Whether your business exists in one week or in 5 years, an infusion of money should always be welcome in your company. It can give you more spaces to explore and expand your business opportunities for further potential growth. But the question is “how can I raise funds to sustain my day-to-day business operation?”
The best way to raise a capital for your business depends on the stage of your business and how much cost will it take to get the money. Let me inform you that choosing a path to raise money for business opportunities can be very overwhelming and, that, you need to be very careful in choosing the best one for your business. In this article, we have listed 5 ways to raise capital for business start-ups. We believe that business owners for start-up entities dreadfully needs help with this matter. So, here’s one for you!
Yourself
There are lots of ways to raise capital and the very first option you can take is from yourself. You cannot expect someone to willingly invest in your business if they can’t see your savings invested in the business you are about to establish. It gives investors the impression that you are fully committed to your venture. Many successful entrepreneurs put most of their savings into their small business and only in rare instances they put nothing in it. Investing in your own business can also give you more drive to strive harder and fix your aim towards success.
Family and Friends
Some entrepreneurs opt to eliminate this option because it takes a lot of courage. But, believe me, this is actually the absolute best option you can ever have when you are planning to start a business of your own. Do not worry about sounding like you are begging or that you may put your loved ones in an awkward position. You just have to present your business plan professionally and treat them as your investors. Take off the “family hat” and walk and talk straight as a person full of potential seeking for investors and partners.
Do not worry if they will turn down your offer because this is how business work. We don’t get everything the way we want it. Just take pride in the presentation. You might be surprised in acknowledging the person who is interested in supporting your dreams!
Banks and Traditional Lenders
Small business loans from traditional lenders can provide you with surprisingly great terms and competitive interest rates. However, your ability to secure one is dependent on your credit profile and the collateral you can offer to them. It is great to have a creative and compelling business plan to make your presentation more realistic and convincing. It will give the bankers an idea of your commitment and dedication to make your business a successful one. At the same time, a successful business loan application can be the best way of getting capital for your business and establish your credit score at the same time. Securing this loan can also help other investors see that you are a real company and not a mere idea.
Crowdfunding
If you don’t qualify for a small business loan, for whatever reason it may be, you can also consider some of the established and legal crowdfunding options available. Crowdfunding collects the funds from the contributions of a large number of people. You can do your research and find the most reputable crowdfunding company with a great success rate and who can bring out an advantage to your business. You should also make sure that you carefully read their terms and rates and, as much as possible, take some legal advice from experts. This is to protect yourself and your business from the probability of committing a wrong decision that affects the overall value of your business entity.
Investment Companies and Angel Investors
Investment companies and angel investors – the cream of the crop but the most difficult to secure! These investment companies know exactly what they want and how they do it. They are very clear in their directions for pitching but some of them will come to you in any magical time as you least expect them if they see you as a probable perfect partner. Many entrepreneurs who have had successful partnership with this kind of lucrative investors believe that it’s all about PR and marketing. According to them, these investing companies know exactly what they want and all you need to do is to make yourself known to them. You need to put yourself on a pedestal which showcases your ability, drive and commitment. They need to see what you can offer and the moment they see that you perfectly match with their specifications, and then the partnership begins in any minute.
