Want to get into business for yourself, but you’re having trouble finding a source of cash? You’re in the same position as many entrepreneurs. Great ideas are often thwarted because the founders practically run on an empty bank account. You cut back to only the necessities. Don’t get me wrong - it’s awesome to bootstrap your company. But there comes a point when you need cash. Here's 5 ways to find financing for business.
Find Financing for Business
Not all of us are made of money.Finding your first source of funding to pay for your domain name, hosting, and business cards shouldn’t be too hard. But it’s the stuff you don’t think of first that’s often overlooked. The computer equipment, mixing bowls, ingredients, liability insurance, high product quotas, etc. It all adds up. Plus, your first year in business is typically your most expensive because you’ve got to purchase everything to get your company up and running.
So where is this cash supposed to come from?That’s where you have to get creative. Take your efforts beyond a simple bank loan and explore these give options:
1. Friends & FamilyThis is a likely source of capital for many small businesses. But, you have to be careful. Don’t casually toss your idea around - have a plan. When you show family and friends where their money is going and how they’re going to get it back, they’ll be more likely to invest. Two more tips: create a contract to hold yourself to the agreement and give them interest so they’ve got even more of a reason to pull out their wallet.
2. Crowd-funding Sites Like KickStarterThis is the new kid on the block. And definitely the most forward-thinking. After your projects gets approved on Kickstarter, it’s time to drive traffic to the page and get supporters. While this works best for consumer-focused businesses, here’s another tip: You only get your money if you meet your fundraising goal.
3. Business Plan CompetitionsBusiness competitions are popping up all over the nation. While funding isn’t guaranteed, competitions are great for small companies because it forces you to think through how your company is going to operate, where your revenue is going to come from, your break-even-point, and your unique selling proposition. What do you win? Usually it’s a combination of cash and in-kind donations from other area business.
4. Sell Some StuffI sold old shirts and jeans to buy my first domain with hosting. Sounds crazy, but it isn’t too far off. Do you have anything you don’t use anymore? Could you sell it on Craigslist, Amazon, or eBay? Give it a shot and you just might get the couple hundred bucks you need to build a basic website. Plus, your house will be cleaner!
There you have it - 4 ways to find financing for business. There are plenty more for you to explore, too. How have you been able to find funding for your small business? Comments welcome below...