7 realistic ways to fund your small business

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Today businesses are existing in a new economic landscape that forces out of the box thinking and creativity when it comes to financing. Small businesses have been traditional drivers of the economy for many years when it comes to capital and hiring. The truth is that businesses bring together their funds from distinct sources with time. Depending on your projections, business model, and how you can market to your potential financiers, you will get access to your funds. Whether you want to invest in business or you have a small business, and you need money to grow your business, you have to remain positive, be flexible, and stay vigilant through your efforts.

Invest in business

Crowdfunding

In the last decade, many crowdfunding sites have come up. Governments are also coming to terms with the fact that these firms have become too large to regulate. Most creative people and entrepreneurs create campaigns on crowdfunding websites to promote it to family and friends. Family and friends are the earliest contributors to your campaign. They will promote it to their friends, and there are high chances that it will go viral. You can also create a social media campaign calling for locals to help you in your venture. You need to provide info on how your idea will support the community and become an asset.

Recommended reading: Craft beer and crowdfunding have a long history

Savings

Some owners of small businesses sell-off personal property and liquidate personal assets to fund their businesses. People believe that physical things are just there and it is more important to make a dream come true. You can replace things later after finding the funds to purchase them.

Angel investors

This procedure is the best because you can raise funds easier with it. However, it has to do with leveraging and timing new contacts. The friends and family route has been opening major routes to angel investors. You can build a large amount of trust when you return money to an investor plus some interest. Just because an individual lends you money to start a business does not warrant him a long term partner of the business.

When you get funding from angels, you need to remember that they will act as fiduciary owners and it is in the best interest to act responsibly towards the growth of business. Attracting an angel is hard because no matter the goodness of the conversation, the devil is always available. You need to master your plan, back the valuation with real projections, and be transparent to build a relationship based on trust.

Finding a partner with money

At times, you might come across partners with money and would like to run the business with you. They will have an equal say in the events of the business depending on the deal structure, but they will also be financially responsible. The advantage here is that you are not just getting a funding partner but also a person to give expertise. You need to choose a partner wisely because if you are on different pages, you will have problems.

Customers

Customers are the best source of income if the business does not require a lot of capital. You can begin providing a service through a business card and take orders, then your customers can pay you on delivery, and you will accumulate your capital. Many businesses do not venture into angels or other sources of capital but use their early customers to generate capital.

Factoring

Factoring needs to be the last resort as it can cause a big debt amount. Those people that have limited funds can opt for this method. In this method, the business sells its assets at a discount to get immediate cash. This method is too dangerous and needs to be avoided.

Grants and loans from the government

Many governments in the world facilitate loans for small businesses. Governments know that these businesses create employment, and are important for the economy. It is unfortunate that many entrepreneurs do not have known about this information. You need to check with your local banks or the internet to find out if the government is guaranteeing small businesses in your industry. Apart from loans, you will also get grants from the government for your business. At times, this process can be lengthy, and it might be prudent to work with grant specialists to help you through the process of application.

Conclusion

You need to get creative when looking for money to invest in business. You can consider holding networking events in the community, get media exposure, or ask for material donations. Many people have unused items, equipment, furniture, and space they may wish to lend. Cash can never stop an entrepreneur with focus from achieving his dreams.  

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