Cash flow. It’s the reason 82% of businesses fail. This makes money one of the most important things to consider when starting a business.
Planning to create a new product, launch a startup, or expand your current business? Well, the capital needs to come from somewhere.
Here are a few quick and easy ways for how to get funds for your business venture.
Ask for It
Not all entrepreneurs have the cash upfront for funding a business. But what they do have is a network of people that they can ask for help.
Reach out to friends, family, or godparents to ask them to become investors. Even a mentor or long-lost relative can come in handy. Present them with your business plan, providing details on expected profits.
It helps to also put up some of your own savings. Then ask people you know to help cover the rest. This way they can see how serious you are and how much you have set aside for the business.
Be sure to discuss if the investment money will be a gift. Or if you plan to pay them back in the future. This is also a great way to avoid getting subjected to high-interest rates.
Set up a Go Fund Me
This option is smart for how to get funding in the digital age. Crowdfunding allows you to set up an account where people can send you cash for your business.
It’s a peer to peer approach that provides a fast and efficient way to get funds. Crowdsourcing is so popular that it raised over $40 million in its first year.
Check out these crowdfunding sources that can help build your business:
- Seed Invest
- Crowd Supply
- Lending Club
There are other online sources that provide lending options, like OnDeck or Kabbage. Social media is another great outlet to support your Go Fund Me.
Loans are the most popular way to find funding for a new business. But getting a loan from a bank is not always easy and comes with its own set of risks.
You’ll need a great credit score to back you up, anything higher than 650 is ideal. Also get prepared to show serious financial background information.
You should also have proof of assets and collateral. As well as being able to show you are a good law-abiding citizen when it comes to paying taxes.
It helps to already have a checking account or credit card set up with the bank you plan to apply for a loan with. It also makes for a quicker and smoother application process.
Small business association loans are another option. They will often give you a lower interest rate for your small business loan.
Besides business loan options, a title loan is another way to get funds. Check it out for details on interest rates and easy payment plans. A perk with title loans is that you don’t even need a credit check.
Find an Investor
An angel investor can be anyone with capital, who is looking to make a smart business decision. But you’ll need to win them over first, with a solid plan. Be sure to showcase what you can offer them in exchange for their investment.
Angel investor groups will likely want to have part ownership in your company. So be ready to offer around a 20% return on investment.
You can get business funding investors from your local community or online sources. Here are some investment tips for business owners.
Venture capitalists often come in once a business is off to a successful start. They can then help expand the business further, by offering millions of dollars. Yet, this is often in exchange for helping you run your company.
Apply for a Grant
Funding a company that relates to creative arts, research, or science? If your idea appeals to these industries then you may be able to get funds from a federal grant.
Many businesses also offer grants as part of their mission for philanthropy. Here are a few companies to check out:
- Eileen Fisher
- Tory Burch
- Wells Fargo
- Fed Ex
With grants, always be sure to read the terms before applying. Some get specialized only for women or expanding education for children.
Take a Little from Your 401K
This is a debt-free option because you already paid into it. Yet, it can be a bit of a gamble with your retirement savings.
You can sometimes get penalized for taking out funds before reaching retirement age. This includes penalty fees and paying taxes on what you take out.
But if your business makes it big, then you have plenty more money to put back in. Here is more on planning for retirement when owning your own business.
Hire a Business Partner
Hiring a business partner is great for gaining entrepreneurial insight and extra capital. Look for a like-minded individual that can split business startup costs with you. This way you can both put up the funds and share the burden of any risks.
This can be a family member, friend, or a work colleague. It’s best for you both to keep your current jobs for extra cash flow. This way you put the work in after hours to get your business up and running.
Pick a partner that brings a different skill set to the table. Choose something that you’re not a professional in. Skills like marketing, money management, or stock trading are always essential.
Get a Side Job
A side job can help you rack up some serious cash in a short amount of time. These jobs are in high demand and can get done on a flexible schedule.
- Uber driver
- Online blogger
- Bartender or server
- Babysitter or tutor
- Dog sitter or walker
Online sources like Task Rabbit and Airbnb also have money-making potential. You can rent out a room in your house for extra cash. Or help others by building furniture and repairing household items.
Now Get on out There and Go Get Funds!
These tips provide an easy and efficient way to get funds for your business. Remember that cash flow can make or break any business. So once you have it, be sure to keep it coming in.
Check out these tips for more creative ways to cut business expenses. This way you can find success by saving more money for your future business expansion.