Have you ever had a really good business idea, but lacked the money to get it off the ground? That can be quite discouraging, especially if you’re a new entrepreneur or business owner. There are a lot of people, who like you, need money to help their business either get started, to maintain, or to grow it.
There are a number of ways to get some money coming in for that big idea, some more desirable than others. Here are 5 ways to raise the funding you need for your business:
Apply For A Loan
One of the most talked about ways to get money is by applying for a loan from a bank or professional lender.
A bank loan, is money given to you with the expectation it will be paid back plus interest. When you apply for a loan from a bank, you have to go through their specific processes with no guarantee of an approval and the amount you’re approved for can vary on a number of factors.
A lender is typically looking at the credit history, collateral available, cashflow history, projected income, character, and loan documentation of loan applicants. They are basically reading your finance resume. Your credit history tells a vendor what type of borrower you might be. The collateral you have available provides them insurance for providing you a loan. Your cashflow history and projections give them an idea of how business is doing now and what it is expected to be.
Start a Crowdfunding Campaign
You’ve seen the crazy GoFundMe campaigns, like the recent viral one of a black woman, who said she needed help getting out of Atlanta.
There are a number of platforms just like GoFundMe, that allow their members to request monetary donations and financial help for the oddest of reasons. Remember the Gorilla Glue woman, Tessica Brown, she was able to raise over $20k in her GoFundMe account. That said, you can just as easily, find a group of people willing to help you reach you business goals.
When deciding what platform to use as your crowdfunding source, you want to consider if the platform is user friendly, the resources they have available to help you spread awareness of your campaign, their customer support, and, most importantly, their cut. There are crowdfunding platforms for the purpose of education, nonprofit businesses, creative projects, real estate and so much more. You want to find the one that best fits your needs to maximize the potential benefit.
Ask Friends and Family Members
Another way to raise money for you business is by asking the people around you.
Nobody likes to owe anybody, especially black people, but think about it like this… Are you asking to help or hinder? The people around you, like it or not, are your support system. If the idea you have can ultimately help you and those around you long term, isn’t it worth the associated risks of borrowing from friends and family?
Look for opportunities like special gift giving holidays, such as your birthday or maybe Christmas, when people as what you want. Or even in times of personal celebration, when people are looking for ways to thank and/or commend you. These are the perfect opportunity windows to ask the people you know for money and/or tools that can take your business to the next level. There are a number of young Youtubers with large followings, who will tell you some of their starter recording equipment was gifted.
It can be just that simple, go for the things you need not the things that bring instant gratification, when you have an opportunity to get support.
Find an Investor(s)
Finding an investor is like asking a friend or family member, but it can be a stranger. Another difference between just asking someone you know and an investor, is they are, usually, in the business of professionally lending money to businesses.
There’s a such thing as an Angel Investor, these people provide business start up capital in exchange for equity in ownership or payback with interest.
Similar to the process of applying for a bank loan, investors need to know that you can pay them back. They may require a more lenient financial resume than a bank, but you’ll need to be sure you can sell them on the business idea with a strong business plan. A good business plan will outline the goals of the business, the methods that will be used to attain those goals, and a timeline in which the goals are expected to be achieved. Remember nothing in life is ever free, the investors also want to know what’s in it for them if they help fund your business.
Go Old School
You can always resort back to the grade school ways of fundraising, they never seem to go out of style. You could host a bake sell, sell cooked plates, host a carwash, and more.
I remember those school fundraiser where you could when prizes and stuff based on how much candy or goods you were able to sell from the catalogs. It’s the same concept, except you, most likely will be paying for the goods out of pocket up front and the commission will be made on the back end.
Who knows an Avon lady? I knew plenty, they’d usually have a catalog full of beauty items to choose from. You’d pay them for the products and they’d pay Avon when they place you order. That Avon representative then earns a commission based on that sale. In this arrangement they don’t have to pay for the goods, they just need to have good salesman skills and product knowledge.
If you have a business idea or if you are an already established business and you need more money, you’re certainly not alone. There are a number of traditional and untraditional ways you can go about to attain some business funding; loans, business credit, investors, fundraisers, and more.
The goal is to try a method or two and see what works for you and you business. Compare the different methods, look for reviews, ease of use, and the effort required.
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