One of the greatest benefits of modern market economies is the ability to launch your own startup company. Entrepreneurs with a good idea and determination have brought the world some indispensable products and services in the last few decades. The biggest challenge a startup often faces is not the development of a product or service, but securing the finances to get the business off the ground. Fortunately, there are a number of great ideas that can help solve this problem.
If you’re worried about seeking the help of a bank or credit union, you’re in luck. There are numerous options that allow you to skip these traditional lenders in favor of untraditional lending. From bad credit business loans to crowdfunding, there are a number of creative ways to fund your new business.
As noted in Entrepreneur Magazine, bootstrapping is the most common form of funding for small businesses today. Also referred to as self -funding, bootstrapping is the method used by more than 90% of startups today. It takes longer to get your business off the ground because you are saving the money yourself, but the payoff is greater in the end. Rather than giving up control of your business or relinquishing equity in the company, the new business you create is yours alone.
This tip is actually two tips in one. If you open a business credit card, you can get your business up and running quickly. Business credit cards are readily available today, and many of them come with 0% for an introductory term (often 18 months). This allows you to accumulate moderate debt on the cards without racking up interest on top of it.
Additionally, you can use a balance transfer between credit cards to help cover startup costs. Transferring your debt from one card to another prolongs the period of time that you have to pay off the debt, and in many cases you can transfer the debt without paying any transfer fees. This is particularly useful if you have business costs on a card with a high interest rate and want to transfer it to a card with 0% interest.
Business News Daily has the unique story of Priska Diaz and her presale campaign of Bare air-free baby bottles. Diaz began selling her products before launching her company as a way of raising money to officially organize her business. She was able to sell her products online, drive website traffic, and gain social media followers before she even launched her new business, Bittylab. The money helped her pay for inventory and financed the startup of her company. When she opened her doors for the first time, she had a pre-built customer base waiting to buy.
Friends and Family
The best loans in the world are the ones that come with no interest. Your friends and family may be willing to lend you money to finance your startup. This is particularly easy if they share your vision or believe in your determination. In any case, it always helps to approach this group with the same professionalism you would a lender at a bank. Don’t assume they’ll give you the money out of pity. Make them see the potential for your company with an impassioned sales pitch.
If you’re already an experienced entrepreneur with a successful business, you can use profits from that company to help fund a second business. Be careful not to tip too deeply into the pockets of your successful business. It does no good to empty one pocket just to fill up another. Make sure a portion of your profits remain with your original business.
This might be the most popular form of funding for a variety of projects in the 21st century. Sites like Kickstarter, GoFundMe, and more allow you to pitch your idea to the consumers of the world. People can pledge $10 or $1,000 if they believe in your product. It is also possible to use crowdfunding campaigns to presell products, raising capital to launch your startup in the process.
Last but not least, you can turn to angel investors. Individuals with vast fortunes often look to give back to their local communities by investing in startup companies. They earmark a certain amount of money to give away each year, and all you need to do to earn a slice of the pie is pitch your concept to them. The online platform Gust is just one example of sites that help connect angel investors with entrepreneurs.
Jason Taylor has managed his own small business for many years now. An avid writer, he likes to help new business owners by sharing what has worked for him. Look for his informative articles on a variety of blogs and websites today.