Are you struggling to find the money you need to start and run a business?
The situation you’re in isn’t uncommon. 29 percent of entrepreneurs lack the funds to finance their business dreams and many more businesses that are already running fail because they run into money problems.
However, you shouldn’t abandon your entrepreneurial dream just because you don’t have the funds right now. There are a couple of options for funding your business. Whether you’re just starting out or you have been at it for a while, you have options to do it yourself or seek advice from Perth financial planners.
Continue reading to learn more about small business funding methods.
Loans
What’s the first thing that comes to mind when you’re in a financial emergency and don’t have any money? Borrow, right?
Perhaps you’ll call your parents or sibling or close friends. Maybe you’ll go to your bank and apply for a personal loan.
Loans don’t just come in handy in personal situations. They’re an ideal business funding option.
You could borrow money from friends and family if you’re in a position to, but the best bet is to approach a bank, credit union, or other formal lenders. Getting a business loan can be challenging if your business is still in the ideation stage, but with a proper business plan and good personal credit, you stand a chance.
Keep in mind that loans, like any form of debt, must be repaid. Be diligent in how you use loans to fund and run your business.
Grants
The federal and state governments as well as many non-governmental organizations in diverse industries offer small business grants.
A grant is essentially free capital. There’s no requirement to pay it back, which makes it an attractive way to fund a small business.
However, this makes grant programs ultra-competitive. There are thousands of entrepreneurs and businesses eyeing a piece of the grant, yet the number of successful applicants is usually limited.
To enhance your chances of securing a grant, start by finding organizations that offer grants to businesses in your niche. If you’re a science startup, for instance, zero in on organizations that only make scientific research grants.
Hiring an experienced grant writer to put your application together also goes a long way.
Crowdfunding
Crowdfunding is a popular way for entrepreneurs to raise funds for their startups. In North American, over $17 billion is raised annually via crowdfunding.
Platforms like Kickstarter and Indiegogo offer you the tools to start a crowdfunding campaign and sell your idea to millions of people around the world. Those who love your idea will chip in and by the end of the campaign, you’d have raised enough money to hit your goal.
Equity Capital
Let’s say you own 100 percent of your business, and you value it at $100,000. What if somebody gave you $25,000 in exchange for a 25 percent ownership stake in the business?
If you accept the offer, you’ll have taken in equity capital.
Equity investing has its benefits, but it’s not ideal for every business. Not every business is investable.
Funding Your Business Made Easy!
Funding your business is one of the biggest challenges you’ll face as an entrepreneur. It’s a challenge you can overcome, as long as you know how to go about raising funds. With this guide, you’re all set.
Explore our blog for more small business tips and insights.
