One of, if not the most challenging part of starting your own business is the funding aspect. You can do all the planning, all the market research, all the preparing, the networking, the marketing, outsourcing, relationship building and idea nurturing you could possibly hope to achieve. But if you haven’t go the funding you haven’t got a business, not one that can realistically hope to be successful in longevity terms. Sure, there are exceptions to the rule, but these are few and far between, so don’t count on becoming part of this club. Instead, consider all the different funding options available to you, there are more options available today than there ever have been before.
That’s where we come in. We are here to tell you about the different routes. It is no longer a matter of pulling together a business and plan and pleading with sceptical bank managers. No, we have gone well past that point. So sit back, slurp on your coffee and enjoy.
It is an options, but it will require a lot of saving and shouldering a lot of risk. Of course, you don’t have to have simply saved a lump sum because funding a business off your own back could mean you use credit cards or re-mortgage your home, thus using debt to free up cash. It could also mean that you sell off any assets you have that could be used as working capital.
2. Angel investors
There is no fixed definition of who angel investors are, but they are essentially high-net worth individuals willing to invest in startup companies and businesses. The hard part is getting in front of angel investors. As such, it is well worth you contacting your local chamber of commerce, pitching to them, handing over your business plan and seeing if they know any angel investors that may be looking to invest in your desired market or in your idea.
3. Small business lenders
Even though this is becoming a more and more popular option to those wishing to startup on their own, this route is still seen as alternative funding for small businesses. The major benefit about going down this route is the efficiency it offers. Most small business lenders will offer loans of between $5,000 and $500,000 and can handover the funds within a few days.
4. Peer-to-peer lending
In the past two years, this method of funding has caught traction because it cuts out the middleman, the banker. As such, it offers more favourable rates to both the investors and the beneficiaries. The way it works is simple; you do it all online, pitch your idea and wait for a multitude of investors to contribute funds. However, there are restrictions and limitations to be aware of, so it is best to do your research first.
These web-based solutions began to take off a few years ago. How do they operate? They offer individuals with a business, idea or product to get themselves in front of thousands of potential investors who are looking to put funds in for a variety of reasons. Additionally, you should be aware that there are a lot of these platforms, all of which specialise in different things and offer different forms of funding, so do your research first and then apply to the one most applicable.