When you are looking to start a business, you may have everything you need in place other than the funding. No matter how good your product, service or business plan is, it is useless without having the funding to action anything. Below we have researched 15 ways for you to raise money for your business. Each different way can vary in what you need to receive it, but we are in no doubt that one of these ways will become useful for you when looking for ways to raise money for your business
Crowding funding involves a crowd of people all putting money into something for a given outcome, in this example it would be to support your business. Often when you start crowdfunding it is likely that you will offer shares or a reward for helping with business funds. This helps encourage people to invest the money, whilst also making them feel involved and invested in the business.
If you are a small business looking for crowding funding you will likely benefit from using reward-focused crowdfunding, you could offer them discounts, free trials, products or services to make this more appealing for them.
A small business grant will be money gifted to a business from the government or other companies that may be looking to support it. The application process for a small business grant can become highly competitive and often unsuccessful, however, it’s always something which is worth applying for as you never know it might work out.
The reason they are highly competitive is due to it mainly being there to support specific industries or business types, which may mean your business isn’t relevant in this sense.
Venture capital is a form of private equity and a type of financing in which investors provide the funds needed for a start-up company which they believe has long-term potential growth. Often venture capital will come from well-off investors, investment banks or other financial instructions.
The majority of the time venture capitalist will have a good understanding and managerial experience to invest in companies which are going to experience exceptional growth or have already appeared to have grown quickly.
Peer-to-peer lending enables individuals to receive loans directly from individuals which can help cut out the middleman of financial institutions. This can be considered a form of crowdfunding, as you can work with several different peers to receive the required funds needed to fund your business.
As previously mentioned, you may have to offer a reward or benefit for those who are providing the fund through this type of lending. Although some may not expect it, a reward scheme is likely to increase your chances of receiving peer-to-peer funding.
Another form of peer-to-peer lending is through P2P lending sites whereby connect borrowers directly to lenders, in this website you can see the rate and the terms in place for this to work for both sides. This can be a really good way to find peer-to-peer finance without having to do it yourself.
Burrowing from the bank can be another way for you to fund your business, you will go through an application process which will then be reviewed by banks to approve the requested loan for the borrower. Depending on the banks the criteria for burrowing can differ, most things banks ask for are likely to be included in a business plan. If you have not mapped out your business plan yet, this would be a good opportunity to do so which could increase your chances of getting the funding.
The easiest and most efficient way to fund your business would be through your personal finances, this would mean that if the business started to grow you would benefit from the profit coming in without having to repay anybody. A good way to do this is through personal savings, however, it’s important to remember this can be risky as you could lose everything if the business fails which could leave you with nothing.
A common way people start to look for funding when setting up a new business is by turning to family or friends and asking them to help out. This can be a really good way for you to get the money you need as a business, although when receiving funding in this type of way it is often informal. As you undertake this type of funding it is likely to be based on trust, if there is confusion on the agreement later down the line this could have a negative impact on your relationship. This is something to consider if you are looking at this type of funding to help your business.
An angel investor is a term used to describe individually wealthy people, who may be entrepreneurs or people who run a successful business or two. These people often look for ways to invest and grow their wealth, they do this by investing in an innovative business which they believe will bring them a greater return on investment. This can be a good way for you to raise money for your business, but having investment and support from people who believe there is growth in what you are offering as a product or service is.
Using your trade or vendor credit to help raise money for your business can be a good way to benefit yourself and your vendor. Vendors or those in trade have more of an interest in the success of your business than you think, this is because it will have a direct impact on their business. The more you grow as a business the more business they will get from you.
You should try to build a strong relationship with your vendors and ask if it’s possible for them to extend your available credit and lengthen the period before you need to pay them, the best time to discuss this option is before you need the payment terms, this will show you are thinking ahead whilst also ensuring you can pay them on time as you think about it logistically.
Corporate venturing is a way to raise money for a business through larger companies investing in and supporting entrepreneurs. Unlike other options to raise money for your business, often corporate venturing will help entrepreneurs in raising money, finding customers, developing their own products or services and eventually employing additional people. In short, they help execute and set up a successful business from a start-up, the knowledge they have as a larger company will help build your business whilst also educating you on how to do this.
When it comes to setting up a business and it’s being successful, networking can be a key in all of this. The best way to raise money through networking is to attend events or locations where you know there is potential interest in what your business can offer them. Just start speaking to individuals or businesses to understand what it is they may be missing or need, this provides you with an opportunity to adapt and pitch your product or services to those you meet networking. From speaking to them on a personal level they are likely to be more open to listening to what you have to offer them.