5 Ways to Fund Your Startup
Starting a business can be expensive. There may be equipment to buy, marketing to undertake and possibly even employees to hire. Here are a few different ways to find the funding in order to cover these startup costs and get your business off the ground.
**Disclaimer Alert** I have written this post as a general guide to help my fellow business owners, however, I am not a qualified financial expert. Rachael Hope Media accepts no liability for any loss or damage howsoever arising out of the use of this website or reliance on the content of the website.
SORRY! Had to get the formalities out of the way.
Funding a business with savings can have lots of advantages. You don’t owe anything to anyone else, resulting in lower future costs compared to other forms of funding. Saving up money to start a business, however, can be a long and painstaking process. Some people are lucky enough to inherit savings – putting this money towards a business can be a good use of these savings. If you have to save up from scratch, consider how soon you’d really like to start your business and whether saving is likely to take too long.
Take out a Business Loan
A lot of budding entrepreneurs take out a business loan to fund their start-up dreams. A loan gives you quick access to funding, making it more convenient than saving. You do however need to pay this money back with interest. This can add to costs in the long run. You should shop around to find the best deal on a loan. Having a bad credit score will make it harder to find a loan with good interest rates and cheap instalments. There are fortunately many guides online that can teach you how to get out of bad credit debt. A loan broker could be worth hiring to help you find the best deal.
Use an Angel Investor
Another popular form of funding is to use an angel investor. These investors tend to be wealthy individuals who regularly invest in local companies and projects. They will give you the money you need in return for future shares in profits. Writing up a business plan and giving a pitch can help you to argue your cause. You can find angel investors online.
Crowdfunding involves seeking investment from lots of different people. It can be done voluntarily but is generally done in exchange for small shares. When having to raise a large amount of money, it can sometimes be easier to crowdfund it rather than asking a single investor. There are many sites dedicated to crowdfunding.
Start Small and Grow With Revenue
All businesses start small, but some businesses start exceptionally small. This can make it possible to start a business with virtually no money. For instance, if you have plans of starting a restaurant, why not think smaller at first? Some restaurants begin as food stalls, catering services and food trucks. As for starting a physical shop, why not begin as a market stall or as an online stall? Your revenue can be used to grow your business until you’re at your original start point. It means having to work from the very bottom, but it’s more affordable.
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