Are you thinking of starting a new business, but do not have the funds that are required. When it comes to starting one’s own business, the experts will tell you that your number one option for getting yourself the money you need is by starting off at the three F’s, that is, family, friends and fools. But, that being said, there is a smarter, less lethal way for entrepreneurs to get the funds that they require to get their startup off the ground. Turns out, entrepreneurs don’t really need money, but they do need what money can buy. The following is going to be a guide for all those who don’t want to deal with family, friends, or fools in order to find investors for your business startup.
Start In the Garage
Well, if Bill Gates could do it, so can you. Ask the exerts in the business industry and they will all tell you great stories about how they first started up and turned their businesses in to multi-billion dollar entities. The best thing about starting up your business somewhere close to home is that you won’t be required to pay rent or any of the extra payments that are needed and come along with having to rent an office in a commercial building.
Barter for What You Need
Contrary to popular belief, bartering for what you need hasn’t quite gone the way of the dinosaurs, in fact it is a practice that still lives on and is the answer to the question of many an entrepreneur who is looking to save money. Even today, barter is still alive and kicking and is, by far, the best way of getting the goods and services that entrepreneurs need without having them spend a dime. The internet has made it extremely easy for startup businesses to find other startups that need the products or services you need and have what it is you’re looking for.
A great place to start off your search is by searching for suppliers who are also startups. That is because they are probably cash strapped just like you, and they probably need to spend money which they do not have. Startup entrepreneurs can also use the services of barter companies that specialize in handling business related trades. Using barter for what you need is a great way to get your business going until you find investors for your business.
Always Accept Payments Upfront
Whether your startup business is about providing products or services, the sooner you get paid the better it will be for you to grow your business. This is the main reason why business experts always advise startup entrepreneurs to try and get paid up front, even if it’s a partial payment.
A good way of doing this is by making clients make a down payment when they are interested in buying a service. Not only will it mean money coming in from the start, but it will help bolster your relationship with your clients, because your new clients will feel like they have skin in the game because they’ve paid for it. If you happen to be selling a product, and you probably are, slide in a discount if they pay in cash for the product or service, or if the customers buy in a large quantity. This will enable you to be ahead of your bill payments and the customers win too because they will be saving some of their hard earned money. It also happens to be a great way to find investors for your business.
Get Free Advertising via Non-Profits
Face it, you’re startup is going to need advertising in order to get your idea through to the masses, build awareness of your presence in a market niche and consequently, create sales opportunities. But the truth is that, most startups just don’t have the budget to advertise their brand or service. To get around this, entrepreneurs can partner with non-profits that they care about. While this will mean that you will be providing your services for free, on the up side, you will be getting the necessary advertising that you need while reaching out to potential customers. The best way of reaching out is by starting off with locally based non-profits and charities within the community. This will also answer your question on how to attract investors for your startup from within the community. Because you are supporting a cause that you believe in, chances are, being proactive within a community will lead to you being sought after by local investors who have the same beliefs and concerns which you do.
Get Seed Money for Your Business Startup
The following are some of the traditional ways for entrepreneurs to get seed money for their business startup.
• Apply for a SBA loan
• Raiding your savings
• Borrow from friends and family
• Find investors
There are several government schemes which are designed to help budding entrepreneurs. Governments believe that a small business, if grown significantly can provide employment to those in search for a job. This also helps the government by lowering the unemployment rate of a city or county, and is one of the main reasons why government schemes grant small loans to start up businesses.
Friends and Family
As much as you might hate to admit it, friends and family can come to the rescue if you need seed money for your business or if your business is going through a tough time. Startup entrepreneurs can ask friends and family members to lend them the necessary finances as seed money for their business. That being said, you will need to have a proper business plan in place and know exactly how much you will need to get your startup business off the ground. This will help you come across as a professional who is passionate about their business.
Getting Support from Angel and VC Investors
Make no mistake, whether you go for the business angels or the VC investors, an investor wants big ideas. They are looking for ideas that can change the world, or atleast the ideas which will change our way of life or ways of thinking. And in their eyes, anything less is too speculative. Needless to say, the risks that are involved in investing in a startup business is big, so to find investors for your business, startup entrepreneurs need to make their investors sure of huge pay offs and a business that will be around after five to ten years. This brings us to our next question of, are you in the business too early? Well, the simple answer to that question is asking yourself whether the market will recognize and, more importantly embrace your business idea immediately or will you have to wait for a few years. If you have your doubts, chances are, your investors will think the same and you might even suffer the frustration of losing the investment your startup was founded on. So, no matter which option you choose, have a focused plan of execution for your business startup.
Funding for a startup business is hard to come by, especially in these hard economic days. That being said, most if not all entrepreneurs do not have a ton of cash lying around which they can use for their startup, but by effectively implementing the strategies mentioned above, they can start a business without much money.