding website. Of course, you can (and should) use multiple crowdfunding websites, especially if you believe donors can get behind your product and start shelling out cash.
Many contests are designed to help entrepreneurs get their businesses off the ground. You can enter industry-specific contests or entrepreneurship contests you believe you can win. For example, many universities hold contests for business owners in different industries. In many cases, you’ll need to submit either a product or a business plan along with your idea for the business.
If you win a contest, you can get some money, but you can also start earning media attention at a local level to help people get interested in your ideas. If you’re using a crowdfunding website and win a contest, you can let people know how they can invest in your business and what they can get out of it.
While many people don’t have enough money to fund their business ideas, some people do. If you’ve worked a corporate job and had the opportunity to save up, you can self-fund your business with your own money. Using your own money can help you prevent the need for business loans while giving you, even more, drive to succeed; because you’re putting your own money into the business, you don’t want to lose everything.
Additionally, self-funding your business can help potential investors understand how dedicated you are to your business. While you shouldn’t self-fund your business just to look good to investors, it is a great way to stand out from other entrepreneurs vying for their money.
If you’re already accepting money for your business, you can use your profits from sales to continue to fund the business. You can start simple, by selling just about anything. The most important thing you can do when trying to fund your business is to start selling products or services immediately. Making sales will generate the cash you need to build your business’ success.
Additionally, if you’ve already started selling products, you must manage your expenses and track your profits and losses with tax software to understand what you’re earning versus spending. Tracking your revenue and expenses can help you find more savings opportunities to help you continue to fund your business without taking out a loan or looking for investors.
Angel investors are private investors that can help you finance your business in exchange for equity. They differ from venture capital firms that use a fund because angel investors use their own personal money. You can find angel investors on a few websites dedicated to finding investors, such as AngelList, or you can use social media. If you choose to use social media, start by building out your social media business pages to start getting the word out about the type of investor you’re looking for and why they should invest in your business.
Venture capitals are managed funds that invest in companies with high growth potential. Venture capitals typically invest for equity and leave when there’s an acquisition. With venture capital, businesses can get mentorship and expertise to help the business grow and become scalable.
These types of investments might be ideal for startups that have already started generating revenue and experiencing fast growth. But unfortunately, venture capital as a funding option comes with a few downsides. For example, these investors typically want to see growth within five years to earn their money back and start making money on their investments. Additionally, they want to work with stable, large companies with strong teams.
One of the easiest ways to fund your business is by getting a loan. However, getting a loan means you’ll be paying more over the life of your business than you would if you were self-funding your startup. However, business loans are still a great option for those who don’t have investors and don’t want to deal with investors.
Getting a business loan can be difficult, especially if you don’t have a good personal credit history. To receive a loan from a bank, you’ll need to have a clear business plan, financial information, and a good or better credit score and credit history.
Grants are another great option for funding your startup. The government issues many grants to help small business owners get off the ground and start making sales. You can find more information about the available grants you might qualify for at grants.gov. While most entities that go after grants are nonprofits, for-profit organizations and individuals can still find grants for their industry or niche.
If you want to grow your business quickly, it’s important to find ways to fund your business. Of course, you can always self-fund, but many startups can benefit from working with investors and banks to get loans. Once you start generating sales, you can begin putting money back into the business to accelerate your growth.