As a small business owner, money is always a concern.
Whether you are not yet trading but searching for startup capital, in the middle of your first year, fighting to survive, or an experienced company with a locally recognized brand, finances remain a priority concern.
Even a microbusiness or home-based small business will cost anywhere from $5,000 to establish.
While money is a key factor for any business. We have all heard that near-mythical phrase “90% of businesses fail in the first year”, but that doesn’t have to be.
There are ways to get the necessary capital to start your business in a healthy way.
Do you want to know what they are? Then keep reading, because we have compiled the definitive collection of sources of funds for business owners in 2019.
1. Bank Loans
A classic choice for those looking to start a business, bank loans can provide you with the funds you need. Just make sure you look around and find the right loan for you. Sites such as moneybanker.dk are a great resource for both finding and comparing loan options.
A funding loan is the most obvious choice when considering funding options, but it is also far from being the only one you can look towards.
If you are an existing business, then you can always look to your current and even prospective client base for some help. Now, this doesn’t mean taking a loan from your number one client, but rather look at fundraising or donations. Make your vision public and offer rewards for anybody willing to help.
In a similar frame of thought, crowdfunding is a valid way to raise capital in the modern world. Interested parties can back your ideas, business venture or campaigns and in exchange for tiered rewards, either along the way or at completion you can fund your business and focus on delivering on your promises.
4. Venture Capitalists
If you think that your business has the potential to do something impressive, and have the research that can back up your claims, then looking at venture capitalists for your funding is a viable option.
Maybe less likely for a smaller business, and not ideal for those looking to establish their business still, venture capitalists still provide a solid source of business finance for those that meet the criteria.
For those looking at sources of funds for business machinery looking into leasing your fixed assets is a smart way of reducing your initial costs, allowing you to redirect funds into other areas.
While not necessarily increasing the amount you have, leases allow you a little more freedom to move your available capital around where needed.
6. Angel Investors
If you have a solid idea but are not yet at the stage of having the proof needed to secure venture capitalist investment, then looking for Angel investors is a great way to go about business funding.
Find someone who believes in your idea and is willing to back you before the gates open.
7. Friends and Family
We’ve all been there, having to ask a family member to help us out with a bit of cash. When thinking about how to get funding for business the same principle can apply.
Don’t be afraid to ask friends or family to get invested in your project. They are likely to be more understanding than traditional investors, lowering the pressure for immediate returns a little.
Going into business is always a risk. You never have a guarantee. Sometimes, bringing in a partner is a great way to not only share the risk but also the costs.
Better than a funding loan, forming a partnership also gives you someone else to have your back and support you, and you support them in return, through the stressful early days.
9. Personal Savings
One of the most surefire types of funding for a business is through your own personal savings. Put aside money and as it builds you can already make plans on how to invest it.
Which avenue of the startup process needs investment first?
What marketing opportunities are there for you to explore?
By investing your own funds you are not reducing the risk, but you are reducing the number of creditors you will be liable to, and that is, by its own merit, a good thing.
10. Local Government Schemes & Initiatives
Depending on where you live, and the nature of business you wish to start, there may well be different government-funded schemes or initiatives that offer small business funding.
They are not a guarantee, and may not always be suitable for the stage you are in, but it is always a useful consideration to bear in mind.
When all is said and done, there is one form of business funding that can never be overlooked. Good old-fashioned bootstrapping.
Take the money you have and find a way to make it work. No loans, no creditors. Just your own determination and creative mindset on finding ways to spread your available capital over the areas that need it the most at that particular moment in time.
While not necessarily considered the most reliable sources of funds for business, it has been done by many of today’s most successful businessmen and is a testament to the determination of the entrepreneur’s mindset.
Consider All Sources of Funds for Business Success Before Deciding
When looking at the sources of funding for a business, whether start-up costs and a bit of top-up capital to get you through a rough patch, the most important first step is to consider your options.
Don’ just jump at the first decent offer you find, because there could be a better one around the corner. Do your market research, know what your options are and make a decision rooted in logic and thought rather than a knee jerk reaction to the prospect of cash.
Check out some of our other posts for more advice on everything from launching to running your own business.