Whether you like to admit it or not, money really does make the world go round (especially when it comes to startups). Without any, it can be along hard slog to get your dreams to become a reality. Are people going to pay for something before it has been created or built? No. Which is why you need money to get things up and running so that you have a product range or service to show potential customers.
For startups, there can be many hurdles to overcome, especially if you’re new to business. But one of the main things can be getting funding. So if you are nearly at the stage to launch your startup, then thinking about the different avenues to get it started will be your next step. One size doesn’t fit all when it comes to business. So think about what will suit your situation best. Work out all the costs and decide what will be best for you. Good luck!
Image: Kaboompics
Friends and Family
One of the first things to do is to look close to home. You may have been saving to fund some of it yourself. If that is the case, then it will just be the case of sorting some additional funds. Which is where friends and family might come in. If you have people that can donate and back you, then it can be a simple way to get your business of the ground. It can be easier to pay them back than it can be a bank, especially when things are tighter.
Private Lenders
If you are able to get the financial backing from a private lender, then it is like being backed by your favorite entrepreneur on Shark Tank. It will mean you can keep family and friends out of the picture (because as simple as it can be, it can also make things much tricker if things go sour). It also means that you don’t need to look for the backing of investment from any government schemes or even banks. Not all lenders are created equal, though. So just because one sounds good, it doesn’t mean that you have to go with them. Do your research, look into their careers history and where their strengths lie. If they want to be part of your business, it has to work for both of you, not just for them.
Bank Loan
A more traditional method of funding a startup is to go to your bank for a loan. There can be quite rigorous checks to make sure that they are happy with your business plan. But if they are, you can go from there. It is best to check what everything will add up to, to make sure that you can make the repayments each month. It can also be worth looking into specific startup loans that your bank might have. It may give you a better option than a traditional loan.
If you have a bad credit history, though, then it could be a good idea to look into getting no credit check loans instead. A traditional bank will check your credit rating as they want to know that you’re not just going to run off with their money and never pay it back. So if your rating isn’t the best and you’re nearly out of options, then this could work for you. There is more risk involved for the lender with this, though. So as a result, the interest rate may be higher than a traditional loan. So again, just check that it all adds up and figure out if you’d be able to make the monthly repayments.
Crowdfunding
Thanks to the internet, crowdfunding is a pretty new way to fund a startup. You might be surprised to learn just how many businesses are started by crowdfunding. It is a way to get money, but also to get your business’s name out there. It helps you to be part of a community and gets people involved. Even if they have only donated a small amount, it means that they could be the first to try a product or the first to see the new branding or design. By having a community of people interested in what you’re doing, it is a sure fire way to create a big buzz around your business or new launch. So if your target audience is millennials, the type to be on the internet looking at this kind of thing, then it could be the best way for you to go. It can mean things are slower, but you should be able to reach your target eventually.
Credit Cards
If you have a stellar business plan, and you have done all of the math, then credit cards can be a quick way to get some cash injected into the business. As long as you’ll be able to make some money to pay it off before you end up having to pay interest, then you’ll be doing well. Credit cards are never going to help you get thousands and thousands, though. So it may only work if you need a small cash injection to get things going.
Bootstrapping
If you choose to go down this option, then it basically means that you are paying for it all yourself. You are funding things as you go along. For any entrepreneur, this can be daunting. But if you’re confident in your business plan, then it means you can quickly reinvest anything that you have made to grow the business. While this isn’t going to be for everyone, it comes with no responsibility. It means that you aren’t accountable to anyone else. You don’t need to pay any money back; you just keep what you make and keep reinvesting it. So it really will depend on your business and what you want to get out of it.
However you choose to fund your business, just make sure that you have a watertight plan. When you have certain projections and the goals to achieve them, then it can mean much more success.