Starting a business requires money and the first question would-be entrepreneurs need to ask themselves is: ‘how do I get the money to start my business?’
Getting an answer to this question would no doubt enable your business kick off in a big way.
You can get money to start your dream business by engaging your personal savings, borrowing from family and friends, selling your personal effects, using credit cards, taking a bank loan or involving angel investors.
Personal Savings: Before you ask anybody for money to start a business, you must have some savings handy. That is the only way to convince other people that you truly believe in your dream. For starters, I would never give money to an entrepreneur who cannot risk his savings on his business. I have to be convinced he truly believes the business would work out. So, if you’re nursing the ambition of starting a business, start saving now and don’t give me ‘the-money-I-have-is-not-enough’ excuse because I won’t take it. If you live frugally, I believe you can save out of the little you currently have. Start saving just 1% of your income and when you become used to it, jerk it up to 2%, keep doing so until you find yourself comfortable with the whole idea of saving. It pays to do so, especially, if you want to start a business, somewhere down the road.
Family and Friends: This is another sweet way to get funding for your business start-up. Family and friends are a group you can always trust to help out as long as you convince them about the profitability and workability of your business plan. The loans you would get from this group come with ease and even ease of payment, unlike that of banks, which may sometimes, leave a bitter taste in the mouth.
Selling Your Personal Effects: Aside savings, you can sell some personal effects to raise the cash to fund your start-up. Mutual funds, stocks, bonds, CDs, pieces of art, antiques, old and new cars, jewellery, landed property – all can be liquidated to get the money you need.
Credit Cards: Credit cards can be one of the best ways to fund a business because they are both easy to use and so flexible. When used wisely, credit cards can really be a benefit to your business. You just need to be smart by using cards with the lowest interest rate first. This will enable you pay less interest. It also helps to plan ahead and clean up your credit before extensively using your credit cards.
Bank Loan: You can also decide to take a bank loan if you really require a huge sum to start. In several countries of the world, there are Government-supported grants as well as private sector-driven loans. Like in the United States, the Small Business Administration (SBA) plays a key role in getting entrepreneurs’ start-up funds. You just have to find out what is applicable in your region and apply for one. But, to successfully get a bank loan, you must draw up a winning business plan, articulating your business goals, marketing strategies, expected profitability levels, etc
Angel Investors: Aside the banks, you can also involve Angel Investors. Who are they? You May ask. Angel Investors are high-net-worth individuals who fund business start-ups; provide consultation, direction, and advice. Their primary goal, like any other investor, is simple - make money. However, they have other qualities which differentiate them from other investors. They are more involved in the business from start-up as they act as mentors and advisors to entrepreneurs.
There you have it, six ways to get funding for your start-up. Engage them today for effective results. But before I end this article, let me quickly say that as much as money is important in starting a business, getting a solid business idea is more important because without it, even if you have all the money in the world, the business will fail, so, spend time in creating a practicable and profitable business idea before looking for funding.
One good thing about having a solid business idea is: you don’t have to do a lot of convincing to get investors put money down.