You wanted to start a start-up company or small business. You have prepared the business plan. Then you are confident that you can execute your business plan. But are you struggling to find ways to finance your start-up? There are various ways to finance your start-up or small business.
Top 10 ways to finance your start-up or small business
Pull out your savings and money from bank accounts. You can use your credit card to fund your own business. The funds utilized under this method would be your funding, hence there would not be any additional burden of interest to be paid.
2) Funding from Family and Friends
This is another good way to get financing for your start-up. Your family or friends would lend money not from a business perspective but due to a relationship. It would be easy to keep those people separately from the business.
3) Funding from Bank Loans
This is a little difficult, but it is possible. If you can prove that your business plan is achievable, getting funding through bank loans would be easy. However, most banks would arrange business loans against tangible assets. You can also get business loans against inventory.
4) Government Grants
The government encourages small entrepreneurs by giving grants to specific businesses. You should check whether your business is eligible for such Govt. a grant. These grants generally come as a subsidy or sometimes it comes with a small interest rate.
5) Business Partners
You can invite people to join your company as business partners. They can be sleeping partners who would just fund and would not participate in your day-to-day business operations. For active partners, while you would get funding, you would also get a helping hand who can be part of achieving your goals.
6) Crowd Funding
Generally where people have good networks form part of groups and do crowdfunding. They pool their small savings and lend to people who are in need or to businessmen to get returns. This would be a good way to get funding for a start-up.
An incubator is a company or organization that shares resources, space, cash, and consulting in exchange for an equity share in the companies as such start-up companies are most vulnerable.
8) Angel Investors
Some individuals are high net worth and can fund your start-up or small business. Good networking is critical. You should choose angel investors who understand your industry and your passion for the start-up.
This method of funding is not that famous. You can exchange goods or services in exchange for cash at a discount price. This method would be good if you have a unique product or service where you can upfront give it to people and get some money for funding your business.
10) Venture Capital
This should be your last resort to fund your start-up or small business. Generally, Venture Capitalists would not like to fund Startups as they are like just born babies and it would not indicate future performance. Unless you require a high amount of funding and have a unique business idea where you can convince venture capitalists, it would be difficult to get funding from venture capital.