"Most powerful is he who has himself in his own power. "
Do you want to start your business but are worried about raising funds for it?
Well, you’re not alone.
Most of the business ideas don’t even come to fruition due to a lack of funding. A business idea alone won’t suffice because money plays a significant role in setting up that business. It can be excruciating to run here and there to raise funds for your business.
On top of it, your mind stops working as it is always worrying.
But you don’t have to worry anymore as we’ll show you how to raise funds for your business in six different ways.
Bootstrap your business
Small businesses don’t require much investment. It can be done with effective bootstrapping techniques.
Bootstrapping is a way to start the business without relying on investments from outer sources. You start with limited resources or money and make it big. It requires you to compromise on certain things like office space, interns instead of employees, negotiating fees, and investing the profits back into the business.
Some of the ways in which entrepreneurs manage to provide initial capital for their business are personal savings, lending money from family and friends, or customer funding.
Bootstrapping a business is possible only for people who are confident, tolerant towards risks, self-disciplined, and determined enough to face the challenges. If you fall into this category, you may as well start your own bootstrapped business.
Many companies that are well known now started as a bootstrapped enterprise. Some of them include Apple, Facebook, Dell Computers, HP, eBay, and Oracle.
The goal is to start small and make it big.
Take a personal bank loan
If you don’t already have an existing loan, you can take a business or personal loan from any bank to start your small business.
These kinds of loans are usually given based on certain terms and conditions, the time you would take to repay it, and at times collateral.
However, it’s advisable to go for it only when you have the confidence of becoming debt free a few years down the line.
Opt for business loan schemes by the government
India is one of the fastest-growing countries in terms of GDP and market value. Small and medium-sized businesses contribute to the growth of the country. Also, they’re the ones solving the unemployment problem of India.
In a bid to encourage small businesses, the Government of India has come up with different loan schemes.
The top five business loan schemes are
- MSME Business Loan in 59 minutes
- MUDRA Loans
- Credit Guarantee Fund Scheme
- National Small Industries Corporation Subsidy
- Credit Link Capital Subsidy Scheme for Technology Upgradation.
You can choose any of these loan schemes based on the size and the level of your business.
Venture capital funding
Venture capital is a type of financing that is provided to small businesses and startups that have growth potential. Usually, these investments are made by sound investors, financial institutions, and investment banks.
For others to invest in your business, you have to make sure that it has a solid foundation and a great vision. Also, a part of the profits that your business makes goes into the pocket of these investors.
Get funding through Angel Investor Networks
There are people who are financially sound and have been successful in their business. Such people come forward to help other similar businesses by investing in them in return for equity. They are called Angel Investors.
In addition to the funds, you can get directions from the investors that’ll help in the efficient functioning of your business.
Connect to these angel investors on angel investing sites like AngelList, Band of Angels, Investors’ Circle, MicroVentures, and other similar sites.
Funding the business through crowdfunding platforms is a great way to start your business as it doesn’t require you to take a loan or give an individual a share of your company.
Crowdfunding is a way of raising funds for a cause, company, or project. It requires people to make small or big donations for the campaigns they believe in.
The major factor that is responsible for the success of a crowdfunding campaign is the story. The funds you raise for your business is directly influenced by the story that is shared with the audience.
A few well-known crowdfunding platforms that can help you raise funds for the business are Kickstarter, Ketto, Milaap, and ImpactGuru.
The Bottom Line
Starting a business can be a daunting task, especially when you lack funds. By making use of any of the strategies or a mix and match of a few, you will be successful in raising funds for your business. Don’t let anything stop you from achieving your dreams. Everything is possible if you do it with sheer determination.