Having a big, multi-billion dollar idea for a new company or startup is good - but what now? You probably need a website, a technical team, a specific office space, and, of course, at least enough money each month to pay your taxes.
That is, you need money. Whether it’s a cool new system or a swanky café, most businesses and entrepreneurs need at least a little money to get off the ground in their early days. If you have a technology-based concept, you may have an easy time attracting the attention of commercial investors or angelic investors, but as many companies work at that level, finding an investor is much harder than before. So how do you get your business off the ground?
Here is a summary of some common sources of startup finance:
Start with Bootstrapping
When you start, most entrepreneurs use "bootstrapping," which means you fund your company by collecting together any of your personal earnings. This includes your savings account, credit cards, and any home equity lines you may have.
In many cases, using the money you have instead of borrowing or collecting is a good way - in fact, some entrepreneurs continue to squander until their business is profitable. This can be beneficial because it means that you will not have too many loans and monthly payments that discourage you, especially if you encounter obstacles along the way.
However, if you are looking to scale your business quickly, it can be helpful to bring in external sources of funding. So, what happens when your money runs out, or you decide you need something more? That in the end will depend on the type of business you are building, but there are some common areas to start with.
Save your day Job
This is a suggestion no one likes. If you currently have a job that meets your expenses and allows you to live a comfortable life, do not rush out of your job and pursue your business dreams. Spend some time clearing the business down and building on the early stages, difficult with the firmness of your 9-5 job paying off your debts.
This allows you to build your business with a few compromises, and it allows you to stay true to your vision without having to give in to financial pressure. You can also get a good experience in your day job to help you run your company on the road.
Think of friends and family
Asking for money from your friends and family may seem like a daunting task - but touching those closest to you is a good first step in getting outside support. And hey, it never hurts to ask. While Aunt Irene may not have the space to support your entire new network of dog owners, she may be impressed enough to throw a big couple to help you roll over (and join the site to find Fido and other playmates).
Before you can ask for money from your friends and family, you need to have a business plan in place. In this way, you can clearly explain to them what you are selling, what you plan to charge, how you will make money, and whether you are applying for a loan, investment, or gift (e.g. they should expect to return any money they put into your business, and if so, how much).
See Angels
Angels are usually wealthy people or retired corporate executives who invest directly in small companies of others. They are usually leaders in their field who not only offer their experience and network but also their technical and / or managerial knowledge. Angels usually pay for the first stages of a business with investments in the range of $ 25,000 to $ 100,000. Institutional commercial capitalists prefer larger investments, respectively of $ 1,000,000.
In exchange for putting their money at risk, they have the right to regulate the management practices of the company. In other words, this usually puts a seat on the board of directors and a guarantee of visibility.
Incubator or Accelerator
Business accelerators and incubators have grown nationwide, especially near colleges with a strong business plan. These vacancies are part of community service and training development institutions. Small businesses can get a good start here while working with some amazing people.
What's wrong with it? They usually focus on the most difficult businesses, so you may have difficulty finding what works for your company.
Mass fundraising
If you have a sexy and good sense of social media, a lot of money back can be the way to go. While websites like Kickstarter and Indiegogo were first and foremost, there were many successful businesses that made money through their reach. What's wrong with it? Most companies are aiming for a refund, so you have to generate a lot of buzz to make it with a general signal signal. It is also possible to overuse them and frustrate sponsors, which can lead to serious problems before your company goes downhill.
Making money can be the hardest part of getting your business done, but it can also be very rewarding. Once you've saved, got a loan, or found other people to invest in your business, you can go back - or start again - to your dream job! While it may be a long road to success, finding partners along the way (whether they are friends, angelic investors, or affiliate capitalists) to help keep your business going can make a difference in the world. Good luck to you!
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