When you have a brilliant new idea for a business, the limiting factor to success might just be finding the money to actually finance it.
Fortunately, there are plenty of ways to secure the seed funding you need to bring your idea to fruition. Some are traditional; others are fresh and new. Most importantly, there’s a solution for every situation.
In this article, we’ll take a look at five of the most suitable funding ideas.
Work with a traditional investor
When thinking about securing the finances to start a business, a traditional investor might be your first choice. If you struggle to drum up funds independently, or do not wish to carry the full burden of financial risk, this is a good option.
An agreement will be drawn up which details the responsibilities of each party, and you may need to sacrifice some autonomy. Ensure that you consider the level of control you want to retain before working with an investor.
In recent years, crowdfunding has become a popular way for small businesses to get up and running. Several small investors collectively provide the finances required by a new or growing company.
With this method, you will still have a responsibility to your investors, but they will not be involved in the day-to-day running in the business. Dividends may also not be monetary; you can offer gifts and exclusive offers to compensate their investment instead.
Take out a loan
Need full control of your business, but don’t have the finances to hand? A personal loan might be the right choice.
You’ll be accountable only to the lender; as long as you make payments on time and in full, you will be able to independently make decisions about your business. Loan Call helps you to connect with lenders to find the perfect fit for your circumstances.
Use personal savings
If you have the ability to start your business without a large capital investment, it’s prudent to consider using personal savings.
It must be noted that you will carry the full burden in case of business failure. If things don’t work out as planned, you need to be prepared to lose your investment in full. For that reason, we wouldn’t recommend using the entirety of your savings; instead, set aside an amount that doesn’t impinge upon your ability to cover your existing bills and responsibilities.
However, using independent finance means that you are not accountable to anyone else. You’ll retain full control and won’t have to make any repayments.
Invite friends and family to invest
If you’re confident in the potential success of your business idea, and know people who have the resources to get you up and running, it can be a good idea to involve your friends and family.
As with any other kind of investment, the terms will need to be agreed in advance. Note that personal and professional discussions must be kept separate from one another, and be prepared for any potential friction that can result. However, you’re also likely to receive the advice and encouragement you need to succeed.