When you have a million-dollar business idea, getting it off the ground is more often the sticking point. It’s a great idea, but how do you finance it?
While there are numerous funding options (venture capital, loans, bootstrapping, and grants among others), no financial solution is one-size-fits-all. It all narrows down to how much startup capital you need and how you want to structure and run your business.
So, if you’re an entrepreneur looking for funding, you’re on the right page. We’ll discuss the funding options open to you to get started.
Let’s dive in.
It costs money to start a business…
You read that right—you need money to start your business. And here are the numerous funding options to kickstart it:
1. Personal financing
Self-funding is a common way to get a business off the ground and running. It involves using personal savings, credit lines, or mortgages on your home. If your savings are not enough but you have a good credit score, you can use credit lines to fund your startup.
On the other hand, earning your funds is also another way to reach your target. You can do that by having part-time work. It will enable you to invest back some of the funds you earn as well as work on your startup.
Consequently, if you are playing casino games like poker, blackjack, or slots, you can use part of your savings to play these games with low volatility and high payout percentages. Some sites give you tips on strategies and the best casinos online for Australian players. Read expert reviews on top online casinos and the main online games to play for real money. Any day can be your lucky day. And if you hit big wins, your startup idea is sorted.
2. Borrowing from friends and family
What are friends and family for if not supporting you in your hour of need? And sometimes borrowing from friends and family is the best financial option to fund your new business.
Why?
Because there are little or no interest rates and deadlines to beat. Some friends or family will even fund your business for no return other than the joy of seeing you become a millionaire.
However, when turning to friends and family for funding, always remember there’s a possibility of conflicts arising over how you structure and run the business.
3. Apply for a business loan
A business loan is a great option if you want to retain full control of your business, but it doesn’t come easy either. You need to prepare a business plan, understand your finances, decide on what type of business loan suits your needs, and know how to save costs amidst the rising cost of living.
Lenders will want to know why you need the loan and how you’re going to use it. And you’ll have to convince them with an organized business plan, expense sheet, good credit history, and financial projections.
Once you have your paperwork ready, you can get competitive business loans from banks, non-profit microlenders, and online lenders.
4. Pitch for venture capital
Unlike traditional financing solutions, venture capitalists can fund your startup in exchange for ownership shares and an active role in your business.
To get the attention of venture capitalists, you must write an enticing business plan with a summary of what you intend to sell, your target audience, competitors, how much you need, and how much profit you anticipate to make.
Be prepared to give a stake of your company’s equity if you’re for venture capital funding. But always research the venture capitalist before approaching them to increase your chances of receiving funding and understanding how much shares you’ll give in return.
5. Crowdfunding websites
Crowdfunding is another alternative way of funding your new business venture. But you’ll need to have a sexy idea and lucrative campaigns to attract the attention of potential crowdfunders.
To get started, post your business idea on a crowdfunding website, set the amount you need, and ask the crowd to finance your startup through loans and contributions.
The advantage of crowdfunding is that you retain full ownership of the business. But in appreciation, you reward the crowdfunders with a product or service you’re selling for their generous contribution. You can also give them special perks like mentioning their names in the credits or meeting the business owner.
The bottom line is if you choose to crowdfund, read every fine print to comprehend your financial and legal obligations—it varies with the crowdfunding website.
6. Government grants
How about free money for your startup? I know that sounds like a dream, right? But with government business grants, it doesn’t have to be a dream.
You can get government grants to fund your new business if it falls within specific industries like health, technology, or science. Other eligibility criteria include startups from a minority group or women venturing into a business that can steer self-fulfillment and economic growth.
Get your startup off the ground
We all want, at some point in life, to be our own bosses—don’t we? And we can actualize that dream if we access the right funding for our business ideas. So, if you have your business plan and expense sheet ready with a good credit history, you can get started with the financial funding options we’ve discussed in this article. Good luck, future billionaire!
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