Raising funds for a new business could be as daunting as having your first baby, maybe even worse. Women who haven’t given birth before, do find it difficult to understand how it works let alone bravely experience the adventure. However, after it is done, the joy that she feels overshadows the pain she went through all the while. That is how it works with raising funds for a new business.
It is pretty challenging at first but in the long run – when it begins to pay off, you are grateful for choosing to persevere. The “how” here is not a single or straightforward solution but a list of options that you may consider. In-as-much as you may start with one, there is a high chance that you would use all at different points to facilitate your business. Moreover, I will suggest that the first on the list is considered first before any other one. Without further ado, here are some ways to get funds for your small business:
Start with yourself
The responsibility to make a good start lies with you and you’ve got to give it your best shot. If you’re so convinced about the potential of the business, then putting in the little cash at hand shouldn’t be much of a big deal. Also, consider giving up certain liabilities and using assets to fund the business. This way, when you seek external support, sponsors are not suspicious of any foul play whatsoever; because you already have a lot to lose yourself. It also shows them that you really believe in what you’re doing – and that is vital to the success of any budding business. So start with yourself and then you can move on to family and friends.
Family and friends
The only set of people in the world who will readily buy your vision – excellent or crap – are our family members and friends. Why is this so? Simply because of the familial connection you share with them. Although this is the case, do your best not to “fall their hands.” For example, after everyone has pledged their financial support your business begins to struggle and then crash. That may cost you a little of their trust and readiness to support another time if there is one. So you’ve got to make sure everything is in place before selling your ideas to them. All the logistics involved also taken care of. Everything would turn out fine.
Bank loans
Bank loans help too. But before opting for this, you should have balance in your business, progress as well as structure. You may not need to have a huge collateral. Again, before going to the bank, ensure that your brand stands out, also come up with a good proposal. Sponsors are more interested in what they stand to gain so you have to make them believe your business is profitable. Everything should be stated clearly to avoid misinterpretation; also make sure to understand their terms perfectly well. In a nutshell, all I’m trying to say is, to get a loan your business plan must be on point.
Savings
It is advisable to not just wake up one morning and decide to start a business without adequate planning and savings. It is advisable to be a salary earner through which saving would become possible and sustainable. People who do not make adequate plans in this regard end up getting shipwrecked not long after the ship sails. It’s just like all those uncompleted buildings you see around, many of those have been around for a while and it raises the question, what happened? Most probably, the owner ran out of money to continue the project. It wouldn’t be progress if your business stays stagnant for a long while. To avoid this, make it a habit to save. No matter how little your income is saving should become a priority for you. And that can only happen depending on how much priority you’ve placed on your small business.
Business partnership
This is another viable option. Partnering with someone or a group could hasten things up in terms of financial contributions and otherwise. Here, the headache is now shared by different individuals and not you alone. However, you should be ready to share the profits with them because they have also become shareholders in the business. So you see it has its advantages and disadvantages. And well, those two opposites are relative. It all depends on you. If you’re not ready to share anything with anyone, fine, just opt for other means of generating funds here. If you like the idea then run with it. One thing you can do is to always make sure you own a larger share of the company. Need I tell you that not all original business starters can lay claim to what was once their business.
Network a lot more
Sell yourself everywhere you go but do not do it in a questionable manner, if you know what I mean. The more people know about what you do and the potentials it reeks of, the more they are interested in picking up the sponsorship form. Sponsors don’t finance what they are oblivious to, it is what they know, what they’ve heard or seen. So you need to up your game and get the word out. At church, on social media, auctions, meetings, schools…just anywhere at all where potential sponsors could be.
In conclusion, every small business can be a big one. It all depends on your attitude towards it. Think big and follow through with action and you would attain success. Financial issues are not peculiar to any one business and are just a test to test your candidacy for excellence. Once you pass this by following our tips above, raising capital wouldn’t be much of a problem again.