Ways to Get Funding For Your Business
A lot of people have ideas which they think would make for a great business which they can’t implement because they lack the starting capital. Unfortunately, many financiers and investors rarely put their money on an idea; they want a business that’s up and running and with a promising forecast for growth.
Most of the time you have to set up for some time before an investor comes in or you get acquired by another bigger company like in the case of Ntess Llc. Until then, you will have to find means to start and run your business.
Here are the many ways to get funding for your business.
Personal savings
Most of the businesses that are successful now were started by people who had so much belief in their ideas that they decided to pump all their lifetime savings to start their business.
Using your personal savings to finance your business is called bootstrapping and has its advantages. You won’t have loan repayments to eat into your cash flow as you work to steer the business to profitability. This works for starting and running the business but for any expansion plans you will need some external sources of funding.
Crowd funding
Crowding funding is currently one of the most popular ways to fund your business or any other cause if you can’t get a bank loan or don’t want to engage angel and venture investors.
Crowd funding works by tapping into the power of the masses and small investors who have little restrictions to make little contributions that amount to a large sum of money that you need to kick off your business or grow it to the next level.
To get people to rally behind your idea, be clear and descriptive on what you expect to do and achieve with the funds.
Family and friends
Do not underestimate the support you can get from your family and friends. Encourage your family and friends to invest in your idea but with the understanding that the business may or may not be successful and therefore a return on their money isn’t guaranteed. It’s more of a grant than a loan.
In case the business succeeds though, find ways to reward them for putting their faith and money in your business ideas. Furthermore, your family and friends can be the primary market for your business when you still don’t have the means to go big.
External investors
There are two main groups of investors you can get to fund your business: angel investors and venture capitalists.
Angel investors fund your business either through a one-time capital injection or a long-term arrangement that includes capacity building and financial support but do not get directly involved in the day-to—day running of the business. They are called angels because they are more patient on getting a return on their investments than banks.
Venture capitalists also invest in your business but get directly involved in the running to closely monitor their investment by demanding for board positions or a stake in your business.
Most of the businesses that are successful now were started by people who had so much belief in their ideas that they decided to pump all their lifetime savings to start their business.
Using your personal savings to finance your business is called bootstrapping and has its advantages. You won’t have loan repayments to eat into your cash flow as you work to steer the business to profitability. This works for starting and running the business but for any expansion plans you will need some external sources of funding.
Crowd funding
Crowding funding is currently one of the most popular ways to fund your business or any other cause if you can’t get a bank loan or don’t want to engage angel and venture investors.
Crowd funding works by tapping into the power of the masses and small investors who have little restrictions to make little contributions that amount to a large sum of money that you need to kick off your business or grow it to the next level.
To get people to rally behind your idea, be clear and descriptive on what you expect to do and achieve with the funds.
Family and friends
Do not underestimate the support you can get from your family and friends. Encourage your family and friends to invest in your idea but with the understanding that the business may or may not be successful and therefore a return on their money isn’t guaranteed. It’s more of a grant than a loan.
In case the business succeeds though, find ways to reward them for putting their faith and money in your business ideas. Furthermore, your family and friends can be the primary market for your business when you still don’t have the means to go big.
External investors
There are two main groups of investors you can get to fund your business: angel investors and venture capitalists.
Angel investors fund your business either through a one-time capital injection or a long-term arrangement that includes capacity building and financial support but do not get directly involved in the day-to—day running of the business. They are called angels because they are more patient on getting a return on their investments than banks.
Venture capitalists also invest in your business but get directly involved in the running to closely monitor their investment by demanding for board positions or a stake in your business.
