If you feel inspired to start a business, then one of the first hurdles you’re going to encounter is that of funding your idea in the early stages.
In a nutshell, raising capital to start a business isn’t usually a particularly easy or comfortable task that people look forward to, indeed this is what stops most people from turning their idea into a tangible reality… yet, at the same time, it doesn’t have to be a painful process.
Unfortunately, entrepreneurs face immense pressure from all aspects of their business and whilst they know the odds are usually stacked against them, they keep on keeping on, as they know the payoff can be worth it.
If you’re reading this article there’s a pretty good chance you already have an idea that you know could transform your life but are perhaps in the frustrating financial position of needing fund to get your idea off the ground.
Maybe you feel you’re sitting on the next high-growth business such as Spotify or Uber, or maybe you’re simply wanting to set up a local business to support you and your family, or even a social enterprise to help those in your local community.
The one thing that makes entrepreneurs different to most people is their vision, their focus and their determination to turn their dream into a reality.
These are admirable qualities that do fuel success, but without having the cash in the bank to fuel your vision, it’s like setting out on a road trip without any gas in the tank.
Indeed, it can be very difficult to launch things off the ground with limited financial resources, as having cash behind you is imperative, particularly if you are at the stage where you are launching, as the investment in trade shows and trade show exhibits can be considerable, yet necessary in order to get your brand out into the marketplace.
This article therefore considers three of the most simple ways you can fund your early stage business:
- GET A BUSINESS LOAN
The most traditional route for financing the initial start-up phase is to get a business loan, yet this often requires security, which could put you and your family in a precarious financial position should the business not take off as well as you anticipate.
That said, a business loan would you mean you remain in control of your company, as you aren’t having to offer equity to investors who then have a say in how your company is run.
Your friends and family could become shareholders in your business, though an external investor, particularly if they are a business angel could bring a lot more value than friends and family as they often bring expertise, insight and contacts as well as cash.
- FRIENDS AND FAMILY
If your friends and family are open to backing your business this can be a great option as it will cost less and be easier to arrange than any other type of finance. However, borrowing money from friends or family and risking it on a new start-up can come at a high social cost if things don’t pan out the way you anticipate.