Need Funding for Your New Business? There are Options Other Than Banks
You have a business model in mind and a project plan ready on papers, and now the most important thing you need is funds. Most of the upcoming entrepreneurs look towards banks for acquiring the necessary funds to start their businesses. But do they all receive the ‘helping hand’ from the banks? No. Banks avoid lending finance to small time businesses and entrepreneurs. Sad, but that is the fact. However, you do not need to be disappointed. There are other ways to raise funds for your business. Check the options suggested by our business experts.
What are friends for?
Family and friends – no one know us better than them. Most of the times they are aware of our talents and skills, and we often seek them for motivation and guidance. So there’s no harm in letting them in on your business ideas. Explain your business model to them, tell them your marketing strategies and give them an idea of the expected revenue in the initial phase of the business.
With friends and family, you don’t need to be too nervous or too conscious. But while discussing business plans, keep a professional approach. Let them know how dedicated and committed you are towards your project. You would be surprised how much of a help your own people can be for you; even when it comes to finance. Also, once the business starts performing well, make sure that while returning the borrowed money you provide some sort of rewards to them; a gesture for the faith they have shown and the risks they have taken for you and your business.
Fundraising and Crowdfunding websites
These days, thanks to the technology and brave small investors, there is another option of raising funds for your small-time business. There are websites through which you can avail loans from people who are interested in a variety of projects and are ready with funds to invest. A lot of new entrepreneurs have tapped into these resources and have successfully acquired investments based on the strength of their project plans. You might be a bit hesitant to opt for this resource of crowdfunding but there is no harm in doing a minor research or making inquiries. You can check related websites for understanding the crowdfunding structure.
Ever heard of Angel Investors?
There are groups and individuals who pool their money and provide a decent capital amount to potential entrepreneurs for starting new businesses. They are often termed as ‘Angel’ investors. These angel investors are mostly members of a community group whose interest is to invest in business ideas led by people with a strong commitment and planning. They are aware that not every new company can afford to raise capital on their own and most of the times no matter how lucrative a proposed business project is, banks often let down small-time entrepreneurs. So, approach these angel investors (you can find them through the web) and explain your project. These angel investors can be a great resource for raising funds.
The last option… personal savings
A lot of wise and experienced finance experts often advise against touching personal savings for anything other than personal or family purposes. And they make sense too. But in case where you have good confidence in your business model and you have sufficient amount in terms of savings, you can think of diverting a decent portion of your savings for starting your own business. Think well and plan better.
So start working on these options and raise the fund you need to kick-start your dream business which might be small-time as per market terms but definitely has the strength to keep expanding itself.