You may have a great start-up idea but raising the funds to set it up becomes a tall order. Luckily, today, there is more support for funding small businesses than before. You may want to define your niche and find out how the business or start-up is going to solve problems of consumers. Depending on the kind of start-up and its stage of development, you may be able to get funding through different ways. Here are practical ways that you can explore as avenues for funding your start-up.
It is most likely that, when you plan to start a business, you have set aside some capital in form of savings. Using your own money to fund a start-up is the best way to show that you are a serious investor. You can team up with like minded investors and make contributions towards the start-up.
In case, you have a creative project, you may crowdfund it. There are many tools that you can use to crowdfund such as online websites designed to help investors in crowdfunding. This is a low risk funding option that allows investors to get money for their start-ups.
Seek angel investors
With the ABC’s show, Shark Tank, angel investing has become popular to many people. It is one way start-ups can get funding for their operations. It may not be an option for every other start-up considering that angel investors want something that can offer quick returns from their investment. They also want to control the company, something you may not be comfortable with.
Friends and relatives
People who know your talents may be willing to help you start your business. The mere support you get from them is an inspiration to you and them too. You should not forget consulting your family and friends to see if they can give a helping hand in raising money for your business. They may offer soft loans to support your investment.
Enter contests or competitions
A number of contests have been launched to help encourage entrepreneurs to set up their businesses. These contests encourage innovations by giving financial rewards to those who qualify. For example, MIT offers financial rewards to potential start-up investors of close to $350,000 every year. There are many other contests including the Amazon Web Services Start-up Challenge that offers rewards of $50,000 to various businesses each year.
Seek a grant
Grants provide you free money you can use for your start-up. However, locating the grants may be difficult. That does not mean that you shouldn’t try it. You can explore the Federal Grants offered in different categories to find out if your business idea fits in. The grants are available based on your business theme and demographics.
Get a loan
You can opt to apply for a loan to get funding for your start-up. There are peer-to-peer lending options or bank loans that you can pursue. This is especially true if you have good credit score. The downside with a loan is that, starting a business comes with much uncertainty meaning if things do not go as planned, you may have troubles paying back the credit facility awarded to you by the bank or peer-to-peer lending institution.
Explore these different ways of funding start-ups and you will find it easy to get funds that allow you to start a business. Make sure you have done your research about the product or service you want to deliver. Putting together funding to kick-start your business needs not be complicated. With a good business plan, understanding of the funding avenues, and honing your pitch to wow other people when they learn or hear about the idea, you can increase the odds in obtaining funds.