So, you have a great business idea that you believe can work?
The sky’s the limit. The lack of capital too.
The average SMB needs somewhere in the vicinity of $10,000 as startup capital.
But having no money that you can invest in your venture doesn’t have to be an obstacle as there are many different ways to fund your startup.
1. A Little Help From Your Friends & Family
Many people start their business borrowing money from their friends and family.
You can usually convince them more easily than banks and investors that your business idea is worth a try.
However, it’s a good idea to make sure that both you and the ones willing to give you a loan get legal advice as well as to put everything in writing. Don’t forget that proverb which says “lend your money and lose your friend,” so be very particular about paying everything and everyone back on time.
2. Crowdfunding
Nowadays, with the help of the internet and social media platforms you can spread the word about your amazing business idea and sell others on it.
There are also different crowdsourcing platforms on which you can post your project, together with your business plan, goals, and all the other relevant information about your business, and ask others to support you financially.
You can opt for a donation, equity, or debt-based funding model.
3. Find a Strategic Partner
According to 80% of businesses, strategic partnerships are critical to growth.
Finding the right strategic partner can help you not only when it comes to funding your startup but also with decision-making and sharing the responsibilities of running a business.
This way, you’ll have someone who will be willing to invest some money and try hard to make things work.
Also, you will have someone by your side when you’re going through a rough patch, as well as reduce your liability if things don’t go as planned.
On the downside, you’ll have to share your profit too, so it’s important to find someone you can trust.
4. Get an Angel Investor On Board
Angel investors have become a popular source of funding.
These accomplished businesspeople have a cash surplus and are willing to invest it in innovative business ideas.
By getting the attention of an angel investor, you can land both the capital for your startup and a mentor who’ll be happy to share their valuable advice and experience with you, as well as connect you with other important people from the industry.
Such investors are usually gathered into networks and communities, and screen funding requests together, so it’s important that your business plan really stands out if you want to leave a memorable impression.
5. Check Out Government Grants
In many countries there are different government programs that help entrepreneurs get their startups off the ground. Here is a list of grants in Ireland.
It’s a good idea to check with your local Enterprise Office and see what grants and types of support are available for your line of business. If you’re a business operating in Singapore, you can find consultants for government business grants to assist you with the type of grants your business is eligible for.
What’s also good about this kind of funding is that there are also training courses which offer education in the field of business planning, marketing, as well as access to experienced mentors.
6. Apply for a Bank Loan
Although many people don’t like taking out a loan, the thing is that it can be a good idea if it’s for the purposes of starting a business which has fair chances of taking off and succeeding.
In order to obtain a loan, your credit history has to be impeccable and your business plan has to be detailed and needs to contain clear profit forecasts.
You’ll most probably be asked to offer your existing assets as collateral.
Although this solution isn’t favoured by many entrepreneurs, it’s worth mentioning that you’ll get to retain the full equity in your company.
7. Don’t Quit Your Day Job
Finally, as a last resort, it would be a good idea to keep your day job while you’re trying to launch your startup.
That way you’ll secure a paycheck at the end of every month, and you’ll have an opportunity to put something on the side and bootstrap your startup when the time comes.
It will be hard to work for somebody else during the day and moonlight as an entrepreneur, but this effort will eventually pay off as you’ll be able to support yourself through the early, turbulent stages of building your new business.
All these ways require careful consideration and weighing your options. Sometimes the easiest way to obtain funding isn’t the best one, in the long run, so make sure to think everything through.