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Last Updated on December 28, 2020 by Work In My Pajamas
As an entrepreneur, there’ll be a lot you’ll have to deal with in the world “outside the tide” but it’s all worth it. Although there’ll be plenty of frustration at the beginning of your going solo adventure, as the time passes, you’ll learn the tricks of the trade properly and become the master of your craft. Unfortunately – and we get how frustrating this is – having an idea but not having the money to put it out there is almost as having no idea at all. As the times are hard, rarely anyone has all their starting cash from the get-go; that’s why carefully planning your funding strategies is essential if you want to succeed.
So, if you are just starting out, consider these funding tips for a healthy, profitable jump into the entrepreneurship arena.
In This Post:
Find an honest, reliable investor
Approaching investors to fund your startup is one of the most common and somewhat most profitable ways to launch your business. However, with the statistics that aren’t as favorable for the entrepreneurs, a number of investors are gradually increasing their benchmarks because they want to be sure the money they invest is secured. As the statistics claim, “about 8 out of 10 entrepreneurs crash within the first 16-18 months of starting their venture, which makes up for 80% of all startups that fail, mainly due to cash paucity”. Not too promising, is it? What’s even more worrying is that “only about 30% of all small businesses can break even while another 30% end up losing money almost continually”. However, if you’ve got a good idea and a solid business plan, a real investor – one who’s got an eye for business and knowledge solid enough to understand your startup idea – will invest, for sure. Just make sure you find an honest, reliable investor who won’t string you along and will be as committed as you are.
Be prepared to fund yourself
Again, as stated in the introductory paragraph – it is no secret that not a lot of people have enough starting money to launch their business. However, funding yourself isn’t THAT impossible: if you’ve known for a while that you want to “break free” and go solo, you’ve probably started saving so you can invest in yourself.
Here are some ideas to save costs:
- Co-locate with other offices or don’t even have an office (until the business is up and running); remote working is pretty common and favored these days.
- Don’t buy new equipment just yet; use the existing one (computers, scanners, printers, etc.).
- Share office services with another office.
- Defer capital purchases.
- Try to strike a mutually beneficially deal with suppliers.
- Trade equity or services for any startup-related help.
- Replace traveling with teleconferencing to eliminate travel expenses.
- Approach interns who are willing to work for the experience, not the pay; naturally, you’d be paying them later.
Don’t rule out the option of partnering
A number of small business are starting out solo because they want their independence and the ability to be their own boss. Unfortunately, when the money is tight, you have to adjust and oversee some not-so-pleasing-elements, at least for the first year or so.
Partnering with a larger firm until you earn your own capital isn’t as bad as it may sound; although you will have to share the executive decisions with the top, you’ll be in charge of the majority of things within your firm while still sharing the offices, the funding, and all other beneficial resources this bigger company has at their disposal. Plus, partnering up with a firm that’s in the same field as yours gives you the opportunity to learn quickly and scoop some great ideas, tools and business methods you wouldn’t have available if you were going totally solo. Think about it.
Narrow down your loan options
For a startup, every penny counts – so, managing your financial and other resources wisely is the real stepping stone to success. Seeking a bank loan or credit-card line of credit with a trusted bank is okay; but, why wouldn’t you opt for start up business loans straight away instead of beating around the bush with the bank? With such options like Noble Loans that provide startup business loans for Centrelink benefit receivers, you’ll have your business financially oiled up in no time! Other than that, options like regular business loans at the bank or Small Business Administration (SBA) in the U.S. will have you covered.
Pitch your needs to friends and family
Not everyone likes to mix business and family but when you’ve got no other options left (OR have a wealthy family), there’s only so much you can do. If your family and friends are business-oriented people who trust your wit, talent, and commitment – pitch your idea to them. Treat them as regular investors: organize a presentation, show them your business plan and see where things go.
One of the most important aspects of every startup launch is adequate funding. When you find it – things are only just beginning then! However, before all the glitter, you’ll have to be prepared to work way too much for way too little capital in order to see things take off. But that’s okay – you’ll get there!
