Explore this Article
Did you know that more than 94 percent of companies fail within the first year of their operations? Yes, it sounds shocking but true. They fail to sustain due to lack of funds. No money means zero business. The painstaking endeavors of brainstorming business ideas to recruiting employees and profit-making require considerable capital investment. The kind of funding you need for your company depends on the type of venture. You have many questions in your mind. How will I finance my business? Will financial institutions agree to provide loan for my startup? Will I succeed after the initial investment? If I require more capital, how will I manage to get it? The questions are endless. Fret not. We are here to answer all your questions. Therefore, if you feel the need for funding your business, here is a list of the top funding options for you:
It is one of the new methods to fund your startup. However, you will get the required capital investment provided your business has gained some popularity, of late. It means opting for a loan, pre-order, or investment from more than one individual simultaneously. Crowdfunding works this way. To get the required money, you will need to put up an elaborate description of your startup on a popular crowdfunding platform. You should talk about your business goals, strategy for revenue generation, how much capital you need, and for what reasons. If people like your idea, they will fund your business. The consumers offering you the capital will make pledges online and promise to pre-order your products, or donate for your company. Individuals can contribute funds to a business they believe in.
Crowdfunding creates interest and even helps you to market your products, besides financing. You may not get professional investors as common people fund your business. You may get venture capital investment in the long-term if your company has a winning marketing campaign to its credit. A crowdfunding platform is a very competitive place to receive business capital. Therefore, ensure you have a solid business to attract the attention of your consumers. That is why a good description and display of images are so significant. A few crowdfunding platforms include RocketHub, Kickstarter, GoFundMe, Onevest, and much more.
Generally, you get loans from banks and financial institutions. These organizations, especially banks provide two types of loans. The first one is the working capital loan and the second one is funding. When it comes to a working capital loan, you will need to run your company for a full cycle of income generation. The limit is determined by hypothecating debtors and stocks. As far as funding from banks or other financial institutions is concerned, you will have to share the business details and strategies. You will also require submitting a project report based on which your loan is approved. In countries such as the US, you can get business loans from platforms such as libertylending.com. You will get loans in minutes. The process is fast and convenient, unlike traditional financial institutions. You will get loans if you provide the lending organizations with real-life data, not merely a credit history.
Funds from Business Accelerators and Incubators
If you have just started your business, you can get funding from business accelerators and incubators. You will find them in all major cities, assisting many startups each year. This is a good opportunity for those business owners who have little or no capital to kick-start their venture. As far as incubators are concerned, they will nurture your startup offering training, network, and shelter tools. Accelerators work the same way except for the fact that they help your business to take a big leap. An incubator, on the contrary, will help your business to walk gradually. Both the programs run approximately for four to eight months. As a business, you must commit your time to business accelerators and incubators. You can make good connections with investors, mentors, and other startups through these platforms. In the US, companies such as Airbnb and Dropbox started with accelerators.
You can participate in contests to increase the opportunities for funding. Of late, a rise in the number of competitions has assisted many businesses to find capital for their venture. It is a smart idea because winning contests motivate business owners with innovative ideas to start their company. These contests are not like the ordinary ones that you often get to hear. When you participate in one of them, you will require creating a product or prepare a solid business strategy. If you win these contests, you will get media exposure that all business requires. Many startups are leveraging these competitions to start their venture and achieve their goals.
Make sure that you have time to think and research about your business plan. Do not rush into the process. That is because your project must stand out from the crowd to improve the possibilities of winning the competition. You have the liberty to present your business plan in person or pitch the same through a business plan. Make sure that your business strategy is all-inclusive so that people have a reason to invest in your startup.
As far as venture capitals are concerned, they’re professionally managed funds for investment in companies with great potential. They will provide funding to companies against equity and leave when there is an acquisition. Any venture capital program offers your business mentorship, expertise, and assesses your company from the scalability and sustainability perspective. Investment is possible for those small enterprises that have traveled beyond the startup stage and already generating income. Therefore, if your company has an exit plan in place, you can amass considerable funds that you can use to grow your network, invest, and expand your organization.
If you want your business to succeed and grow quickly, you will require external funding. Therefore, make sure that you have a strong business plan to convince lending agencies, banks, and individuals. Make the most of the existing market opportunities. You have many options open for your business. Decide on how much capital you need to start your venture.
I am Bhagwati Suthar, Founder of Jobiba & TezLife.com. I am a Blogger, Affiliate Marketer and a Digital Marketer from Udaipur, India. At JobibaBlog, We share articles about Blogging, Marketing & Advertising, Business and Tech Tips.