Recent studies have shown that a significantly high percentage of small businesses fail during their first year of operation. It was discovered that the most common reason for this is inadequate funding or the lack of it. Money is the fuel of any startup. Growth and expansion will be impossible without it.
It takes a considerable amount of time and effort to nurture an idea and establish it as a business. Funding issues come up at every stage of a business. Do not let your drive go to waste because of financial issues. You should learn about the best ways of getting that idea funded for the short term and long term.
The top 5 ways you can raise startup funding as a business owner are discussed in this article. They have been arranged in no particular order.
- Small Loans
The bank is usually the first choice for many entrepreneurs. However, it is a tedious process to obtain loans from them. You can try online loan providers as an alternative.
- Credit Cards
This is good for short term financing. You will have a higher chance of raising funds this way if your credit history is good. There are specialized credit cards issued by banks to small business owners.
This method of raising money for startups has gained significant popularity in recent years. There are online platforms that facilitate the raising of funds for projects like startups.
As an entrepreneur, all you have to do is to post a comprehensive description of your idea or business on these platforms. It is similar to posting a business plan. People will read it, and may decide to part with some money to finance the proposal.
You have to describe yourself as the brain behind the idea too. Tell your potential benefactors your story to get them more interested. This is a competitive method of raising funds, so you have to give it your best shot. Occulus Rift, PopSocket, and Allbirds were crowdfunded startups that became million dollar businesses.
- Venture Capitalist
This is a group that seeks to fund startups. They are investors that offer the needed money and resources to get an idea off the ground. If you want the help of such investors, you may have to give them partial control over your business.
- Angel Investors
These types of investors are similar to venture capitalists. The difference is that it can be just an individual or a very small group. Also, you may have to give up a larger portion of your business (in terms of control) compared to what venture capitalists may demand. They could demand 49 percent of the company.
To pique the interest of investors, you should try getting professional help for your pitch deck design from the right business planning experts. A pitch deck is used to present an overview of a business plan to investors.
Make the best decision for yourself from the above financing options. You can learn about the other options available out there if you have reservations about the ones discussed here.