Simple ways to raise startup capital for your small business
Starting a business on your own is a huge challenge. This is because most of us are usually afraid or uncertain of the outcome and/or in most cases do not even know where to start. One essential requirement to get yourself set up is one word: capital. Without capital, you won’t be able to sustain business operation. So how can you raise startup capital prior to startup to ensure you hit the ground running?
Bootstrap your business
This is where you use money that you had set aside to finance the business. The money can be acquired from your savings account, the use of either debit or credit card depending on your preference or actual cash that you have at your disposal. This option allows a person to commit capital they are comfortable with as a risk placed on the business. In this case, also you will remain debt free.
Apply for a financial loan
Loans are one of the quickest and easiest ways to get money to start a business. They usually depend on one’s eligibility to qualify for the loan, amount of money required, repayment period, security or collateral for the loan among other things. The best thing about loans is that if you tick all the required boxes and submit the relevant paperwork, you can access the cash within a short duration of time e.g. within a week.
This involves raising small amounts of money from a large pool of people, mostly the general public through a campaign. It is typically done over the internet. This is a current trend that most startup businesses employ to raise capital. Crowdfunding is usually very successful when done using a great campaign execution mechanism.
This is where you search for an angel investor to finance your business. An angel investor is an individual, usually very affluent, who provides capital to startup businesses. The angel investor in return will want convertible debt or ownership equity in the business. The best thing about getting an angel investor is that they usually provide much-needed support in the early business stages when no one else is willing to support you.
Raise capital from friends and family
This is basically seeking assistance from the close people in your life to help in financing the start of your business. It is important that you come out as a convincing person and also trustworthy. It helps to be convincing since you need people to buy into your business idea and also trustworthy since people are trusting you with their finances to invest in your business.
To start and run a business is a challenging task, but with the right attitude and execution, you can achieve your set goals. It’s up to you as the small business owner to carefully determine which method best suits your needs as you embark on your entrepreneurship journey. Give us a call today on 02 9810 3222 for more advice regarding financing your new business venture.