Doesn’t it feel strange when you have a great idea to launch your business and you’re equipped with the requisite skills, the right amount of passion and a perfect roadmap, but you are forced to withdraw your plans because you do not have enough capital? It is indeed comprehensible, especially because there are many businesses out there that have ample finances, but they lack the other three said qualities.
What is even more complicated is that there are plenty of financial consultants who may provide a ‘one size, fit all’ advice. So what is exactly the solution to this? Well, the easiest way out of this quagmire is to seek a genuine piece of advice to take realistic yet pragmatic steps. Let’s look at a few simple measures to finance the business of your choice.
- Use Personal Savings
You can begin your journey by financing your venture from your pocket. We know that you have those extra bucks saved for a rainy day, but think about it this way: if you have a tangible plan and a line of action based on expert advice, you can have faith and invest your money. Once your business starts to flourish, you can cover for the payments and have surplus finances too. But remember, do not bet on all your savings at once.
- Find a Reliable Lender
However, if you must borrow, don’t do it unless you find a reliable and professional lender. For a financer to have these qualities, they should have a strong track record, a clean history, and authentic credentials. There also isn’t any harm to ask a trusted peer for advice on whom you should choose as your lender. But once you find that right person, do not delay your decision and launch your business forthwith. You may also look into working capital loans for small business before you make the crucial decision.
- Crowdfund Your Cause
If you have a genuine cause that you think would garner public support or it relates to the issues of the society, then crowdfunding is perhaps your best option. Use all channels of social networking to reach out to potential lenders. You can base your proposal on an agreement of repayment based on project success. This option is easier because of the collaboration and carries fewer risks even in the possibility of a decline.
- Get an Angel Investor
You can have an angel investor fund your business while you work on its key functionalities. But to find success in doing so, you will need to present them with a solid business plan and convince them of how you think you can face any unexpected situation. This is because an angel investor will only agree to provide the finances if they can be assured that they will be repaid.
- Borrow From a Bank
The most common method of financing a small business is by borrowing from a bank. However, bank loans may come with strict conditions and repayment framework. It may require you to have an excellent credit score and adequate assets to collateralize.
Financing your small business requires you to have a strategic plan in place for its growth. It is equally important to have a repayment plan ready before you invest the acquired finance in your venture. Whatever decision you make, remember to ‘dream big but start small’.