How to fund your new business
Funding your new business can seem like an impossible task. You might have a good idea and recruited a good team, but without money to help kick start your company, you cannot do anything. However, do not fear! There are several ways to find the financial injection you need to fund your new business.
Bootstrap for a New Business
Bootstrap is a method of raising cash for your new company by dedicating a small percentage of each months wages towards funding the business. It’s a long, slow process, and means you cannot start acting on your big business idea until you have raised enough money. Having said this, the Bootstrap method ensures that you still maintain full control over your business, rather than having to share your business with others in order for some money.
Grants for a New Business
Grants are the most popular way of funding a business. They are big sums of cash that you do not need to pay back. Moreover, you do not need to share your business with whomever gives you the grant. All you have to do is present your business idea to whichever charity/company/government (etc.) is offering the grant, and hope that you will be successful. The competition for grants is of course fierce but don’t let this put you off because, for the benefits you gain from having one, the little effort needed to acquire a grant is worth it!
Investment in a New Business
Investment is a way of funding your new business by getting financial support and business advice by giving a share of your company to an investor in exchange for money. If you are looking to build up a significant amount of cash to propel your business to success, then investment is a great way to do so.
Loans for a New Business
You can get loans from several outlets but should always be cautious about taking money that you will later have to pay back, and about from whom you take it. Banks, in the current economic climate, are reluctant to give out loans. Therefore you may have to turn to friends, family members, or independent loan firms. Beware of each of these avenues because friendships can be strained through financial tension, families can fall out, and loan companies can charge extortionate interest rates.
Crowdfunding for a New Business
Crowdfunding is an increasingly popular way of raising money to start a new business. Crowdfunding is similar to raising money for a marathon. You tell all your friends, work colleagues, family, and professional contacts about your business idea, generally via a website, and people then donate money to help you reach a target figure. Websites include Kickstarter, Indiegogo, Crowdfunder, and Rockethub. Everyday more and more people are using these websites to fund their projects. Another thing to note about these websites is that, if you do not reach your target sum of financial backing then you will lose any donations you have already received; therefore you must take your crowdfunding effort seriously to make sure you reach the 100% donation goal.
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