Finding funding can often be one of the hardest parts of starting a business. While you may have loads of great ideas and a passionate team behind you, it will be impossible to get the ball rolling on things like marketing and production if you don’t have funds to keep you afloat. Thankfully, with many businesses struggling with this, there are loads of ways to get your business off the ground when you start with something like this. Let’s take a look at three of the best (and one of the worst) ways to fund a new business.
Startup studios are companies that are started with the aim of building new businesses. Resources and knowledge are pooled together, giving these studios the ability to fund new companies and provide them with the support they need to succeed. This is similar to a typical investment firm, though you will get a lot more support along the way and will have the chance to rely on the people that have funded you. This Startup Studio Insider article is a great place to start your hunt when you are learning about this sort of option.
Traditional investors will always be available to new businesses, though you will have to work hard to prove to these people that you are worthy of their funding. You will have to do a lot of research and provide solid projections about your financial future, while also convincing them that you are going to be successful. This can be very hard, but the results of a successful investment can be incredibly valuable to your business.
Investment firms can’t always see promise in products, even when they are very likely to be successful. There are loads of reasons for this, but you can ignore them and move onto crowd-sourced funding if you need to look elsewhere. Websites like Kickstarter have become very popular in recent years, giving companies an outlet that will make it possible for them to gain investments from their potential customers. This method can be a little risky, as you may not get any funding for your work, but it will be well worth it if you are able to secure some backers.
Personal Finances (don’t do it!)
Spending your own money or taking out personal loans to start your business is usually a mistake. It’s well worth keeping your personal finances well away from your company, ensuring that you don’t get dragged into funding the whole thing by yourself. If you do have to go down this route, it is essential that you keep a record of what you spend, making it possible to reimburse yourself once the venture is successful.
Funding a business doesn’t have to be as hard as you think, with many people being able to avoid throwing their own money into something like this when they take the right steps. Of course, though, funding is only worth chasing if you have a winning idea, making it a good idea to get some input before you go down this path.