There is nothing more exhilarating than starting your own business from scratch. The pride of knowing that you are making a living off of your own idea is nothing short of amazing. However, getting there is not always as straightforward as we hope, especially when it comes to the required startup costs.
For many, it could be as easy as taking out a loan, but for others, it is a bit more complicated. This may be a first-time project, or you may have some financial troubles in the past that prevent you from getting the loan you need. That doesn’t mean it isn’t possible to get funding. You may just need to get creative. Here are some methods we suggest.
Turn To The Crowd
If you have already tried and have been turned down by the banks and professional investors, then you might try pleading your case to the people via crowdfunding. Check out some of the more popular websites like Kickstarter and Indiegogo, where you are given your own personal webpage that you can use to show off your product and get people excited with video, pictures, and more.
Before you try crowdfunding, you need to take some time to prep and find out exactly how much money you will need. You want to look at your product, the money it will cost for manufacturing, how much you will charge for each unit and what your financial picture will look like once you start making sales. These figures will help you determine how much you need to bring in to make your startup a success. From there, you can ask for payments from potential customers in return for rewards up to and including sending them the finished product once all goals are met and the manufacturing is completed.
There are other ways to reach out to the crowd as well, including equity crowdfunding on sites like Ang elList, where you can have people invest in your company in order to get a share of the profits once it gets off the ground. You will want a tried and true product if you go this route because potential investors will conduct a business valuation of sorts to see if your company is worth their money.
You can also try peer-to-peer lending, where you can reach out to your community and search for inventors who will loan you money for a return on their investment later on.
It may seem like a risky move, but you can also fund your business using credit cards. If you go this route, you will need to do extensive research on different cards and find those that have an extended period of 0% APR financing, so you don’t have to worry about additional charges until you have the funds to pay it back. Many credit cards also offer exceptional cash-back rewards so you can make money while you spend money.
It is essential that you are careful when using credit cards for large purchases or to fund a business. If you choose this route, you need to create a budget so you can tell exactly how much you have to spend, what you will need to pay in expenses, and what you will need to put on the credit card. An online budget calculator is very helpful in this regard because you can add in every expense you have and get a breakdown for the month.
Debt is an important subject to speak about when thinking about starting a business. If you have substantial debt, you may want to hold off until you get into a better place. There are many methods and resources you can check out for debt relief, including negotiation programs and management plans. If you are struggling, you should consider reaching out to a professional before you take out additional credit cards.
If you really believe in your product, then you can take your show on the road and present your business plan at a startup competition. This is essentially a Shark Tank-like competition where you pitch your plan to potential big-time investors and try to convince them to fund your business. There are many of these around the nation, and you can pitch to them virtually over your computer as well.
Some of the best startup competitions in the country include Startup World Cup, Collision, and the Global Startup Competition. Many of these events are free to join, and in addition to gaining interest from professional investors, most offer a prize to the best pitch, which can be thousands of dollars. Check out the website for each competition to see the pertinent details, including when the entry window closes.
It can be daunting to try and start a business when your options are limited, but you must not give up. Small companies are the backbone of our nation, and your idea is worth the effort.