Although every business is unique and has its troubles and tribulations- they all have to start with one primary focus: money. How much money you start with can change the entire trajectory of your company. Unfortunately, we aren’t all born extraordinarily wealthy, and most of us have to work to prove our names. If you’re working on getting a business started, and aren’t sure where to get the cash for it, here are the top three ways to get funding for your company.
Crowdfunding
Crowdfunding campaigns are well known for helping get money into the hands that need it. From medical bills to new video games- you can find a Kickstarter or GoFundMe about it. This plan may also work for your company, as long as it’s something snappy or exciting that people will be proud to invest their money in. This type of funding works more for creative-based companies, like publishing, game design, or toy design. Although anyone can make a crowdfunding plea, these are usually the ones people fund the most readily.
When you set up your Kickstarter, it’s essential to get the word out there as quickly as possible. Please post it on your Twitter, Instagram, and Facebook, and let friends and family know about it. If they can’t donate, let them know how much it means to you that they share it and let other people know about your hopeful company.
The listing itself should be eye-catching, informative, and fun. Many people spend a few days to weeks putting together a great video and an excellent listing. Get people excited about your company! Let them know how much it means to you and where you’d like to see this business go. If you can offer rewards for specific amounts, like stickers or gear, go for it! People love to see prizes that will make it feel like their money was well spent.
A significant part of this option is that it allows you to be the sole owner and retain all of your authority over the company while still gaining capital from other people. Be clear about this in your listing as well, that their donations are just a one time support and not them buying into your company. When it’s finally funded, hold to everything you promised!
Traditional Loans
This plan is the most straightforward and traditional way to gain capital for your business. Whether you look at quick business loans or something more in-depth, you should closely consider every option. How much will you be able to afford to pay off if your business doesn’t succeed? How low can you get your interest rate?
You can do some things to prepare yourself for the best loan set up possible, but they may make you have to put off starting your business for a few months or even years. If your credit score is anywhere below 640, work on that first. Pay off any debt you currently have, get all of your credit cards in good standing, and work to rebuild your financial reputation. If you aren’t sure how to do this, get a clean reading of your credit report, and look at what accounts are open or are charging you currently. Student loans and medical bills are the top reasons for financial crises, so it’s better to handle them sooner rather than later.
When you’re looking to get a loan for your business, there are a couple of avenues you can go through. Talking to banks can often work, but they’re a lot pickier about what companies they support. Going through a loan company may be the best option for many because it’s a higher chance of getting the ‘yes’ that will start your dream.
Grants and Contests
Although these are two different avenues to get funding, they’re put together here because they both heavily rely on one thing: luck.
Getting a grant for your business is a lot like working on getting a scholarship for school. You have to make a clear and concise vision of your business, send out applications, and interview. There’s no promise you’ll get any grants, and if you get more than one, some have stipulations where you can only use one or the other. Contributions may be useful if you have an incredibly unique business model that will catch people’s eyes: otherwise, you should see them as a lottery.
Speaking of lotteries, contests can be just as difficult to win. These contests are usually smaller, run a lot like a short parody of Shark Tank without all of the cameras and fanfare. With these, it’s essential that you put your best foot forward, have an excellent pitch, and only make promises that you can hold your word on. If all goes well, you may have funding! It would help if you didn’t put your hopes too high on this, though, since it’s still up to chance.
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