Deciding to start a new business, especially if it is your first, is an exciting but also very stressful time. Funding is key as during the set-up period you will have the biggest gap between income and outgoings, often with income being zero. So you will need a buffer of start-up cash, but where is best to source this from? Here are 5 possible methods of getting your hands on this much-needed start-up funds.
From Your Savings
This is the most obvious way to fund anything you do, if you truly believe in your venture then you should be prepared to put your money where your mouth is. How can you expect anyone else to believe in you if you don’t believe in yourself?
Family & Friends
Another route that is often taken by the new entrepreneur is to ask family and friends. There are various ways that you can structure an investment by someone you know. You can have them loan you the money, plain and simple, and this can be done on a casual basis or more formally drafted with or without interest being added. If you go down the more formal route then you might want to get a contract drafted by a lawyer to make sure everything is proper and correct.
The traditional business loan is one that has always been around and for good reason. It’s not exciting or sexy but if you have a good solid business plan then it’s always a good way to go. If you are going to a traditional bank then be prepared to have a proposal to submit and even an interview to justify your decisions and calculations. If you want to check out other sources it is really easy to find an Online Business lender that works for you.
Investment angels are an old idea that has been given a new lease of life in the publics’ eye in recent years. With TV programs such as Shark Tank in the USA and Dragons Den in the UK, the idea of pitching an exciting or innovative idea to angel investors is very now. But it doesn’t have to be a weird and wonderful idea to attract this kind of funding, all an investor wants to see is a serious business person with a well thought out plan that they can believe in. There are local, regional and national events where angels and entrepreneurs can be matched up and it’s worth a punt even just for the experience of making a pitch.
Now experts aren’t the only ones who have money to invest, and if you are looking for an investment with a more hands-off approach from the money providers then maybe crowdfunding is for you. The beauty of this model is that the investment comes from several individuals all pitching in to make up the required investment and it’s really up to them if they think the risk is worthwhile. You can simply pitch your idea online and see if you get the backers.