No matter what type of business you are planning on opening, there is one thing that every startup owner needs: money! While some businesses require more capital than others, you won’t be able to get your firm off the ground if you don’t have the money available to launch it. So, where can you find the money to start a business? Here are some suggestions…
- Ask family or a close friend – This can be a great route to go down, as you won’t be subject to interest rates, nor will you be charged if you are a day late on making a repayment. However, you also need to be very careful when going down this route. Make sure that you and your friend or family member are on the same page. It is important to put everything in writing, so that no bad blood arises. It does not matter how much you trust that person… get it in writing!
- Attract an angel investor – Attracting an angel investor is not easy business. Nonetheless, it is an option worth exploring for your startup. Of course, you do need to keep in mind the fact that an angel investor will own a piece of your company. You also have the fiduciary responsibility to act in the best interests of the angel investor and their shareholders. If you are to successfully attract this type of investment, you do need to get all of the details right. Have an immaculate business plan, which you know thoroughly. You also need to build a relationship that is based on trust, use real projections to back up your valuation, and be transparent too.
- Take out an unsecured loan – One option you have is to take out an unsecured business loan. There are many different options available, with terms ranging from three months to 60 months, and finance ranging from $5,000 to $300,000. You can find out if you qualify at Unsecured Capital. Most business owners take out a loan in order to give their company a head start. However, it is important to be extremely careful when you are choosing a loan. Don’t borrow more than you need, and make sure you can meet the repayment terms. You will only find yourself in bigger trouble if you cannot afford to make the repayments or if the loan schedule is not suitable for your situation.
- Do it yourself – The fourth and final option is to fund the business yourself. A lot of startup owners come to the realization that this is the only option for them in many cases. There are a number of different ways you can raise the funds, though, so don’t panic. You could leverage other personal assets, use zero interest credit cards, or dip into your savings account. If you feel uncomfortable about putting your own money into your business, you need to ask yourself why. Could it be because you don’t believe in the idea as much as you should? Also, if you put your own neck on the line, you should find it easier to attract potential investors.