Starting a business is challenging, especially if you need to find the capital to start that business. Fortunately, you can look to the following five smart ways to fund your new business, so that you can focus on making your company successful.
Loans and Investments From Family and Friends
If you have family or friends who have extra cash, then you may want to consider discussing opportunities to receive a loan to start your business. Make sure to have your business plan ready with a repayment schedule to give your family and friends the security in knowing you are serious and will repay the money.
If your family or friends are hesitant about providing a loan, you may want to offer investment opportunities for your new business instead. This option might be more enticing for someone to venture into instead of providing the loan.
Business Credit Cards
Business credit cards are a quick way to get the money to start your business. If you have a solid credit history, you shouldn’t find too many difficulties getting a credit line large enough to get your business going.
Business credit cards also have the advantage of low-interest rates and low payments, as long as you make your payments on time. Ensure that you have a solid business plan and can repay your debt. Otherwise, you run the risk of hurting your personal credit if the business doesn’t work out and you can’t repay the loans you owe.
The American dream primarily involves creating something from nothing, and bootstrapping epitomizes that idea. Bootstrapping means using internal funding and slowly growing your business without outside investment. If you’re willing to start small and go slow, then you can stay your own boss without having to please investors.
Bootstrapping requires creativity, which may include using high-risk ACH check processing to accept payments or other options for running your business. Bootstrapping is a rewarding, but often a time-consuming, way to grow a business.
If you want to raise some extra cash, consider using online sites such as Kickstarter to raise money for your business. If your business involves selling goods, you offer contributors the opportunity to prebuy your product in exchange for their money. If your company doesn’t sell anything tangible, you can offer other incentives for the contributions.
Although crowdfunding is a successful way for many people to raise money, marketing, creativity, and diligence on your part can encourage people to give to your business.
If you need much money for your business, a venture capitalist could be right for you. Venture capitalists are either businesses or people who look for small companies that will scale up, and they typically want to invest millions of dollars. If you’ve ever watched “Shark Tank,” you probably know how the process works. To solicit a venture capitalist, you generally need a solid idea and business plan, and you usually need to have your business up and running before a venture capitalist will consider investing in your company.
Although the money part is sometimes tricky, funds shouldn’t stop you from accomplishing your dream. The above resources alone or combined with other methods can help you head toward your goal.