Getting funds is the initial hurdle you must overcome to start your startup. There are lots of brilliant minds out there with great business ideas that do not materialize owing to lack of funds. Launching and running a startup is no mean feat. It requires a lot of focus and determination. Statistics show that in the USA only half of the startups make it to their fifth anniversary.
Moreover, only 30% of these see a decade. As such, it is evident that the chances of failing are higher than the success rates. Here are several ways by which you can secure funds for your startup.
1. Have an elaborate business plan
Most lenders will always have eyes on the gain they will have by investing in your venture. The expected financial projections should be the highlight in your business plan as it is the bait that captures lenders and investors. The business plan always offers the guidelines on how your business runs, your identity, and what you offer in the market.
The business plan should also have a detailed analysis of your target market, highlighting the loopholes in your competitors’ operations that you wish to exploit. It should further have an open organizational structure dictating the roles and responsibilities of all stakeholders.
2. Ask for help from friends and family
It is general knowledge that friends and families make the second most reliable source of startup funding. Their love and goodwill are crucial to granting you the funds you need for you to begin your company. Getting funds from these entities is, in fact, advantageous as the funds come with very little or no interest at all. However, it is good to keep in mind that good relations are at stake if you choose this line of funding.
3. Try Crowdfunding
The internet also comes in handy in offering platforms for your business to secure funds. Here are samples of crowdfunding websites that you could turn to for funding:
Investors are readily available online trying to poach for great business ideas they can put their money in. The crowdfunding websites place you in investor platforms where your business idea can get noticed. Several big organizations have benefitted from crowdfunding. A good example is Oculus Rift that raised $2.4 million against their $250,000 target.
4. Angel investors
Every business needs to go through several stages of funding. Startups often have to move from Series A Funding to Series B and C whenever necessary. During the first round of funding, angel investors can be crucial. Even though their investment can be indebted, they provide a viable option to start the business. Angel investors are mostly involved in the initial stages of your business, after which you are on your own. Angel investors also operate independently as a sole entities without committees or advisors.
5. Engage your local bank or a reliable online lender
A good relationship with your local bank increases your chances of getting a loan. Ensure you bring along your detailed business plan and make a convincing presentation to the loan officer with professionalism in mind. If you don’t secure a bank loan, you don’t have to stop looking for funding.
You can also engage online lenders such as the U.S. Business Funding, Lending Club Business Loans. This could also be your ticket to a successful startup.
6. Take from saving account
If you have accumulated enough funds in your savings account, this is also a dependable way to fund your business. It comes with its benefits as you do not share profits with anyone and there are no debts to haunt you. Furthermore, you do not give away equity in your venture. However, it is a risky path if your investment fails.
Partnerships are a proven strategy for successful companies. Partners put in new ideas and solutions to your venture as well as share liabilities with you. You also share the profits accordingly. The only shortcoming of partnering is possible disagreements.
Before looking for more funds, it is crucial to evaluate your initial costs. Looking for extra funding might not be required if you maximize on the little you have. Starting a business venture is no mean task as it requires significant funding. As such, there is a need to secure the required financing from available sources. The above tips are great if you are looking for funds to start your venture.