One of the best ways to avoid unemployment is to start your own business. But… coming up with a new business idea that the community will receive well can be challenging. Even more challenging is getting the capital to get the business running. Of course, many successful businesses have been started on a shoestring. I once started a computer store using only my credit card. I would then build systems to order. As the business grew I was able to expand my inventory and begin stocking frequently used parts. One problem facing companies that raise a lot of capital before they start is that they waste too much money and grow too fast to properly implement good systems. But if you do need to raise capital to get started here are a few suggestions.
Crowdfunding Campaign
There are many success stories of people who have gained capital funds to start their business through crowdfunding campaigns. The amounts vary depending on the product, as it needs to attract like-minded individuals to buy into the cause. With crowdfunding, communication is vital to push the idea to people who usually would not raise funds. However, you might want to keep looking for buying and selling regulation CF shares as you do not want one party to own all shares and own the business.
Fundraise From Family and Friends
Fundraising through family and friends in the first stages of starting a business can help elevate the burden of where to source capital. Before approaching them, cut down the list to only a few who you deem reliable and can willingly support you in your goal of running a business. Clearly outline the risks they’ll be getting involved in when they invest in the business, also, a business plan is a must-have.
Get a Loan
If investing with family and friends is not an option, getting a loan from a bank is a viable option. In many financial institutions, small business loans are available for startups seeking capital and are often offered at lower interest rates. However, it’s good to note that many financing institutions will require the business to be up and running before giving the loan. A good credit score will also help in securing a loan. If both are lacking, bring collateral for approval.
Angel Investor
An angel investor is a person who has the money to invest in numerous business ventures. With the right pitch, they would be willing to pay for your start-up. First, start by having a solid business plan and a pitch ready. The data should have future growth of business and why they need to invest.
Venture Capitalists
A venture capitalist is a more mature brand or company that will also make decisions for the business after offering capital. They often work with cash flow-positive companies that show an upward trajectory. However, your pitch should show why the business idea is a worthwhile investment in less than 5 minutes to secure the capital.
When starting a business, remember that researching the competition, location, and old-fashioned hard work is vital to predicting profit. Remember that not all market gaps seen in a community can turn profitable.