Thousands of people have a dream to start a small business, common factor about all this is that they both needed startup money. Raising funds has not been easy in fact, a recent study that has been done indicated that 94% of new businesses fail when starting operation due to lack of funding. Lack of funding is one of the common reasons for business failure. This article has a solution of how you can fund your business to avoid failure and buying social media marketing services at SubscriberZ.
Develop a business plan
You should have a business plan its essential for your business success at the begging. A business plan is a vital piece of information to explain how much money you need, where the money is going to invest, and how long it will take for the business to earn that money back.
Investors, financial institutes, or anyone interested in funding your business will be interested in looking at your business plan. You should make sure you have one before starting looking for a fund, and the most commercial bank requires it as part of the requirement during loan application.
1. Saving money
Some founders use their personal money to fund their businesses. This will make you as entrepreneur to work extra hard, making sure you archive success. Saving money is not easy for many people, but if you are in a position to reduce your expenses and save to start a business, then save rather than seek funds from other sources.
Starting a business with your own money has lots of advantages compared to when you start it with a loan or money you have borrowed from other sources. For instance, when you start with a loan, you will have a lot of pressure to make the sure thing go as planned even though sometimes it fails.
To save enough, make sure you decrease credit card debt, set up a budget, get rid of any services you don’t use like gym, set an automatic deduction to your saving account. These tips will enable you to save enough to set up a business.
2. Friends and Family Funding
Family and friends can help you to fund your business, with a business plan, you will have an idea of how much money you need. Borrowing money from family and friends has a greater risk because you can’t borrow what you won’t be able to pay back in case the business fails. Before seeking funds from friends and family, make sure you borrow an amount that you will be able to pay back in case of failure.
Friends and family are a good option for some people and favor some entrepreneurs, but most governments, such as the US government, discourage funding from friends and family. Some parents, siblings, relatives, and friends don’t understand the risk of investing in a business, especially during the first time. You should make sure they understand the risk before taking their money.
3. Raise Funds by Winning a Contest
Recently there has been an increased number of business contests, which has helped to maximize business funding opportunities. In this kind of competition, entrepreneurs who are competitors are either build a product or present their idea through a good business plan. It usually encourages upcoming entrepreneurs with business ideas to set up their own business when they lack the fund to start it.
Winning these competitions can also open another door for opportunities because of media coverage. Some companies might be interested in your ideas, or you can receive awards for your creativity, awards which come with a token of appreciation.
To increase the chances of success in the contest, your project should be more lively than just paperwork. At this stage, you can present your idea either in person or through a business plan. Your business plan should be more comprehensive and detailed enough for it to be easy to convince anyone the concept can work and is worthy of investing in it.
4. Get Funds From Business Incubators and Accelerators
When starting your business, it’s good to consider incubators and accelerator fund programs as your priority. These programs are available in almost all major cities, and they usually assist hundreds of new businesses to grow annually.
The terms incubators and accelerators are usually used together, but they have different business fundamentals. Incubator programs assist new businesses in the way parents raise children, they nurture the business at the same time providing training, shelter tools, and network which help businesses to grow. Accelerators help businesses on another level while incubators nurture businesses to walk, Accelerators help businesses to run and become self-dependent large firms.
Incubator and accelerators programs normally run for 4- 8 months, depending on the agreement. As the business owner, you should be committed because these programs usually require a lot of time. By the time the program is over, business owners benefit a lot from owning a business, and at the same time, you will be able to make good connections with investors and your mentor.
It can be hardest to find a fund that will enable you to raise your business from the ground, but also, when you get the required fund and start your dream business can be the most exciting and rewarding moment in your life. This article has several options of how you can fund your dream job. Setting a business is a very long road to success, it requires hardworking and determination to go through.