If you’ve got a solid business plan, but don’t have sufficient funds to support your idea, it is wise that you don’t stop pursuing your dreams. You can still start your business from scratch in a number of ways. Here I’m going to discuss a few methods to gather funds for your startup:
Bootstrapping
You can bootstrap your business startup by using saved up funds. Primarily, bootstrapping is the practice of utilizing personal saved funds to financially support your business idea. This ‘self-funding’ process is a fast and convenient option to kick off your startup.
Bootstrapping is usually recommended when other external sources are not available to raise capital for your startup. When it comes to bootstrapping, you can easily access funds, there are no interest rates, and no bureaucratic obstacles exist in acquiring funds. Bootstrapping is an ideal option to raise funds for small-scale enterprises.
Crowdfunding
In today’s digital era, modern technology has made it convenient for new entrepreneurs to acquire funds by interacting with multiple small investors on social media platforms. Under crowdfunding strategy, an individual who is working on his startup attempts to pitch a business idea, potential growth, and goals to a community of investors via an online crowdfunding forum.
This allows the public to contribute funds if they like a business model. Crowdfunding has the potential to attract many new investors as the business progresses.
If you are new to crowdfunding and have a little to no idea as to how it works and how you can run a successful campaign on crowdfunding platforms like kickstarter or Indiegogo, you should know that some new automation tools, like JustEarlyBird, are real game changers and can seriously boost your crowdfunding campaign. JustEarlyBird is easy to use and partnered with kickstarter and Indiegogo and can seriously increase crowdfunding conversions.
Pitch Family, Friends, & Colleagues
You can pitch your business idea to your family, friends, and colleagues to collect initial funds for your startup. Logically, if you’re unable to convince your people to invest in your business idea, you cannot expect outsiders to jump in with their funds. After personal funding, this is the second-best primary source for early-stage startups to raise funds in less time and at low-interest rates.
Therefore, it is advised that you seek financial help from friends and family relatives who have adequate knowledge about the business field. Because they are in a better position to understand your business idea, vision, and pinpoint expected flaws. They can help you evaluate the strengths and weaknesses of a startup plan. You can reach out to your people living abroad to transfer money to India, China, Europe, or at whatever location you intend to set-up your business. Or they can transfer money to you to start the business too.
Angel Investors
Up next, you can apply to local angel investor groups to acquire funds for your startup. Understandably, many metropolitan places have potential groups of local high net-worth investors who are generally interested in supporting startups with a strong business plan.
They are willing to invest in qualified startups that can ensure high yields in the future. You can network with angel investors by using online forums and convince them to scrutinize your business proposal and make valuable investments.
Bank Loans
Lastly, on my list, you can raise funds for your business startup by contacting local banks, which is considered the safest and traditional option. If you’ve got a solid business plan, you can expect financial support from many banking institutions. But, you must approach banks with a business plan that is well-structured in terms of conveying modus operandi, estimated time of growth, and profit forecast of your business. Otherwise, you’ll be unable to convince banking institutions for funding and loans.
Venture Capitalists
You can consider approaching venture capitalists (VCs) to help you financially support your startup. Venture capitalist firms professionally manage funds to invest in startups with strong business ideas and enormous potential. The VC firms prefer to invest in startups at their early stage of development. If you have got a strong business vision that can be profitable in the long-run, then it is always a practical solution to pitch VCs.
Gaining the support of VCs can be advantageous for your startup in more than one way. The firms not only support financial help, but they can also offer expertise and mentorship to help survive your startup in a highly competitive industrial environment. Venture capital investments are well-suited for startups that are able to generate decent revenues in the short-run.
Business Incubators & Accelerators
If you are looking to get funds for your startup, and you are also in need of proper training and guidance, then you should consider getting help from business incubators & accelerators. These programs can be an excellent funding option to nurture your business and provide shelter tools. Incubators and accelerators are more or less the same things, both of them can help your startup succeed and earn high profits.
Business incubator and accelerator programs are typically run for 3 to 6 months that can help you build good connections with mentors, investors, and existing business owners. Hence, you should consider reaching out to popular business accelerators and incubators to achieve financial and non-financial support.