Regardless of what type of business you’re planning to start, the question of how you plan to fund your new business is the one that weighs most heavily. Perhaps you’re already covered in this area, you’ve got plenty of capital, a business account with the bank, and your registered business is sure to have great credit like you!
In 2019 though, the odds of having all the money you need to start a business just lying around is pretty much unheard of. You may need a bit of capital to get things moving. Although it can seem like an impossible task to find the money to fund your new business, it’s not really as difficult as it may seem.
In this post, we’re giving you some different ways that you can raise the capital for your business, and depending on what your needs are, you can choose the one that works best for you overall.
How To Fund Your
New Business
Crowdfunding
The popularity of crowdfunding has grown exponentially in recent years. Business owners and startups alike, need to raise funds to build their businesses and to create products/services offered within those businesses.
The way crowdfunding typically works is that you choose a crowdfunding platform such as Kickstarter, then create a profile that lists all of the pertinent information people will want to see about your business, product, and/or service.
You should then go into some detail about your marketing ideas and how you plan to monetize this project. You’ll also want to share any information regarding what you’ll be giving back to your crowdfunding investors. Some of the most popular choices are to offer a percentage of the profits, a flat fee, or even something unique that has to do with the business
Crowdfunding is a relatively low-risk option for business owners and is available to anyone! Yes, you read that correctly… it’s open to the public so that anyone can choose whether or not to back your business. Plus, there aren’t the same types of requirements that you might see with other more ‘traditional’ investors.
Acquiring a Business Loan
Arguably the most common way for business owners to acquire money to start their business is by taking out a loan. These loans are mostly in the form of a small business loan from a bank.
However, for some business owners, getting a bank loan may not be an option. If you’re finding it difficult to get a bank loan, perhaps due to poor credit history, then it could be time to look at alternatives such as independent loan companies.
One of the main considerations when using a loan company is the repayment terms and interest rates. This is because most loan terms and rates are usually pretty high. I would suggest looking online for a review of Blue Vine loans or other alternative loan companies and find the most suitable for your business.
Find Yourself an Investor
A typical small business or alternative investor is a person or company who is looking to invest some of their money into a project or business. In return, Investors get all of their money back plus way too much interest (if you ask me!).
Finding an investor to fund your business is a good choice to consider when you’re planning to scale your business over time. You’ll want to eventually build a team and perhaps rent office premises for your business.
There are different types of investor backing you can look for in your business, so it’s important that you take some time to get to know which ones would possibly be best for you and then start making a plan to reach out to a few different ones and see what you can make happen in that regard.
Dig Into Your Savings (If You Have Any)
Tapping into your savings would be the next logical action to take unless you’re trying to stay clear of incurring any new debt. Or maybe you’re like a growing percentage of Millenials who have absolutely nothing saved!
Here’s the deal, if don’t want the pressure of having to deal with an investor’s money and growing interest rates, you’re going to need access to someone’s savings. Asking family or friends can be quite intimidating but then again, they’re usually the people who want to help you any way that they can.
Of course, dipping into anyone’s savings is a risk in its own right because you’re putting money into something with no guarantees. At the end of the day, if you believe in your business, then it’s just like any other risk you’re going to take! And again, loved ones would be taking a risk too but most definitely think that you and your ideas are worth it!
Start a Side Hustle!
Another way to fund your new business is by finding a side hustle (or two, or three…). There’s already been a huge surge in legitimate, high-paying, and meaningful jobs out there!
Whether you’re thinking part-time, freelance, remote, and/or contract, 2019 is definitely the year to find yourself a side hustle while supplementing your income until your new business is fully launched!
You can start a blog and its own correlating ‘sister’ YouTube channel. Your blog could cover child-safe slime recipes, then you’d post videos showing how to make/play with slime (my daughters dream job at the moment!).
This could easily become a totally new job but don’t let it distract you from keeping your eye on the prize! While this side hustle may be a fun idea to help fund your new business, just remember that it’s really… just that.
Your ‘side hustle’ business is supposed to provide an additional income stream for you to invest in your business. But hey, there’s nothing wrong with it being an awesome job that you thoroughly enjoy!
Working full time and building a business will end up taking lots of your time and energy. But you already know this going into it, so that’s half the battle right? Plan ahead for these contingencies in your daily life and if you can, at least find time to rest!
Jessica Rose Adams
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