It seems that starting a business is not an easy task. It is enough to choose a business model, register with a particular government agency, and open a current account. But it’s not. The mission of an entrepreneur is to develop and expand his business constantly. And for this, you need money, which at first is always not enough. Below you will find some tips on how to raise funds for your business project.
Develop business at our own expense
The most obvious way to grow a small business is to invest your savings. Some have been raising money to start their own business for several years. You can open a deposit and constantly put aside part of your salary, gifts, benefits, etc. Sooner or later, you will start working for yourself instead of “working for your uncle.”
Attract business partners
Think about whether you have friends, acquaintances, or like-minded people who also dream of their own business. It is easier to create a business by pooling – everyone will contribute part of their savings. In addition, a partner is not an investor but a person who will work on an equal basis with you. You do not have to regularly give money to an outsider who has not invested anything in the business except for startup funds.
Take out a loan
There are several options for raising borrowed funds.
Bank loan
Credit is the first option that comes to mind. It is enough to find a bank with the best conditions and conclude a loan agreement. In this case, the loan can be any: consumer or business loan.
Small Business Loan
A loan is an analog of a short-term loan, with some differences. Getting a loan is very simple since the lender is practically not interested in the financial condition of the business. But the borrower pays for such loyalty with a term that is much shorter than when lending at a bank, and with a percentage that, on the contrary, is much higher.
Looking for an investor
An investor is someone who can give you money, resources, or equipment to grow your business. Do not confuse him with a partner. The investor finances your project for a share in the industry while he is not involved in management. He will contact you only when sharing profits. However, the investor has a stake in the company or profits, so he will need to be kept up to date and consulted with him on important management decisions and development strategies.
- The investor can be a venture fund, an individual, or a government fund.
- A venture fund is a company that engages in risky investments in innovative enterprises and startups. The fund seeks to invest money in the business and recapture it through the rapid and explosive growth of a startup.
- State funds support only businesses that benefit the economy.
Private investors are business angels who invest in startups. Their goal is similar to venture funds – increasing the invested capital.
To convince a fund or an investor, you need a business plan and “burning eyes.” Then, if your idea interests them, you will receive money.
Crowdfunding
Funds for entrepreneurs for business development can be raised through crowdfunding – raising money from caring people on a unique platform on the Internet. For example, you want to start a solar-powered chocolate factory like an ECO business. You place information about your project on the Internet site and indicate the required amount. Then, anyone who is interested can donate any amount to you.