In our day and time, coming up with business ideas is really not a problem. All around us there are opportunities that make business ideas pop into our minds now and then. However, not many of us take these ideas forward.
The truth really is, coming up with some great idea is not what puts food on the table. An idea will amount to nothing except you package it into something people will be ready pay you for.
Now, you need funds that will help you transform that great idea into a salable product or service. And, this is where many have problems. But you don’t have to give up.
Here are a few tips on how to get that much needed finance for your new startup business.
How to Get Funds to Finance Your New Startup!
1. Draw Up a Plan and Keep Costs Low
Before you start looking for money to finance your startup, you need a solid business plan that outlines the money you’re going to need to get the business off the ground. You need to be realistic about how much money you’ll need but keep your forecasted costs as low as you can.
Remember, you can’t leave anything out when you’re creating your plan. If you do, nobody will take you or your business seriously when it comes to looking for financing. Factor in the cost of creating your products, hiring staff, web design, your premises, insurance and anything else that’s specific to your business.
Some banks are still a little reluctant to take risks and lend to startups. But if you have a good idea and you have a plan to back you up, there’s still a chance of you getting a loan. Credit unions and community banks could be easier to loans from if you’re starting a small business, explore all the options open to you.
Be careful to make sure you can manage the repayments on the loan though. Don’t take out a loan with high-interest rates. Short-term loans are not meant for starting businesses, so don’t be tempted by the offer of quick cash that they provide you with. It’ll only end badly for you.
If your idea is great, you might be able to attract investors. They’ll put money into the business for a share of it in return. There are some downsides to this as it means you have to sacrifice a proportion of your business to someone else, but that’s the tradeoff that you need to weigh up and consider.
So, how do you find an investor? There’s no easy answer to that question. There are some investors that are always on the lookout for new ideas, and you’ll be able to contact them through an agent. But sometimes, the best way to find an investor is to network and make contacts in the industry – it’s the best way to meet influential people.
Crowdfunding is the new kid on the block in terms of business financing. It’s something that has really exploded over the last 5 years because of new websites. These websites bring together people with business ideas and people who want to see that business succeed, and they can do that by putting their own money into it.
It’s a very democratic way of starting a business because it transfers power into the hands of ordinary people. It’s up to you what you offer people in turn for them putting money forward. You could offer them shares in the business or something simple like a t-shirt of other merchandise products.
Financing your business startup is the first of many hurdles you’ll have to clear as an entrepreneur, but don’t let the scale of the challenge hold you back. Put the above tips to use today and you’ll soon see your ideas fly into life!