Do you have a fantastic idea for a startup you know will succeed given the chance, but simply lack the funds to get things up and running? If so, then you’re in the right place! Welcome to your brainstorm session on how to secure the money.
In a previous article, we discussed the first three ways of seven that can help get your business off the ground (a post you can find here), and now, we’ll bring you the final four!
4) Ask Private Investors
Asking family and friends for a business loan is perhaps the most comfortable option for many, and easiest as those close to you are more likely to stand behind your cause.
However, to avoid relationship breaks and other problems, owners should lay strict guidelines for the investment up-front, including details on how much is needed, the repayment schedule, and how much interest or stake in the company they will receive in return.
Another similar option is those called “angel investors”. A typically experienced businessperson, angels offer financial backing to companies in which they see potential, but usually expect a say in company dealings in return. Before pursuing a loan with an angel investor, discuss clearly the terms and expectations surrounding it to judge what’s best for your business.
5) Create a Company Credit Card
Another way to fund your business is to open a company credit card for all your operational expenses. Though capable of high interest rates and penalties for overdue balances, most businesses can get a company card even if they’re brand new, provided that the owner’s personal credit score is good.
6) Utilize Crowdfunding
A popular option nowadays, crowdfunding organizations like Kickstarter uses the public funding of those who are interested in your cause to reach a financial goal – often in exchange for exclusive products or services.
Though helpful with generating an invested audience, crowdfunding requires an active hands-on approach of promotions, social media, follow-ups, reward systems, and effective marketing to be successful, with realistic goals as a baseline. Money for your efforts is never guaranteed, while crowdfunding sites often take out a small fee, but for some, the strategy has been known to work extremely well.
7) Share Your Passion
Perhaps the simplest, but most effective way to secure startup funding, is to merely share your business’ passion. If you truly love what you do, seek to help others, and know you have what it takes to succeed, then don’t be afraid to show it to the world – but most importantly, to your potential investors.
Funders see a small business’ passion as actualized potential. Potential they can envision a return on. For some, the level of enthusiasm you have for your cause can be as important as your financial history – and just as influential.
So, get loud. Get happy. Be persistent in what you do, and remember that if one option doesn’t work out, you can always try another.
