Funding Ideas for Your Business

Being an entrepreneur presents several advantages including following your passion(s), having a higher earning potential, improving the lives of others through your products and/or services as well as hiring people, becoming an expert in diverse areas, amongst others. For a business to run well it needs to be funded to grow and reach its full potential. Below are some ideas you can use to get funding for your business. The best part about business funding is that fund sources can be varied; you are not restricted to one source.

1.?Crowdfunding - If you have strong convictions about an idea, use the power of the internet to raise the funds you need. Crowdfunding sites like GoFundMe have become increasingly popular with inventors, entrepreneurs, and the public in recent years. They’re easy to set up, and if you can communicate your passion in your fundraiser description, you may be able to generate support from people all over the world.

2.?Angel investors - An angel investor provides a large cash infusion of their own money to an early-stage startup in exchange for convertible debt or ownership equity. Many of the biggest tech companies today, like Google and Yahoo, were funded by “angels.” Looking for a way to raise money for a business that already shows signs of growth? Angel investors are a favourable option.

3.?Bootstrapping - If you don’t want to give up any form of ownership or independence, bootstrapping is likely the best option to raise money for a business. It involves using your own resources. This may mean pulling from your savings. This is possibly the toughest of the funding options as funding is totally dependent on business owners’ personal finances and earnings as they conduct business.

4.?Venture capitalists - A venture capitalist is an individual or group that invests money in high-risk startups. Typically, the potential for the startup to grow rapidly offsets the potential risk for failure, thus incentivizing venture capitalists to invest. After a set period, the venture capitalist may fully buy the company or, in the event of an initial public offering (IPO), many shares.

5.?Microloans – A microloan is a small sum of money lent at low interest to a new business. Some microloan providers include banks, savings and credit corporations, non-profits that support small businesses, amongst others. Loans remain a core option for businesses because they usually come with fewer strings attached, shorter payment periods, and in some cases, medium to low-interest rates.

6.?Incubator Programs - Business incubators are programs created to provide new businesses access to the resources they require to grow. Incubators benefit businesses more than just financially. They also offer mentorship, network establishment, and relevant entrepreneurship training.

7.?Purchase order financing - Purchase order financing is perfect for businesses that have large product orders coming in regularly but not enough cash to cover the production of products until the payment from the customer comes through. How it works is that a purchase order financing company will pay your supplier the cost to produce the product. When the product is made and shipped to your customer, your business then invoices the customer and receives payment. That payment is then used to pay back the purchase order financing company. While it’s not the most affordable way for a business to borrow money, it is a viable option for those who aren’t able to qualify for cheaper financing to fulfil an order.

8.?Strategic Partners - Strategic partners come in many forms, from suppliers to distributors, and even customers. While it may not be direct funding, getting credit from your supply chain can help supplement your budget until your business is in a good place financially.

Every funding option comes with its pros and cons and some are more suitable to certain businesses than others. Don’t let a lack of funds stop you from starting and running the business you have in mind. Take the plunge today!?