So you’ve thought about it long and hard and you’ve finally decided that you want to start your own small business. You’ve configured an entire business plan, mapped out your competition and location, you’ve even began designing your business space—but there’s one important step you’re forgetting—how will you fund it?!
Funding your first (or any for that matter) startup business can be extremely scary to talk about. How do you raise enough money to get your business off the ground? Finding an investor or sponsor can be a bit difficult, so what can you do to make sure you have the proper funding for your business?
Here are 6 ways to fund your startup business so you too can master the art of running a successful business!
6 Ways to Fund Your Startup Business
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Bootstrapping
Bootstrapping to raise funds for a business has become one of the most common things. Bootstrapping is the idea of using your own money to fund your business. Whether the money is coming from your personal savings, low or no interest credit cards, or other lines of credit—essentially, you’re only using your own money with little to no outside support or funding.
One of the biggest downsides to bootstrapping is the idea that if your business doesn’t succeed, you run the risk of losing a large amount of money or putting yourself into debt, however the plus side to this is the fact that you won’t owe anyone anything!
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Crowdfunding
Crowdfunding is a great route to go especially if you have a large and influential social media presence. Crowdfunding is “the practice of funding a project or venture by raising many small amounts of money from a large number of people via the Internet.” Pulling together funding from various crowds benefits your business because it allows you to generate funding without configuring debt.
When it comes to crowdfunding, you don’t want to become pesky and annoying to where your audience doesn’t want to contribute to your funding because you will leave yourself in an even worse position than you initially started, and no business can afford that!
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Sponsors/Investors
Sponsors and investors are widely used when it comes to business owners funding their startup. A sponsor is an individual or even an organization that will pay for certain things within your company. Sponsorships allow you the opportunity to not only receive outside funds, but to also build relationships with those that are sponsoring you. Similar to a sponsor, an investor is also a person or organization that buys into and puts funding into your business in order to help you grow and retain profit.
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Small Business Loans
Many banks offer small business loans for business owners, however you must do extensive research to see which small business loans may be appropriate for your business. It can be a bit difficult to qualify for these loans, however don’t let that discourage you from applying.
Although there are many downsides to loans, one of the biggest downsides is lending companies that may not be completely transparent with you. Make sure you are aware of who you are borrowing from before solidifying anything!
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Small Business Grants
Small Business Grants are also a great source of funding for startups. Many organizations offer grants to small business owners based on certain qualifications that must be met. When it comes to grants, most grants will not require you to pay them back, however there are some that require repayment, so make sure you take the time to read certain conditions before you sign that dotted line.
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Family + Friends
One of the more classic ways to fund any startup business is to borrow money from friends and family. While this option may not be available for some or may even be harder than the previous ones, it’s still worth the try. Your family may be more willing to help you fund your company simply because they support and believe in your dreams. The downside to borrowing money from friends and family is that you can potentially harm relationships. If you decide to go this route, be cautious and extremely careful and make sure you keep your word!
Finding the appropriate funding for your start-up business can be a journey, however utilizing one or more of these 6 ways to fund your startup options to your advantage will allow you to find the proper funding that works best for your business. Let us know in the comments below some of the options you’ve used to help you fund your startup!
