The first challenge that most people are faced with when starting a business is getting the initial funding. When you think about everything you would need in order to get your business up and running, you might wonder if you’ll even make it, considering that you will still need money for your own personal expenses.
As an aspiring business owner, you may need thousands of dollars to get your business off the ground. You probably have done extensive research on the kind of business you would like to start, but none of it talks about how you can raise money to fund your business endeavor. However, a good number of people successfully raise money each year to pump into their startups, which means that you too can. But how can you do it?
There are a number of ways in which you can get money fast for your startup. In this article, we seek to look at a number of them to get you started;
This is always a feasible option for anybody who is trying to start a business. The chances are that you have some savings or assets. This method involves either selling a portion of your assets or getting money from your reserves.
You may also opt to borrow some money from your local bank against a particular asset. While this is one of the most viable ways to get funding, it may not be for everyone. For instance, if you neither have an asset nor enough savings, then you would have to explore other avenues.
- Sell items you no longer use
Every household accumulates a number of items that are no longer needed. This could be electronics, home appliances or even pieces of furniture. As much as you may have no use for these items, someone else may find them invaluable. What you can do is sell these things either online through sites like e-Bay or a garage sale. In turn, you may end up raising a significant amount of money to fund your business.
- Seek funding from family and friends
There are people who care about you and want to see you succeed. These include your family and friends. So, if you believe in your idea, you should not hesitate to reach out to these people and ask for help. In fact, your family and friends are less likely to charge you interest on the money borrowed from them.
The chances are that you will be motivated to pay back because if you fail, you risk creating some awkwardness in how you relate with them. Besides, you don’t want to fall out with a close friend or family member because you couldn’t pay them back.
If you are having problems raising enough money for your business, you can look for a partner with similar interests and combine forces financially. You will not only spend less, but also have someone to share the losses with.
However, you should be keen on choosing the right partner. Apart from sharing an interest in your select business, it should also be someone who is trustworthy and open-minded. Also, ensure that whatever partnership you get into is clearly defined. This means that you should agree on whether it is a 50/50 partnership or you will retain more stake than your partner, or vice versa.
- Apply for a loan
Taking a loan is one of the fastest ways to get funding for a startup. There are, however, a number of factors to consider before you go seeking a loan. This includes your financial history with the institution you would like to borrow from.
Your credit ratings will also play a crucial role in determining whether you qualify for the amount of loan you wish to apply for. Most importantly, you have to look for a lender with favorable interest rates as well as sufficient loan repayment duration.
- Peer to Peer loans
Traditional loan systems are not for everyone. With other modern loan solutions like the peer to peer lending platforms, you may be inclined towards getting your funding in this particular manner.
A P2P loan platform works in a unique way. You as the borrower simply communicate your needs with a number of lenders. Various investors go through your request and if one or more is convinced, then you are given the full amount requested.
Once you are funded, you are expected to pay back a certain fixed amount of money every month. This happens through a platform that links to the lenders. You also pay the installments through the platform.
Some of the renowned P2P lending platforms include Prosper and the Lending Club. One of the best qualities of these platforms is fast approval rates. They are an undoubtedly viable way to raise capital and the cost of processing them is relatively lower. You should, however, know that your credit score counts, and if you default, you will ruin it.
- Start with what you have and re-invest the profit
You already have a target of the amount of money you need to start your business. How much money do you have and how much are you looking for? You should also ask yourself whether the money is enough to get you started. Additionally, if you used the money you have to start the business, is it likely to earn you a considerable profit? If it is, then you can invest it in your business and plow back the profits instead of borrowing more money.
The bottom-line is that so long as you have a good business idea, nothing should stop you from starting your business; not even the lack of funding. Moreover, every successful entrepreneur started from somewhere. In fact, some of the global giants like Hewlett -Packard started out in a garage and grew to where it is today. With proper preparation, planning, and effort, then there is absolutely no reason why you shouldn’t triumphantly get your business up and running. You can try any of the above ways to get started.