Funding is a key part of the business. Only a few profitable business ideas can get started without funds or minimal funds. If you aren’t in the entrepreneur world, be sure your finances and funding are transparent and planned out first. Otherwise, you will fall into the many other businesses that fail in the first year due to poor cash flow or finances.
Here are five ways to get funding for your business ideas and avoid becoming a common statistic:
Use Your Own Funds
Keep a full-time or part-time job until you are fully ready to make the leap. The most common way people get funding for their business is to save as much of their current funds as possible. Once you have proper savings and can replace your bills through your business, it is safer to transition from a full or part-time position.
Ask Friends and Family for Donations
Friends and family will be happy to help if you don’t spam it. Allowing them to invest for a portion of the future profits can also show your appreciation, even if it’s a small percentage.
Preorders
If your business model uses products to grow your profits, then utilizing a preorder model can fund the creation of the product and show your customer’s interest. This is a common way to test if a specific product is viable or not. If the pre-orders are too low to produce the final product, you can return the funds and start a new idea.
Crowdfunding
Crowdfunding is another common way to find funds as an entrepreneur. Platforms such as GoFundMe and Kickstarter allow you to share your business idea and products to reach global investors. Crowdfunding offers one of the best ways to reach many different people around the world and avoid using bank loans. The idea is to provide additional rewards in exchange for an investment. If they reach their investment goals, the business will honor the rewards usually in a product. Users can also provide a donation without anything to support the business idea.
Small Business Bank Loans
Lastly, another way to get funding is by asking a bank. The small business microloan program offers up to fifty thousand dollars to help with start-up costs.
When you first get started, funding will be difficult to find. However, it will get easier as you take action towards your business plan. Furthermore, using other options such as a small business bank loan can also be a great way to get your business idea up and running faster.