One of the biggest issues you may have to face as a young entrepreneur is sourcing for finances for projects and business ideas. Start-ups require a steady capital boost to keep it running and growing. When this boost is unavailable, your business will experience tough challenges that require a strong passion to survive.
To get better funding, you need to be creative and try ways only fewer people will appreciate. That might require you to go out of your way to take risks, which is exactly why you are an entrepreneur. Here are 7 creative ways to get financing for your start-up and projects…
1. Bootstrapping
Bootstrapping should be your first project-funding idea. It involves raising funds from family or from personal savings. If you believe in your start-up, you should find it worth investing in. Raising money from family members is relatively easy as the interests are kept low, and agreements are always flexible. You just have to convince everyone concerned that your start-up is a good venture.
2. Crowdfunding
Crowdfunding has been made easier lately, thanks to the internet. It requires raising capital by calling for donations or investments from the general public. You only have to find the appropriate crowdfunding platform, sell the idea to the users, request donations or investments, and watch the funds slowly accumulate. Additionally, you also get free marketing and advertising which will be a huge boost for your start-up.
3. Peer-to-peer lending
Peer-to-peer lending is an age-long fundraising tradition. It involves sourcing for funds from rich friends. The current trend of peer-to-peer lending comes with a twist – you may have to offer positions in the company or heavy benefits. If your friends believe in you or your start-up, they should trust you with their money.
4. Getting an online business loan
Getting a loan is about the oldest trick in the book. However, this is not about getting a bank loan. Most online lending platforms already have a group of investors assembled who are looking for good business ventures to invest in. You have to identify the right online business lending platform and apply for a business loan. You will certainly receive the loan if your start-up and project are as good as you say they are.
5. Factoring
Factoring is a cool fundraising idea you can also try. This involves seeking individuals or service providers who can lend you money through invoice advance. This is useful in projects where you have to finish a job before the client pays you. You are expected to pay back when you receive a paycheck from the customer.
6. Product pre-sale
This is another innovative way of raising funds for your start-up. It involves calling for pre-orders of your products before they are released officially. Brands like Apple and Samsung make use of this method, giving customers the chance to make pre-purchases before the official release of the products. A successful pre-sale can raise funds to enable you to complete production.
You do not need to always wait on bank loans or be discouraged from growing your brand due to lack of funds. These innovative methods and others will help you raise enough funds for your business venture.
