You have gone through getting your business plan and marketing strategy up, but here comes the most important part – getting startup capital. And I will be showing you four simple ways in this article.
1. Take out a loan
While I would not really advise you to take this step, especially when you still have a lot to learn in the beginning stages of your business, this is a great way to get startup capital. However, they can be really difficult to obtain in the essence of collateral. And you would need a very good credit history to be able to get a loan for your business.
2. Friends and Family
These should be your biggest fans. Once you have a great idea, reach out and explain your plan. Family and friends are way easier to persuade than banks, or even investors, or anonymous bank officials. A 2015 study showed that 68% of small businesses were financed by family and friends. They would be more trusting of you, than random strangers.
3. Reach out to investors
Now, don’t just randomly send your business plan and proposals to every investor that you have their contact. Most investors have a lot of those kinds of messages or proposals, with which some of them are scam deals. What makes you think that your proposal wouldn’t be viewed as one? Your proposal then would have to be absolutely transparent.
So, a better way is to reach an investor through a trusted relationship and proceed from there. No matter how high you are, you would absolutely have certain people around you that you listen to. Investors also aren’t exempted from the rule, reach out to those people you know that they listen to, and persuade them. You would find it less difficult reaching out to an investor that way.
An amazing way to get startup capital. This refers to a method by which you get a lot of people to donate to get your business started. But you have got to make sure that your idea is one that directly affects and benefits a lot of people, and solves a very pressing problem.
People will be more inclined to giving their money if they believe in your solution. So, make your pitch centred around that problem your business is there to solve and relate it to your target audience. There are websites that make it easy for you to kick-start a crowdfunding campaign. Kickstarter is a great one. Others include; RocketHub, SpeedUps, or even your social media accounts.
There are so many ways you could get capital for your business. It is not limited to the methods I just showed you. It’s also possible that you could get capital from more than one source. But whatever methods you want to employ, you want to weigh the pros and cons and also understand its effect on cash flow in your business.
It’s also important to note that most times, people don’t have any idea what you are talking about when you start to explain your business idea. But they may still believe in you based on one thing, the passion in the tone of your voice or expressions. That’s why you have to be really passionate about whatsoever idea you are running with. Enthusiasm can be really contagious, make sure that you have great love for your idea and watch people on the same wavelength connect with you and give you maximum support. Of course, you don’t get those people easily, but when you do, don’t let go.