Funding is the first hurdle that all new businesses have to overcome and your startup is no different. There are a lot of people out there with brilliant business ideas that never get off the ground because they lack funding.
Launching a startup is not easy and you need to be dedicated and determined. You also need to understand the reality of the situation where only half of US startups make it 5 years.
Of that figure, only 30% will last a decade. This is a clear sign that the chances of failing are much higher than those of succeeding. This should make you more determined and focused on getting the funding you need.
Have An Excellent Business Plan
Before anyone invests in your business, they want to see what they can gain from this action. Your business plan should have financial projections at its heart because this will act as bait for your potential investors. Business plans will also tell the investor about how your business will run, what you have to offer the market and your identity.
It is vital that the business plan includes a detailed analysis of your market where you highlight the gaps in your competitors’ operations that you will fill. There should also be an open organizational structure in the plan detailing roles and responsibilities for all business stakeholders.
Get Help From Friends And Family
Your friends and family can be a very reliable source of funding for your business. They will generally be open to investing in your dream and provide the funds you need as well as some advice. Funds from people you know will also usually come with little to no interest making cash flow easier for your business. However, there is a risk that your good relationship with these people can suffer when you use this funding method and cannot provide a return.
Use Crowdfunding
Crowdfunding has become a great funding route for startups as an interest in the business is offered for funds. There are a few crowdfunding websites that you can use which specialise in startups including:
- CircleUp
- Fundable
- AngleList
- CrowdFunder
Investors on these sites are looking for the next great business that they can invest in. Using a popular platform for this is important because it will get your business noticed by people who are actively looking to invest. If you are sceptical about this funding route, you should note that many big organizations started out crowdfunding. One of the best examples of this is Oculus Rift who started crowdfunding for $250,000 and raised $2.4 million.
Contact Angel Investors
All businesses need to go through several funding stages. Startups move from Series A funding to B and C when necessary. During the first round of funding, an angel investor can be vital. The investment offered is indebted, but there is more to this investment than the capital
Angel investors are more involved in the initial stages of a business and will provide guidance. After this, you will be on your own. Angel investors may operate on their own or they could be part of a committee.
Try The Local Bank Or An Online Lender
If you have a good relationship with your local bank, you could have a good chance of getting a loan. When you apply for the loan, you need to take your business plan and have a convincing presentation ready. You need to approach this loan with as much professionalism as possible. If you are rejected for the loan with your bank, you should not stop looking for funding.
There are many online lenders you can turn to instead. The US Business Funding and Lending Club Business Loans are two lenders you can try. Loans from these lenders could be what you need to get your business up and running. Alternatively, you can try Qik car title loans.
Fund It Yourself
If you have enough in a savings account, you could transfer this to your business. The benefit of this funding is that you are not reliant on others or providing interest in your company. However, this is a risky option as you could lose everything if the venture fails.
Partnering
Many successful companies have started as partnerships. Partners are able to provide ideas and solutions to the venture while sharing the liability. You will have to share the profits accordingly.
