Starting your own business can be exciting and stressful at the same time. You’ve worked out your business plan, have designed your website and/or found a location to set up shop. Now it’s time to find out where the money is going to come from. It can be difficult to get money for your new business without taking out loans or using your credit cards. Here are some good ideas that help you stay out of debt:
1. Cutting Back On Your Expenses:
When starting your own business, it can be very easy to start spending more than you are taking in. You need to cut your expenses as much as possible in order to let your business grow. Only pay for things that you really need to get your business going.
2. Expenses For Your Website:
Are you going this alone or do you have a partner? In many cases, entrepreneurs come in two. One has the business planning head and the other is the creative, technical head. When you have a partner, you can split up things that must be done and save a great deal of money. If you are going solo, find out if a family member or a friend is really good at creating websites. A friend or family member will probably not charge a great deal less or even offer it as a gift!
3. Look For Investors:
If you need funds for equipment or inventory, find an investor that believes you have the potential for a great business and would be willing to invest as a part owner. If you need several investors, they will usually only ask for a percentage of your business. This is by no means a new idea, many successful businesses have brought in investors since the creation of businesses. Of course, in order for this to work, you have to be willing to take on a partner or partners.
4. Your Life Insurance Policy:
In many cases, you can get the cash value of your policy or if your family has two policies, sell one and keep the other. If you have more than one car, why not sell the one less used or is getting up in years but still holds some value. It’ll keep you away from borrowing from the bank. If you are now retired and starting your own business, consider downsizing your home!
5. Investing Your Own Money:
Possibly you have a good sized 401k Retirement Plan that you can dip into or if you have one or two savings accounts that can be utilized. You will probably get a great deal more attention from investors would feel a great deal more comfortable about coming on board because they are investing as well.
6. U.S. Government Funds:
There are many government agencies that offer funds for small businesses. Some include:
- Economic Development Agencies: There are agencies in your area who can help you out with grants and loans that can be a great help starting off.
- Small Business Lending Funds: This is a very dedicated government agency that will get capital for your business through various lenders in each state in the U.S.
- National Association For The Self-Employed: This is a great avenue that offers grants and scholarships for business owners who are self-employed.
- Government Small Business Grants: These grants are usually industry specific but there are many of them. You can go to their website and search for grants that are good matches for your specific business.
- The National Institute Of Health Funding: If your business is in the field of technology or research, this might be the place to go. They are very specific in regards to these two fields.
7. Crowd Funding:
There are crowd funding sites like GoFundMe and KickStarter that allow you to put up promotional material, set up a page for your business or event to receive financial backing from those who visit the site. These sites have a lot in common but also differences, so read over all their information to see if they are right for your business. You can find more crowdfunding sites here.
8. For Specific Industries:
This will depend on what your business is about. There some funding organizations that will help out in specific businesses that are related to their industry funding. Whole Foods Local Producer Loan programs will help out locally grown foods within your area. If this is your business, you should check them out.
9. Business Line of Credit:
Another avenue for funding your new business is through a business line of credit. For those who need cash pretty quickly and have a fairly good credit score, this could be a good avenue to look into.
10. Family & Friends:
This might be an option if your friends and family believe in your business. They might be willing to invest in you. Keep in mind, this can also be risky should your business fail. Having bad feelings with family and friends can be a really bad place to be in. Also see our post: Reasons not to borrow money from family or friends.
Outside The United States:
The United Kingdom:
Small Business UK is a must visit site. The have tons of articles and excellent advice for helping small businesses get grants that are available for both startup companies as well as already running businesses. Visit: http://www.smallbusiness.uk/financing/government-grants
If You Are In Canada:
The Canadian government has a website that will give you valuable information on their Canada Small Business Financing Program and various Government Grants. It’s worth checking into.
Starting up a new business has many challenges along with way and funding options must be looked at very carefully. There are many great avenues that will not drain your pockets or forcing you to confront your bank. Banks are expensive and should be the last resort. There are so many government agencies that are in place to help small business get off the ground. Once your business has taken off, it’s probably a good idea to look for some solid investors who would have an interest in your operation.
There are so many options available to help out a small startup or pre-existing business. Start doing your research whether in the United States or another country.
If You have exhausted all the possible options, then you can certainly consider borrowing business loans for your small business.