If you have big career plans and need additional funding to nurture an idea for business growth, then you may be interested in how you raise such funds. However, it’s important to have a very strong business pitch and business plan, to begin with.
This will ensure you are able to strongly communicate your business’s prospects, and the more likely you will be able to attain money for business investment.
Fund it Yourself:
Though you have no idea, dipping into your personal savings is probably the easiest way to raise capital for a start-up business. Of course, this option does come with risks – it is your own money, and you could lose it depending on the viability of your business.
However, if you’re not willing to put at least some of your own money into your business plan, how can you expect others to? Putting your own money in speaks volumes in terms of confidence in your business and can help other avenues of investment too.
Loans:
There are various loans like a payday loan and short-term loans, and there are also business loans. Small business loans can be a major stepping stone for the success of many entrepreneurs.
However, it’s important to remember that approval is not guaranteed. You will need to meet specific requirements for loans. For example, having an excellent credit score and being in business for a certain period.
Crowdfunding:
Crowdfunding is one of the most recent, more common examples of raising money for business investment. It is the practice of funding a project or venture by raising money from many people.
Thanks to the internet, start-ups like Elevation Lab (makers of the iPhone dock) and Oculus (later acquired by Facebook) have become household names. Kickstarter, GoFundMe, and Indiegogo are 3 of the best-known crowdfunding sites.
Angel Investment
Angel investors are very wealthy and accredited individuals that can assist with funding a business idea alone, though some link up with other “angels” to fund business investment.
In order to get support from angel investment, you will need to have a solid business plan ready and all the key information at your fingertips to make a good pitch.
Friends and Family
It might seem uncomfortable or awkward to ask friends and family members, but many entrepreneurs have raised money for business investment through their loved ones.
Depending on how healthy your relationship is with friends and family, it might not be an option though one to consider, nonetheless. Indeed, mixing family dynamics and business may add more stress to the capital raising process than necessary.
Which is Right for Me?
Cost and convenience aren’t the only factors when seeking funding for your business. Consider how each solution will fit into your long-term goals and weigh up the risks of each one too.
Your main choice is whether to borrow or seek investment. Borrowing, such as loans, means you retain a full stake in the business, but repayments can be an ongoing burden that may slow your growth.
Conversely, investment delivers a cash injection that you don’t have to repay, so growth may proceed more quickly.
However, investors will share that growth with you. It is possible to get free advice from professionals, so you are able to narrow down the best options in your circumstances.