Most entrepreneurs don’t readily have all the necessary capital to kick off a business. Startup costs include incorporation fees, permits, and licensing fees, down payments on office space, furniture and computers—even business cards and stationery. There is always need of more funding options.
You know you have the passion and know-how to make a good product or launch a great service, but where will you find the money to make your dream come true? The three tips below can help you find the right funding options to finance your startup with little fuss.
Crowdfunding
You may be able to get financial backing with the help of the public. Crowdfunding is changing the way businesses are started, and sites like Kickstarter enable you to use the Internet to gain a following. Kickstarter has helped launch 55,000 products with the help of 5.5 million people. You describe your business idea to the public and post a goal for the amount of money you require. Individuals who are interested in your product pledge funding, and once you reach your goal, those funds come directly to you. Kickstarter does collect 5 percent of a successfully funded project, but getting the backing you need is worth the investment.
Another example is Crowdfunder. This site brings together investors and entrepreneurs to create a democratic platform for innovation. The site focuses on providing a link between those with financial backing and those who are creating excellent products that deserve to be on the market. Crowdfunding offers more than just a one-time donation, as an investor might be willing to stick with you beyond the germination phase of your business. To date, the site has 5,000 company profiles listed along with 32,000 investors.
Related: 13 Failproof Ways to Raise Money Fast for Your Startup
Apply for Grants and Loans as Funding Options
The Small Business Administration has a wealth of funding programs available. For example, if you are a college student, the Student Start-Up Plan helps you gain momentum without being bogged down with loan repayments. You can choose an income-based repayment plan so while you are beginning to generate profit, it isn’t getting eaten by your loans. The government also offers research grants to small business that are engaged in scientific research and development under the Small Business Innovation Research program.
Related: 8 Reasons Why Your Small Business is Not Profitable as You Want and How to Fix It
Take Stock of Your Income
Be creative on the hunt for funding. Family or former business associates are sometimes willing to be investors. Just be careful if you borrow from family or friends; be upfront about what is expected and what ground rules to set. Another option might be to convert assets like the structured settlement or annuity payments into cash. You may be able to get the capital you need without having to commit to a loan, and you’ll have the protection of the courts.
Remember, exercise your creativity in full force when looking for financing. No matter who you are, if you can showcase how your business will benefit the public, you’ll find funding.
