Opening a business and becoming an entrepreneur is a dream come true for a lot of people. In fact, every year thousands of people open their own business. However, it’s not just a matter of opening your store and the customers will come. In fact, there’s a lot of groundwork that you should do before you launch.
To start, you can’t open a business without money. There’s no guarantee that their profits are going to be there, and when they do start rolling in, your bills might have already been due. You need cash up front for equipment, furniture, staffing rent, and anything else you might need to keep your business afloat through those early months. Getting money might seem intimidating, but there are options out there. Here are 5 easy ways to fund your first business.
Use Your Savings
Many people choose to simply fund their new business themselves using their savings. There’s a catch to this one: you have to have savings. There’s an upside and a downside to funding everything on your own. One of the possible downsides is that you are depleting your savings, and there’s no guarantee you are getting them back. Only use this option if you have a lot of money in your bank account, or you have another source of income to fall back on.
That said, there is a definite upside to using your savings. Sure, you take on all the risk, but you also get all the profit. You don’t have any loans to pay back, and you don’t have to share a percentage with any partners. So, while this can be a risky choice, it’s often a very attractive one for those reasons.
Maybe you don’t have the savings to cover your expenses for the first few months of your business. That’s okay, there are other options. For instance, you can always take a personal loan to cover them. A business loan requires you to run through hoops before you apply, but you can get legit fast cash loans online and be up and running in no time.
If you’re starting a side gig and you need a laptop and a home office, this would be a great choice. The money is in your account quickly, and you only need to make a few purchases with it. Yes, there is risk to taking a personal loan as opposed to a business loan. However, just like self-funding, you can enjoy the fact that you get all the profit. Plus, the faster you pay it back, the faster you pay down the interest. You can also get a line of credit, which you only make payments for what you use.
Family And Friends
Another option is to go out, hat in hand, and ask your friends and family to invest. This is unappealing to some people, but may be lucrative for you if you are able to do it. Just make sure the parameters of their investment is clear. For example, by investing do they get a cut of the profits for a certain period of time? Is it a loan? You need to get it in writing so that there are no misunderstandings. The last thing you want is to ruin your personal relationships because of your business.
Crowdfunding has become popular in recent years, and with good reason. You can raise a lot of capital fast to get your idea or business off the ground. For instance, if you have a great product but are unable to produce more than the prototype, you can get a large number of people to “donate” to your business. In return you can offer incentives like free offers. If you have a truly unique idea and get the word out well, you can raise a lot of money very quickly without having to do much more than set up the webpage.
An angel investor is someone who is looking for something to invest in. They keep companies afloat, then get a cut of the profits or have equity in the business. If you are a good sales person, this is a perfectly reasonable source of funding to pursue. You will need a detailed business plan to show that your business is viable, and you will have to back up your numbers. There are platforms you can visit that will help connect you angel investors from all over the world.
Funding for a business is not something a lot of budding entrepreneurs like to think about, but it’s absolutely necessary. You need the funds to set up your company properly, and help it through the initial phase when money isn’t necessarily rolling in. To get quick cash, explore the options above to get funding that will propel your business to the heights you’re dreaming of.