Whether it’s a new product, a full product line, or just a new business from scratch that you’re looking to build, there’s definitely going to be some money needed in order to fund your business venture unless it’s an online business that you’re able to bootstrap fully.
If you’re wondering how exactly you’re going to find the money to start your business or new project, then we’ve got some ideas for you below, and although they won’t all apply to you and certainly aren’t an extensive list of the options available to you, they should definitely provide you with some starting points to go from on the path to getting your business funded properly.
Applying for a loan
Usually when starting a business, most people will think of getting a loan as the first step before using their own money. The reason for this is, it’s relatively risk free because even if the business doesn’t take off like you expect it to, all you have to do is pay back the loan on time and you haven’t used your money only to never get it back.
When it comes to finding a loan, this can be a little more challenging, and although many banks and companies do offer small business loans for this very purpose, convincing them to give you one can be another challenge altogether and isn’t as easy as many people believe it to be.
In this case, you need to make sure you meet the criteria for a loan and that you have a good credit rating and the means to pay it back even if your business doesn’t take off. Then you’ll make an appointment to speak with them and present your documents to them so that they can use the information to make a decision.
If you’re accepted for a small business loan from your bank, then you’re good to go and just need to make sure you pay it back on time.
If you’re not accepted for a loan from your bank, then you do have other options such as Rapid Advance loans which are given from a private company.
Use your savings
If using your savings is an option for you and something you’d consider, then this can be a good choice for funding your business in a way that really comes with little risk.
Of course, there’s a risk in the sense that you could lose the money you invest if you don’t reach your business goals like you’re hoping, but the upside of this is that you won’t be in debt to anyone else, and don’t have to worry about paying back loans or explaining to investors why you’re not living up to their investment expectations.
Find an additional income stream
Bringing in more money is always a good thing when you’re looking to spend or invest in something specific, so whether it’s taking on a new job such as a part time one or even looking at how to create an additional income stream, such as by selling a product or service, then having an additional income stream can definitely be something that’s very helpful when starting your new business.
If none of the above options are something you’d look to consider, then crowdfunding could actually be a great choice for you. Crowdfunding is very similar to working with an investor in the sense that you’re using the capital of someone else in exchange for a percentage of your profit or a share in your company.
However, the people who are backing you are not always investors and are sometimes just members of the public who want to invest their own money in something that they think will work.
If you’re interested in crowdfunding and would like to learn more about it, then the best way to do this is by signing up to one of the platforms and then taking a read through their process of how things work.
Once you understand how it works, then you should sign up and start listing your product idea and seeing how much interest you get for it.
There’s also the traditional investor route if that’s something you find interesting and would like to explore. Although this is a more in-depth process than crowdfunding or taking a loan for your business, it’s also not the most crazy or in-depth process you’ll ever face, and one of the good things about working with an investor is that they really have an incentive for you to be a success because they want to see a return on their investment, so they’ll be looking to provide you with the tools and resources needed to help you with that and thanks to their business backgrounds, they’ll likely be one of the best people to have on your side.
Of course, not all of these options will apply to you and so it’s important that you take into account your own needs and circumstances before choosing which path to take, but at the end of the day, these are all valid, tried and tested ways to raise the money needed for your business and will be likely to see success as long as you’re willing to put the work in to build the business as well.
No matter which option you choose for getting the cash for your business, just make sure that your business idea is validated and you know that it’s going to pay off in the long run so that you’re not throwing away savings or getting yourself in debt with banks, loan companies or letting down investors.