How to fund your business
Money remains one of the most critical factors needed to start up or grow a business. Many business operators or entrepreneurs will agree that raising money for a startup doesn't come cheap. One of the many misconceptions regarding borrowing or even fund raising is the idea that you need to raise an enormous amount of upfront capital to succeed. Contrary to popular opinion, this is one of the greatest entrepreneurial hoaxes that simply don’t hold water. And there are lenders and funders in the market who are also happy to lend at smaller amount, and gradually grow the lending size when confidence builds with the business operator. Below are a few tips on how you can raise capital for your business:
Tap into personal savings: It makes a lot of sense to put your personal money into your bright business idea. After all, if your business idea is as mind blowing as you think it is, then why not put your money where your mouth is? You shouldn’t have problems committing your savings to a business you think would one day compete with the industry's big guns. Investors or lenders have more confidence and trust in businesses where owners show confidence with cash. If you are actually serious about owning your own business, then you should be prepared to start making both small and big sacrifices, and that may involve investing all your savings including retirement benefits. Although it's painful, it is worth it. That's why most lenders would require the business borrowers to have sufficient equity, that's called "skin in the game".
Find a partner who’s got the money: It’s one thing to have a brilliant business idea, put together the right team, have all the technical know-how and brain power to come up with a fantastic product or service but entirely another to have the financial acumen to establish that business. Many times, great business ideas are not enough to establish your business; you will need the financial backing of a partner who has the money to invest in your business. Although it may not be easy convincing a prospective partner to invest in your business idea, especially when you are starting out as an entrepreneur, the good news is, someone is definitely going to come along if your business idea is truly worth it. Remember it is not easy to own your own business; success comes with its many scars so get the right partners who would stake their money in your venture.
Apply for business loans and grants: If you are truly serious about starting your business then applying for government grants and other types of loans is a great place to start sourcing for your much-needed capital. With a well-designed business plan and well executed plan, your business might just be considered loan worthy. Again, don't forget to look inwards; within your state, regions as there are some lenders willing to offer loans to high growth businesses, but borrowing costs can be high.
Use your properties/assets: Using assets to raise funds has been one of the classical ways of raising capitals. Pledging your personal asset to obtain financing for your business does come with risks, and a lot can go wrong if your business doesn't live up to your projected cash flow and profitability. However, this may still be the fastest and most common way to access capital for your business purpose.
To find out more about financing for your business please email email@example.com or visit www.n1holdings.com.au