You’ve got a great idea for your dream business – now all you need is some money to help you get it going!That is a situation in which millions of people find themselves every year. Even if you have your own funds to start your business, cashflow can be unpredictable and slower than expected in the beginning, so it is always a good idea to have one eye on possible sources of backup funding. The bank is where many people begin. But funding is not just a question of where you can get money. It can give you things better than just money – advice, moral support, a customer base and more!
Why Business Funding Is More Than Just Money
Money may be what you first look for – but the right funding partner can also help you in other ways.A financial lender like a bank is typically a silent lender. They may offer you some standard business advice from someone in your local branch, but don’t expect much more than that. By contrast, a private investor who has experience in your area, general business experience or a helpful network may be much more active. As well as helping you out financially, they may be able to support you with knowledge, advice, contacts or practical business building tools.
Start With Your Network
The easiest place to start when looking for business funding is within your own network.Your friends, family, former business colleagues and old customers may be willing to provide you with funding. In addition, at least some of them will have some advice and experience on where best to get funding. So, even if they cannot or will not put their own money into your venture, they may be able to point you in the right directions.Family and friends can be supportive and generous. At the same time, relying on them for business funding can bring the downside of mixing business with pleasure, especially if things don’t work out the way you want in the future and you end up unable to repay them what they expected.
Investigate Local Funding Bodies
There are often special funding sources available to people looking to set up new businesses.These may be run by the local government. They can also be offered by charities and grant making bodies. The conditions will vary widely and it may take some effort on your part to access these funds, as the criteria used to assess applications may go beyond purely commercial.These can be good sources of funds, however, as they often make outright grants, and when there are loans instead of grants they are often on advantageous terms. Such funding sources can often also connect you with helpful people and organisations in your community.
Angel Investors Offer Money And Expertise
If you think looking for funding is like hoping to find an angel, you may be right!Angel investors are investors who typically have business experience and are looking to provide money and also often some expertise. They can be well connected, business savvy and understanding of what it is like to start a new enterprise, with all of the strains it can bring. At the same time, however, they are often financially demanding and will usually look for an equity stake not just interest on a loan.So, whether an angel is right for you may depend on how willing you are to give away part of your business. In any case, speaking to some angel investors will at the very least connect you in the local business community.
Could You Crowdfund?
Crowdfunding has taken off as a source of business funding in recent years.Sites like Kickstarter and IndieGoGo allow you to raise sometimes large amounts of money in a short time. They aren’t as onerous as lenders and give you more control of how to run your business. Another benefit is that you can get lots of feedback from potential customers, which will help you as you build your business idea.However, such sites attract lots of competition and so you’ll need to put effort into presenting your pitch in an appealing light. They also tend to work better for business with a tangible consumer product, as part of the model involves sharing the end product with early supporters.There are lots of funds available for new businesses and with a good plan and effort you should be able to attract the funds you need for a solos business idea. But they come with different conditions – some are just money, some also offer expertise and support. What is best for you will depend on your business plan and flexibility. But you can start investigating your options locally today!