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Today, entrepreneurs face serious challenges in their quest to access funds to take their startups to the next level. As such, business owners need to be creative when looking for funds given the fact that they operate in harsh economic landscape with high competition.
While you can use personal savings to get your startup off the ground, you will need additional capital sometimes in the future. The main reason why some businesses seem to stagnate even when they have a great product with a good customer base is the lack of sufficient funds. Having cash is critical to scaling your business and take advantage of emerging opportunities. This article seeks to explore some creative ways that you can use to get funds for your business.
Consider crowdfunding
If you have some people who are interested in your business idea, crowdfunding may work for you. Crowdfunding can be loosely defined as a method of raising money for your initiative by requesting people to make some contributions towards your course. Over the last years, this method has raised billions of dollars for different businesses around the world.
There are several crowdfunding platforms that you can use and while they may vary, the basic principle is the same. Once you decide on the amount of money you need, go ahead and ask people to make contributions. As a token of appreciation, you can give the contributors a reward that is related to your business. One way of getting higher amounts is creating tiered rewards where the person who makes higher donations gets a better reward. To some people, the amounts may seem small but if you have a huge following you will end up with lots of cash.
Working capital loans
Business loans are not designed in the same way and others are more suitable for certain needs. Unlike most traditional loans from banks, working capital loans help you get the necessary funds to expand your business operations within a short time. In fact, you don’t have to go through a lengthy application process. As long as you’ve been in business for about 6 months, your application can be easily approved. In addition, you are not required to have spectacular credit profile and you won’t be asked for ridiculous collateral.
At times, business opportunities appear suddenly and the window can be very short so you need to act quite fast. This means that you don’t have several weeks to look for funds from complicated sources with long borrowing process. Under such circumstances, you can rely on working capital loans since an guaranteed approved personal loan application is funded within two days. This means you will be able to grab the opportunity and expand your business.
Angel investors
Some successful entrepreneurs have built their business using funds from angel investors. To achieve significant success using this method, you need to have the correct timing as well as gather the right contacts and network tirelessly. If you build trust with the people who have an interest in your business, you can open valuable channels for angel investors come to your business.
However, you must always remember that not everyone is fit to be your business partner. Angel investors will have some equity in your business and you bear the responsibility of always making decisions that serve the best interests of the business.
Do not be deceived. Getting the right angel investor can be a daunting task and you shouldn’t be carried away by the exciting conversations that come up in the early stages. To improve your chances for success, make sure you thoroughly understand your business plan, uphold transparency and always make claims that can be backed by hard data. Most importantly, let the relationship be built on trust.
Do it yourself
If you truly believe in your business, you should be quite comfortable investing your cash in the venture. Nevertheless, an increasing number of business owners are awakening to the importance of self-funding. Basically, spending your own money means you have the freedom to manage the startup in your own way since you don’t have to answer to anyone.
When you are running the business with minimum funds, you learn how to make the most out of every coin and you develop great money management skills. This option works well if your startup is dealing with products that are not capital intensive and when there is a steady cash flow in the business. However, some businesses will grow at a very slow rate since they need huge capital injections to see significant growth.
Improve your cash flow
If you can seek a way to increase your cash flow, you will eventually get the funds needed for an expansion. In your business, you can achieve this by offering additional products or services that complement what you are already offering the customers. However, ensure that any service or product you introduce is logical and designed to serve a need in the market.
You can also offer discounts to clients who pay upfront for services or goods to be supplied in the next twelve months. By doing this, you can get paid in lump sums which means you can have enough money to grow the business.
If you have been in business for some time and your client base is stable, you need to figure out how you can increase your sales volumes. To some people, selling at a reduced price may not sound like a good idea but if you can generate more sales in two weeks than you normally sell in three months, you stand a chance to make higher profits after several months. The idea here is to attract your customers with reduced prices for the same product and convincing them to grab the offer.
Final words
Achieved the projected business growth is an ecstatic feeling and it motivates you to work harder. However, finding the funds to fuel the growth can be quite challenging. If you think carefully, you can definitely come up with a suitable option to fund the business. Regardless of your preferences, ensure that you choose a path that suits your business needs and focus on generating profits.
Funds stock photo By ElenaR/Shutterstock
