Starting a small business can be classified as one of the most difficult things in the world, not because of the odds stacked against the business, but because of the failure rate of most first-time entrepreneurs. When asked about this, most of the time, the reason is: “It is difficult to get startup capital”. This post lists some of the easiest ways for first time entrepreneurs to rid themselves of that problem and get startup capital for their businesses.
Enter in for a business plan competition
One of the easiest ways to get startup capital, especially for entrepreneurs in indigent countries are business plan competitions. Governments, Foreign Aid agencies, NGOs and even religious organizations are prepared to hand thousands of dollars to eligible entrepreneurs. All you have to do in most cases is write up a believable business plan and voila! the startup capital is yours.
Apply for a loan
With a good business plan and some presentation skills, you can easily access a small business loan from many credit facilities anywhere around you. The major requirements are an understanding of your business and a propensity to not only make good on your promise to repay the loan, but to also turn a profit. No bank or lender is a charity, and they are always looking to make good returns on money lent.
Crowdfunding or crowd sourcing is a very profitable way of getting finance for your business. It is especially beneficial when you are certain of the viability of your business idea and you do not have enough collateral to obtain a bank loan. By simply placing your proposal in the public domain (eg. on a website you broadcast), you can obtain funding from numerous individuals as donations or with options to pay back with interest or with shares of the company.
You can get advance funding from customers
If your product or service is one with a huge market demand, you can get advance payment for it froma customer even before you establish the business. By patronizing you at full price, the customer gets a product while you get some money with which to establish. It goes without saying that this option demands you provide the customer with the best quality.
Get a moneybag partner
Sometimes, the entrepreneur with the ideas and/or technical skill cannot build the business alone. You may need to consider getting a partner who would provide cash to run the business while you fly with your ideas. It is a win-win situation that will transform to millions of dollars if you keep it going.
Get an angel investor
Venture capitalists and angel investors have a lot of free money rattling around in their coin purses and are looking for viable ideas to invest in. Locating an angel investor (who could be the rich guy in your neighbourhood) can make all the difference. By offering the investor a stake in your business, and convincing him/her of the viability, you can essentially get enough money to run your business forever.