If you find that you have a great business idea, funding is nearly the next thing you will be trying to figure out. Every business that has grown to become successful such as Rosedale Tow Truck has struggled in one way or the other trying to figure out how to raise capital. There are many ways to fund your startup from self-funding to venture capital. Organizing the funding needed to start your business is among the most significant hurdles that every aspiring business owner must pass.
The business startup journey becomes very more difficult as aspiring business owners have to face the reality of being turned down for business loans. The good news about startup funding is that there are plenty of funding options for startups to turn to. Let us explore these options;
Friends and Family
Borrowing money from friends and family can be a classic way to start your business. It can be quite hard to convince banks or investors to believe in your business, but that is not always the case when it comes to friends and family. Friends and family can be very much willing to help in funding your company. If you are getting money in the form of a loan from them, you need to ensure that they get sound legal advice to put everything in order. The only downside of this method of funding is that it can be straightforward to lose friends if something doesn’t go as planned.
Bootstrapping your Business
To succeed in your first business, you have to ensure that you get some saved up funds that you can easily access and put up in your business. With bootstrapping, you make use of your own funds to run your business. The money you use for bootstrapping may come from your personal savings, low-interest credit cards or your other lines of credit. The only major problem with bootstrapping is that if your business doesn’t succeed, you may be left with a substantially high amount of debt.
Small business loans
Some banks normally offer loans to small businesses. However, not that banks are historically very cautious offering loans to small companies, so it can be challenging to qualify. There are alternative lending or borrowing companies and institutions that you can equally use to get your business off the ground. The only downside of these lending institutions is that some can be very exploitative and predatory.
If you have an excellent business idea, and you are great with social media in getting people together, you can make use of crowdfunding. When crowdfunding, you can make use of sites such as Indiegogo and Kickstarter among other options. These sites can be an excellent source to help you pull funds together. The only downside with crowdfunding is that many companies are making use of this method, so you have to create much buzz on social media to stand out. Another technique you can use is an accelerator or an incubator. The good thing about incubators is the high level of mentorship involved.