So you’ve had your big idea, but you don’t have enough money to get it off the ground. Here’s some way to get your hands on the cash you need to finance your startup business:
1. Business grants
Entrepreneurship and small business are the backbone of any forward-thinking economy and governments are always looking for ways to help and reward people contributing to the economy. This aid often comes in the form of business grants given to small businesses to help them on their way when they’re short of funding. Grants will have certain specifications that you need to fall under to qualify. Who knows, it could be you!
2. Friends and family
Nobody is going to be more invested in the success or failure of your venture like your friends and family, so it makes sense to ask them to lend or invest the money for a portion of the upside. Your inner circle will have genuine intent when lending you their money and likely won’t charge you the same interest as banks or other lenders (if indeed any at all).
Crowdfunding website such as Kickstarter and Indiegogo are a great way to raise money for your venture and build some excitement and awareness around your product. Crowdfunding campaigns involves stating the amount of money you need and pitching your idea to the public via a crowdfunding website. You will need to give something back to the poeple that have donated money to your campaign which usually comes in the form of a free product when you launch (of course, the reward you offer will depend on the size of the donation you have received). Remember; you will only receive the money you have raised from the campaign if you meet your specified target.
4. Business loan
A business loan is usually a final resort as they will likely charge a healthy interest rate for the privilege. Although it is not always the most attractive option, at least with business loans you know you’re raising funds from a legitimate, regulated source and know expectations from the off. I would recommend using a government-backed scheme such as Startup Loans as not only will you find lower fixed interest rates with them, you’re also eligible for free business support and guidance.
5. Work a second job
It may seem unorthodox and even impractical, but if you want to get your business off the ground bad enough, you won’t think yourself better than working a weekend job for a few months to raise a bit of cash. There’ll be no extra interest to pay back and who knows, you may even meet some interesting people along the way.
6. Venture capital
It’s currently a hot trend to use ‘Angel Investors’ and we’re at the stage where taking on investment is an indicator of success, which when it comes down to it isn’t always the case. Taking on investment from a VC company or a sole investor will mean giving up a percentage of your business in exchange for a cash infusion. The good thing about working with investors is that they will usually have a good knowledge of the field they are investing in and so will help you along the way. They also normally have a rolodex of contacts that they can connect you with to help accelerate growth and business development opportunities.
7. Credit cards
Credit cards are an easy way to get your hands on money quickly. The downside is that they rely on you to be poor at paying so they can sweep the extra interest from underneath you. Always make sure you have a proper payment plan set up before taking out a credit card.
In the video below, our Founder and CEO talks about his experience funding EKM and how he got by when cash was sparse in the early days of EKM.